At a Chartered Accountants Ireland webinar on 23 March on the governance of charities and not for profits (ROI), David Brady, non-executive director and management consultant, presented on the “charity board maturity model”.
Five Levels of Charity Board Maturity*
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Level
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Board characteristics
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Non-Compliant
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Negative attitude to governance. Unaware of strategic developments. Short-term funding focus. Receives only basic financial information. Unaware of outdated policies. Does not insist on a risk register. No rotation or succession planning. Antagonistic relationship with staff. Weak AGM process.
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Compliant
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Tolerant attitude to governance. Closed to developments other than self-beneficial. Ensures mixed portfolio of income sources. Ensures policies are current. Ensures risk register prepared for compliance. Rotation policy not implemented. Provides superficial staff support. AGM limited to board only.
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Effective
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Understands benefits of governance. Revises board and staff structures to exploit opportunities. Focused on seeking funding opportunities to support strategy. Use policy register to refresh and revise policies. Reviews risk register to manage risk and plan contingencies. Ensures appraisals and rotation policy implemented. External members attend AGM and decisions made.
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Progressive
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Seeks improvement governance. Keen to benchmark board maturity. Seeks collaboration in new initiatives that reflect market changes. Ensures policies updated in line with business/market changes. Defines risk appetite. Ensures skills gaps aligned with strategy. Ensures strategy informs decisions. Staff and board rotations planned and implemented.
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Elite
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Delivers a series of strategic programmes resulting insignificant impact and/or funding. Board and staff have collective problem-solving mind set. Reviews a series of financial and non-financial KPIs. Employs long-term resource planning. Promotes risk management culture. Reviews strategy regularly. Succession planning includes pro-active identification of new chair and board members. Embraces and learns from occasional failure positively.
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* Source: David Brady, FCA, of DB Consulting.
In an insightful presentation in which he persuasively argued that compliance with a governance code should a basic expectation, David provided recommendations for moving a charity or non-profit on to the levels of effective, progressive or elite governance.
The keynote presentation was followed a panel discussion featuring Inez Bailey, CEO of the Centre for Effective Services; John Roycroft, non-executive director National Advocacy Service for People with Disabilities and chair of its policy, communications and governance committee; and Aisling Fitzgerald, Director with PwC. Issues discussed in detail included:
- Is complying with a governance code, or an equivalent set of standards, sufficient to achieve good governance?
- A non-executive director’s experience of implementing the Charities Governance Code.
- Insights on how the senior management of a charity or non-profit can effectively manage and meet stakeholder expectations in relation to compliance and performance.
- Whether a charity is complex or non-complex per the Charities Governance Code.
- The importance of innovation in a charity or non-profit organisation.
- The societal contribution of the charity and non-profit sector in Ireland, and considerations for providing support to assist people suffering because of the crisis in Ukraine.
The event was opened by Tony Ward, Chair of the Chartered Accountants Ireland Charity and Non-profit Network Group, chaired by Níall Fitzgerald, Head of Ethics and Governance, with a closing address delivered by Terea Campbell, Member of the Council of Chartered Accountants Ireland and Chair of the Institute’s Ethics and Governance Committee.
A full recording of this webinar is available to viewed at: Governance of charities and non-profit organisations (ROI).
Níall Fitzgerald FCA
Head of Corporate Governance & Ethics at Chartered Accountants Ireland
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