It’s unlikely that anyone in the charitable sector will have missed the recent governance issues at Oxfam. Indeed, it’s quite possible that you’ve witnessed similar, although hopefully less severe, scenarios in your own organisation. And when combined with the Charity Commission’s significant recruitment drive, in part due to an increased focus on supporting good governance, as well as updates to the Charity Governance Code, it raises the question of whether examples of ineffective charity governance are on the increase and, if so, what can be done to address this.
Answering that first question is difficult, given the differing ways in which organisations recognise governance failures, respond to them, and ultimately report on them.
What can be done to address governance issues, however, is a very different, and more constructive, question.
Attention often focuses on policies, frameworks and controls. Did they exist? Were they followed? Were they robust enough? All of these are, of course, essential, but governance failures rarely stem from a lack of written guidance alone. Fundamentally, governance is more than a tick-box exercise.
The warning signs are likely to have been present long before the issue is acknowledged and certainly long before it becomes public knowledge. Those warning signs are unlikely to have featured in board papers or risk registers, but they’ll almost certainly have been manifesting themselves in behaviours and culture. All too often, they’ll have been inherent in one of the hardest places to identify them – silence.
So, what should charities do to ensure their values, culture, and behaviours are integral to their approach to effective governance?
Values:
Most charities have clearly articulated values which are shared and celebrated. To ensure that these values are shared amongst the workforce, they’ll often be engrained within the end-of-year appraisal process and rewarded where behaviours clearly align with them. Yet what happens when those values are tested by conflicting behaviours? What system of redress or remediation exists so that any negative impact is limited?
Behaviours and culture:
Behaviours that contradict the stated values won’t always cause irreparable reputational damage, but that’s surely a risk not worth taking. If values are only measured when they’re demonstrated positively, then the absence, avoidance or erosion of those values can pass unnoticed. Dismissiveness and avoidance should be captured and discussed.
Some behaviours, meanwhile, might have an even greater tale to tell but they’re often less tangible and potentially open to interpretation. If they suggest that something isn’t operating as it should, they’re worth investigating further.
Consider these: eyerolling, disengagement or silence in meetings; evident but unexplained frustration; or whispered conversations in corridors. They may not point to the root cause of the issue, but they should certainly start to raise alarm bells.
Silence, particularly, speaks volumes. Ironic, isn’t it?
When people stop asking questions, challenging assumptions or raising concerns, this can easily be mistaken for a sign that everything is working well, when in fact it may point to a fear of speaking up. Being a lone voice rarely carries with it reward, after all.
Of course, policies promoting honesty and openness will almost certainly exist. Whistleblowing protocols may even be clearly documented, but if the wider cultural environment doesn’t actively promote these in action, they’re nothing more than administrative procedures.
So where do these considerations leave trustees? How much do they really know about what’s going on beneath the surface?
Often, board packs centre on what’s measurable and reportable but with behaviours and values playing such an important role in the early identification of governance issues, trustees must become more inquisitive without causing unnecessary obstruction. They need to be curious about what isn’t being said, not simply reassured by what is.
Of course, in a world of reduced funding and fewer staff, managing behaviours that contradict the organisational values can become harder; what might have previously been challenged, might be easier to tolerate or turn a blind eye to. Yet it is often in these conditions that disquiet and frustration are amplified, precisely because those behaviours go unaddressed.
So, as the sector reflects on recent headlines, I would suggest the biggest lesson to be learned is this: good governance isn’t just what’s written down – it’s about culture, behaviours and the confidence to listen, especially when the room goes quiet.
At Sayer Vincent, we support charities to move beyond a compliance-only view of governance. Our risk, internal audit and assurance services help trustees and leadership teams identify early warning signs, test whether values are truly embedded and create environments where challenge and openness are encouraged.
Good governance is as much about behaviour and culture as it is about controls, and that’s where thoughtful assurance can make a real difference. If you’d like to explore how your organisation can build confidence, curiosity and openness into its approach to governance, we’d be happy to talk.