Article by haysmacintyre 19/02/21
Governance
has been subject to particular scrutiny since the onset of the
pandemic. Membership bodies have enjoyed significant trust in this
area due to strong policies, but with the world of work upended, it’s
vital to ensure that those policies remain robust.
What
is a governance review?
A
governance review can cover a number of different areas. It might
look at the effectiveness of the board’s work, such as: meeting
structure; documentation of key decisions; approach to recruitment of
trustees or trustee induction and training; the constitution or size
of the board, including skill requirements, election methods,
diversity, sub-committee structures and terms of reference; or a very
focused review of one of these areas.
The
format of a governance review may also vary. For instance, the review
may be part of a board meeting or away day, but more expansive
reviews should be more formal and undertaken by a relevant
professional. The board will need to decide which is more appropriate
at any given time, considering the time and resources available.
Why
complete a governance review?
A
governance review is an opportunity to reflect on an organisation’s
governance arrangements. As we reflect on what was one of the most
extraordinary years in recent history, it is important to recognise
not only the tough challenges faced worldwide by individuals and
organisations, but also the mass scale versatility and impressive
achievement demonstrated in response.
A
few key reflections for membership organisations regarding governance
arrangements: have they kept pace with the versatility and rapid
change within the organisation? Are your current structures still fit
for purpose? Do they allow the proactive decision making that the
changing environment requires?
Other
reasons to consider a review might be to update the governance
arrangements to account for changes in the organisation’s size or
as a useful means of ensuring the trustees/council keep up with
latest best practice or changes in the law – if your organisation
is a charity, then the latest guidance issued by the Charity
Commission will be a good place to start.
Generally,
it is good practice for boards/councils to carry out some form of
governance review annually and in more detail with external
assistance every three to five years, which ensures that all risk
areas are regularly addressed.
How
are governance reviews conducted?
One
of the most important things to establish is what you are trying to
achieve from the review. Ensure you have an appropriate scope and
that the key stakeholders understand the process.
The
review, whether conducted by an internal party or third-party
consultant, often begins with a survey of council/board members and
is, in some circumstances, extended to the membership to understand
any particular concerns.
The
next step is to analyse the current governance structure and
arrangements in the context of your strategic objectives and current
situation. This may include benchmarking the size, composition, roles
and responsibilities of the council/board, induction methods and
eligibility criteria against similar organisations, or best practice.
Other areas to review include codes of conduct, terms of reference,
or board policies.
It
is also important as a membership organisation to consider your
members. Should the review include a formal consultation with members
– for example, by holding interviews, focus group meetings, or
through a questionnaire.
In
addition, if the board is organising a large governance review, it
could be sensible to establish a working group, consisting of a mix
of council members and staff, and may also involve an outside advisor
to provide expert input and assistance.
Another
consideration is to use an existing set of good governance
principles, such as the Charity Governance Code (the Code) to give
the board a comparison or benchmark to work from, even if your
organisation is not a charity. For example, a board discussion at an
away day could be organised around the seven principles in the Code.
A
good governance review should assist your organisation in achieving
effective decision-making, ensuring that decisions are made and
implemented appropriately, and most importantly, that you are
effectively representing your members.
Following
the review, the board must develop an action plan to implement any
changes, and if they do not intend to action a recommendation, they
must clearly document why they made that decision. A working group to
plan and communicate with key stakeholders on the implementation of
the recommendations may be necessary.
Conclusion
When
was your last review? Is your governance fit for purpose?
We
have spoken to many membership organisations that believe their
boards have stepped up, having better attendance and more engagement
with meetings being held remotely. In spite of this progress,
regulators are still introducing new challenges. The Charity
Commission’s investigation into the Royal National Institute of
Blind People caused pause for thought for charities and non-charities
alike. The findings clearly considered that the Code was not in fact
gentle guidance, but regulation which should be followed by all large
charitable organisations. Have you benchmarked yourself against the
Code? With so many changes within the sector and individual
strategies, perhaps 2021 is the year for a more robust governance
review.
Any
review is only as good as the actions taken to deal with the
findings, ensuring that all stakeholders, including your membership,
share the journey.
For
more information on the governance reviews provided by PARN, please
contact Robert Pitts, PARN Deputy CEO, [email protected]
For
further information on haysmacintyre services for professional
institutes and membership bodies, please contact Kathryn
Burton,
Partner, Head of Professional Institutes & Membership Bodies.