Principle 4 - Exercising Control
There are three types of reserves:
As part of the annual return to the Commission, it asks trustees to "confirm that there are no serious incidents or other matters that the trustees should have brought to the Commissions's attention and have not done so already." The Commission will be producing guidance on serious incident reporting in the near future.
The requirements for financial accountability produced by the Charity Commission are set out here.
Developing a culture of openness in charities can be challenging because there are some things which are confidential and should be treated as such. However committees should consider where the boundaries are and how they can communicate with people about their organisations. The creation of the Charity Commission for Northern Ireland has given the public more access than ever to information about charities.
Ethics in Fundraising
The recent report by the Parliamentary Public Administration and Constitutional Affairs Committee: The 2015 charity fundraising controversy: lessons for trustees, the Charity Commission, and regulators shone a light on the ethics in fundraising in charities. It states,
The Management Committee is ultimately accountable for the organisation. They are therefore responsible or liable for the consequences of actions taken or not taken by the organisation, its staff or volunteers and other Management Committee members.
What this means is that the Management Committee may be held responsible for making good any loss or damage (financial or otherwise) to the organisation or to third parties and may be held personally responsible, where relevant.
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
Sub-committees are set up so that a small group of management committee members (and sometimes co-opted experts) may focus in detail on a particular issue. This allows the management committee to ensure that sufficient attention is being paid to the detail of specific issues without one topic dominating the committee agenda at every meeting. An example of this may be a sub-committee dealing with finance and personnel, fundraising or a specific project such as a new building or a merger.
A Management Committee/Board can delegate authority for a task but not responsibility. They will still be held ultimately accountable for any decisions or actions taken. They must therefore set up appropriate systems to monitor the use of delegated authority. More....
Management Committees can struggle to effectively manage the most senior staff member in the organisation. This can be for a variety of reasons, sometimes the most senior staff member has been with the organisation a long time and is more experienced than some members of the committee. Generally the most senior staff member will have more information about the day to day running of an organisation.