Tracey Bird explains how charity trustees can avoid their organisations hitting the headlines for all the wrong reasons
Sometimes no news is good news. Often, when charities hit the headlines, it is because something has not been properly dealt with around the board table. Lack of good governance in an organisation can not only lead to turmoil, it can also have far reaching effects on an organisation’s reputation, success and long-term future.
On the SCVO Information Service we have just dealt with a small local organisation at war as individual trustees fight over who is in management and control, with allegations of impropriety and racism. And this week a local Scottish rape crisis center hit the news when it was forced to close down after being ordered to pay out almost £20,000 at an employment tribunal. Both are extremely sad cases for both the sector and the wider community, and no doubt really stressful for all involved.
This is not the place to go into the rights and wrongs of particular disputes, cases like these can be a useful warning shot for other charity boards to take stock and think about what lessons can be learnt, and how to avoid internal conflict.
Charities and voluntary organisations don’t get set up by people who think that everything is ok. They attract passionate people who feel strongly that they can do something about health, social or environmental problems. As with all things involving human nature, relationships can be fractured and misunderstandings arise.
A serious disagreement within a charity can just lead to loss of staff, members, trustees and income. It can also damage an organisation’s reputation, often irrevocably
Tracey Bird
So charity trustees, staff and members can sometimes disagree with each other. It would be unrealistic to expect this never to happen, indeed it can be a positive to have a wide range of opinions to inform decisions but where this leads to a dispute which has a negative effect on the functioning of a charity, then it is a problem. A serious disagreement within a charity can just lead to loss of staff, members, trustees and income. It can also damage an organisation’s reputation, often irrevocably.
It is the responsibility of every board member, both individually and collectively to resolve disputes within their organisation. A useful reference point to consider would be to include a disputes clause in your governing document, with procedures on how to deal with disagreements. If this process breaks down, or there is further disagreement on the interpretation of any written procedures, then it may be useful to look externally for support. An independent third party can look at both sides of an issue and can come up with a fresh perspective and possible resolution. Who an organisation approaches will depend on the nature of the dispute.
If a dispute concerns internal governance, then the organisation could approach its national body, or a regional or national umbrella body, or its local Third Sector Interface. For disputes with employees, ACAS is a useful first port of call. Mediation should also be considered. This is a more formal way to settle disputes and is a private and confidential process in which an independent person meets with both sides, helping them to reach a solution that everyone finds acceptable.
When all else fails, individuals can often threaten to involve the Office of the Scottish Charity Regulator (OSCR). However, OSCR will only deal with questions that relate to charity law, such as if there is a risk of significant damage to a charity, its assets or beneficiaries, or where charity trustees have breached their duties or have been involved in serious or sustained misconduct. Charities are independent organisations run by charity trustees, and OSCR won’t get involved if a dispute is about trustees’ decisions or policies.
Trustees are free to make decisions for their charity, as long as they are acting within the law and within the rules of the charity’s governing document. OSCR will usually not get involved in matters that do not relate to charity law, such as contractual employment issues, disputes between charity trustees, or criminal activity, which are matters for the police (though they would want to know about any actions the charity trustees have taken to address such matters).
So ultimately it is up to trustees to act in the best interests of their organisation both collectively and individually. Good governance is a subtle, ongoing and difficult process, but who ever told you it would be easy?
