The Management Committee/ Trustee Board is not only required to be accountable, but to be able to demonstrate this to stakeholders through ensuring that appropriate systems and procedures are in place. By doing so, they reduce their risks of personal liability should things go wrong.
This is also important in demonstrating the organisation is meeting the Public Benefit Requirement.
Who are you accountable to?
The actions and decisions of the Management Committee affect a range of people, including the organisation's membership, staff and many people outside the organisation. These people are called stakeholders.
Stakeholders include, for example:
- service users;
- statutory agencies;
- volunteers; and
- other individuals, groups or organisations affected by your work/activities.
Why do you need to demonstrate accountability?
The Management Committee are in place to manage the resources and activities of the organisation on behalf of its members, supporters and other stakeholders. Their management therefore needs to be both effective and transparent.
The following examples highlight some of the areas where it is important for the Management Committee to show that it is accountable.
|Donor||A donor asks if their donation was spent for the purpose it was given.|
|Insurer||An insurance company asks for evidence that all reasonable steps were taken to prevent harm from occurring at a charity event.|
|Funder||A funder requires evidence that its money has been spent as agreed.|
|Service user||Being able to justify the removal of a particular service.|
|Statutory Agency||Being able to demonstrate that legal requirements are met (for example, the Food Standards Agency requires evidence that certain standards are met in food preparation at a community café.|
This can only be done when appropriate systems and procedures are in place to enable the committee to be adequately informed and have effective controls over the organisation's operations.
Where organisations are not accountable, there can be a range of negative impacts, for example:
- Where staff are not properly managed, their work will not be monitored for quality or output. This can lead to the whole organisation under-performing, which can have consequences for future funding. It can also lead to poor staff/volunteer morale;
- Where financial resources are not properly managed, it increases the potential for fraud and this places the organisation at increased risk, which can have consequences for future funding; and
- Where organisations are not engaged with stakeholders they can find they are delivering services which are no longer relevant.
How can you demonstrate accountability?
To be able to account for the organisation, the Management Committee must ensure that appropriate systems and structures are in place to:
- safeguard the organisation;
- ensure its practices are legal;
- ensure regular monitoring and reporting of activities and finances; and
- evaluate activities and performance against targets.
It simply isn't enough to say that these things are done. There must be evidence through your systems and procedures that demonstrate accountability across the organisation.
Indicators of Accountability?
- the organisation has adequate systems and structures to comply with relevant legislation (e.g. health & safety, fair employment, child protection, fundraising etc), accessing support and advice where required;
- the organisation complies with its governing document and any contractual agreements;
- they have assessed the major risks faced by the organisation, have taken appropriate action to reduce these risks and are satisfied that the level of risk faced is acceptable;
- they engage with, and consider the needs of, the organisation's members and stakeholders (e.g. donors, staff, service users);
- public money and donations are properly applied and managed. If a charity, they ensure that money/assets are applied towards their charitable purposes;
- they plan effectively for the organisation and its resources;
- reporting structures are in place so that all relevant information, advice and resources can be accessed to carry out their role effectively; and
- there are adequate records to demonstrate accountability;
financial management systems and fundraising activities are appropriate for the organisation and comply with the law.
Your systems and procedures should be helpful rather than a hindrance. They should be kept up-to-date, in line with best practice, communicated throughout the organisation and contribute to the organisation's overall effectiveness.
Demonstrate accountability by basing your practices and procedures on relevant quality standard systems such as: