Monday 20 August 2018

How can I be sure that the charity we align ourselves to doesn't face reputational issues?

Charities fulfil a vital role in society — and companies are eager to support their efforts. Photo: Stock image
Charities fulfil a vital role in society — and companies are eager to support their efforts. Photo: Stock image

Kieran Moynihan

Q Our company is raising funds to donate to a number of local and national charities. Given previous scandals involving charities, our confidence in the sector has taken a hit. Should we, perhaps like many others, be slightly reticent in aligning ourselves with a partner charity without being fully sure of how well they are run?

A Confidence in the Irish charity sector has been severely damaged in recent years due to a small number of high-profile scandals in large national charities. However, the vast majority of organisations in this sector fulfil a vital role in Irish society in an honest and open manner.

Specific recommendations for assessing a potential charity partner include:

- Review the charity website to understand their executive and board team composition, their approach to corporate governance and compliance with Irish charity governance code, and their previous annual reports showing where funds were used.

- Search for the charity on the Charity Regulator website (charitiesregulatoryauthority.ie).

- Meet with the CEO and chairperson where possible to understand their status and focus areas.

- Where the charity has previously, or is currently, partnered with another company, ask for a reference. Perhaps line up a call with that company to understand their experience of working and supporting the charity.

The introduction of the Charity Regulator in October 2014 was a watershed moment in the journey of Irish charities and non-profit organisations to international best practices. One of the most critical outcomes was a framework to copper-fasten the commitment of charities to ensure they comply with best practices in governance. In recent years, the UK has emerged as a pillar of excellence for charity and non-profit corporate governance.

Ireland is now rapidly catching up on the UK charity governance code principles, and many organisations here are embracing critical best practices developed by our neighbours. For example, in 2017 the UK charity governance code set out the requirement for larger charities to have an external independent board evaluation every three years. By comparison, one of the Irish charity governance principles is an annual board evaluation - the natural next step of which will be an external independent board evaluation.

Charity organisations in Ireland often face scale-related challenges - once they get to a particular size where staff are employed, and complex services are delivered, a tipping point is reached whereby the organisation needs to be run along the lines of a well-managed company. In such cases, the importance of an effective and efficient board cannot be underestimated.

Its role and operation should fundamentally be no different to that of the board of a company in terms of its responsibility to oversee the performance of the executive team, safeguard the interests of its stakeholders, as well as add significant value to the executive team in areas such as strategy, risk and crisis management.

Responsibility lies on the shoulders of unpaid board members to make a significant contribution as part of an effective, high-performing board team.

There is a movement internationally and within Ireland for charity/non-profit board teams to drive sustainable improvement in their effectiveness and performance.

The best performing boards, whether company or charity, have a strong partnership between the executive and non-executive board members, that balances strong oversight, debate and challenge with the addition of significant strategic value in a framework of corporate governance best practices. The board sets the tone, ethics and standards for any organisation.

Personally, I have been humbled by the incredible commitment of charity/non-profit boards to raise their game and excel as high-performing board teams.

We now have a strong charity regulatory framework in Ireland that is being embraced by the charity/non-profit sector.

Kieran Moynihan is a managing partner of Board Excellence (boardexcellence.ie ), which works with chairpersons, CEOs and board members to enable them to excel as a high-performance board team in effectiveness, performance and corporate governance.

Sunday Indo Business

Business Newsletter

Read the leading stories from the world of Business.

Also in Business