There are three types of reserves:
The Management Committee must be able to account for everything the organisation does. Even though your group or organisation may have paid staff and/or volunteers, the Management Committee is ultimately responsible and may be held liable for the consequences of actions taken or not taken.
However the Management Committee is not only required to be accountable, but to be able to demonstrate and communicate this to stakeholders by ensuring that appropriate systems and procedures are in place. By doing so, they reduce their risks of personal liability should things go wrong.
Independance of decision making is important for a board to ensure that it is complying with its governing document. The board must put the best interests of the organisation first in all its decision making and effectively manage conflicts of interest.
Management Committees need to ensure that they have assessed the types of insurance that the organisation needs to adequately protect its assets, activities, staff and volunteers. It is always important to seek professional advice in relation to particular types of insurance. More
Management Committees are responsible for safeguarding the organisation, its assets and third parties, including staff and volunteers. This requires being aware, not only of the current activities and circumstances of the organisation, but also being mindful of what could happen in the future in order to minimise any potential negative impact on the organisation.
Principle 4 - An effective board will provide good governance and leadership by exercising appropriate control
As the accountable body, the board will maintain and regularly review the organisation’s system of internal controls, performance, and policies and procedures, to ensure that:
They may be as a result of internal developments (e.g. loss of key staff or Management Committee expertise) or external developments (e.g. a reduction in funding sources). The leadership role of the Management Committee in ensuring that the organisation is able to move smoothly through a period of change is crucial
Managing change effectively
Voluntary organisations encounter many milestones including:
The operating environment for organisations is continually changing. This change may be in government policy or in social trends, it may be legislative. The Management Committee has a key role to play in ensuring that an organisation is aware of the environment. This can be done through being well linked in with other organisations and individuals and ensuring that committee members are keeping up to date with trends and changes in the environment.