Charity governance during the Covid-19 pandemic
The Covid-19 pandemic presents complex issues for charities to navigate and is forcing many to change how they would usually function.
Regardless of the disruption, the responsibilities of trustees are heightened in the pandemic and they must remember to continue to fulfil their governance of their organisation. In this article we look at some of the governance issues trustees need to have control of in order to run their charities as effectively as possible.
Hold remote board meetings and AGMs
In current circumstances it is unlikely that trustees will be able to have face-to-face meetings or to hold AGMs. Consideration needs to be given on how best to hold meetings while ensuring that all trustees can participate in the decision-making process. The Charity Commission says charitable companies and CIOs can hold AGMs and other members’ meetings online (this has been made possible by the Corporate Insolvency and Governance Act 2020 and applies until 30 December).
For other types of meetings, or for any other type of charity, the Commission advises trustees to check if their charity’s governing document allows them to hold meetings online or by telephone. Where it does not, it may be possible to amend it to allow online meetings to be held.
Monitor the management team
Management has day-to-day responsibility for managing the charity’s response to the pandemic, but trustees have independent control over, and legal responsibility for, a charity’s management and administration. Monitoring management activity, such as assessing their actions and keeping up to date of developments within the organisation, will ensure trustees maintain strategic oversight and control.
Closely monitor service delivery and income stream
It is essential that trustees continue to monitor the financial and operational health of the organisation during the pandemic. Work alongside the management team to review the financial impact of the pandemic and how your charitable activities can continue to be delivered.
Monitoring cashflow and creating budgets will help you to manage your finances. Doing both will provide a clearer picture of how your charity may need to restructure and adapt to run more efficiently.
Trustees should be aware of the risk of being penalised for any late filings and payment of taxes.
Protect from cybercrime
Covid-19 has seen a rise in fraud and cybercrime against charities, and trustees should be on high alert for any suspicious activities. The increase in remote working and virtual activities and sign-off processes may make existing financial procedures vulnerable to fraudulent activity. It is important to put in place reporting systems and train your management and administration teams on the signs of fraud that they should be looking out for. More information can be found in the newsletter article ‘Five steps to protect from charity fraud’.
The Charity Commission expects trustees to take their responsibilities seriously and with careful planning, clear processes in place and the right professional advice, trustees should be in a good position to ensure they act in the best interests of their charity in these challenging times.
If you would like to discuss the governance of your organisation, please get in touch with our charities team.