Good governance is all about the culture of an organisation – and the good news is that trustees have the opportunity to influence it, says Michelle Wright.
The past three years has been the most turbulent period for our arts organisations and charities. Having emerged from the fundraising scandals of 2015 with public trust starting to be rebuilt, we find ourselves now facing serious problems of sex scandals across the non-governmental organisation sector. And then there was the dubious fundraising practices of the President’s Club.
Charities have had issues of poor governance, corruption and safeguarding flung across the front pages of newspapers, making the already challenging job of volunteer governance in the charity sector even harder.
Often it is issues of culture that are both the problem and the solution when it comes to governance
At Arts Fundraising & Philanthropy and Cause4 we run training programmes and provide guidance on effective trustee leadership and governance. The more exposure I get to charitable governance, the more curious the system seems. As volunteer trustees, we assume all the responsibility of financial solvency, legal and regulatory requirements, and yet we put complete trust in our paid staff teams for delivery. When a scandal emerges the buck stops with the trustees, but as the system necessarily means we operate at arm’s length, how can we really be sure that we’ve done everything possible to protect our organisation from risk?
There’s no sure-fire way to do this, but I believe that trustees can go some way to alleviate risk if they focus on organisational culture. If we have clear expectations about the behaviours and processes in our organisations, our shared values and assumptions, then we arguably set a more effective tone for both board and staff to operate within.
In every organisation, culture works silently in the background informing how an organisation and its staff think, how it makes decisions and how it behaves. As such, often it is issues of culture that are both the problem and the solution when it comes to governance.
However, despite the importance of giving airtime to thinking about culture, the time constraints of board meetings mean that it’s rare that there is the time to discuss culture. In a governance-operating framework of some four to six meetings a year, the responsibilities of trustees invariably focus around compliance, fire-fighting and business planning, with little time for reflection or future focus.
In my experience there is usually a typical dynamic between trustees and staff. Broadly, the staff are dissatisfied with the trustees saying that they don’t help enough, and trustees want to help more but are often frustrated by a lack of clear guidance on what support is required. When I ask the question “Have you talked about what’s helpful?”, in 99% of cases the answer is no. I’ve seen working practices transformed by a simple 15-minute discussion on culture between trustees and staff.
The intangible and ubiquitous nature of culture means that it’s very difficult to measure, understand and value. And if we can’t measure it, how can we expect to manage it?
The trustees’ vision
While elements of culture can feel invisible internally, externally it’s a different matter. We can spot in a heartbeat how people treat each other, the speed at which business is done, whether there is the space for ideas and how people feel about a brand.
Many funders ask for a trustee to be present at key meetings, which is as much about the funder getting an immediate sense of what the dynamic is between board and staff, as opposed to wanting to ask trustees any searching operational questions.
So what should trustees be mindful of? Here are some areas to focus on:
- Align trustees with organisational values: This relates to people as much as to business strategy. New trustees should be sought that buy into an organisation’s culture as much as for the skills and experience that they bring.
- Time to talk: Organisational culture can only change if there is a shared view of what that entails. Everyone needs to have ownership and responsibility for doing the right thing.
- Proactive action: As issues come into the fray across the sector, are we as trustees clear of the steps we are taking in crucial areas such as diversity, equal pay and abuse-free working practices? Are we responding quickly when issues internally arise?
- Ethics matter: A clear ethics policy is helpful not only in determining what income we might bring in and from where, but our behaviours and ways of operating. Ethics should be part of the induction process for both staff and trustees and part of ongoing training.
- Audiences need to believe it: If our culture is positive, it will be rewarded with audience loyalty and a sustainable business. How we respond to and act on complaints is vital.
- Be careful what you measure: Is organisational culture included in our KPIs and do we know what audiences, stakeholders and funders are saying about us? Trustees need a regular view of how the organisation is perceived and to encourage diverse views when taking decisions.
Translating an organisation’s core values into governance structures is important. Allowing a poor culture, or ignoring problems, just means that nobody has an incentive to change. As trustees, we have a duty to care, and making an investment in the culture of an organisation can be an essential part of how we manage risk, both the risks we know about and those that might just catch us unawares.
This article is part of a series on the theme Fundraising for the future, sponsored and contributed by Arts Fundraising & Philanthropy.
Arts Fundraising & Philanthropy runs training courses on trustee leadership.