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Governing your organisation

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This page explains key things trustees need to consider in the governance of their voluntary organisation in light of the covid-19 pandemic. It includes links to government guidance, and practical suggestions to help trustees lead their voluntary organisation effectively. This page is primarily aimed at trustees and senior leaders, be they paid staff or volunteers.

Run meetings

Meeting size

    Hosting virtual or hybrid meetings

    • The Charity Commission understands that covid-19 continues to have a major impact on trustees deciding if and how they can hold meetings.
    • When considering hosting a meeting on a remote or hybrid basis, you should check whether your organisation’s governing document allows you to do so.
    • If there's no clause in the governing document allowing you to do so, one option is to see if the trustees can amend the governing document to facilitate changes to how and when meetings are held. Read the guidance on how to make changes to your charity’s governing document on GOV.UK
    • Generally, if there's no such clause in the governing document and you decide to hold meetings on a remote or hybrid basis, in the short term the Charity Commission will understand and take a proportionate approach, provided this is in the charity’s best interest. You should record the decision and the reason for it to demonstrate good governance. Read the Charity Commission’s guidance on holding meetings on GOV.UK.
    • This is particularly important as the Corporate Insolvency and Governance Act 2020 which permitted charitable companies and CIOs to hold AGMs and other members meetings online regardless of their governing document, ended on 30 March 2021.
    • The Chartered Governance Institute has developed practical guidance for charities on how to approach your first virtual or hybrid AGM.

    Postpone, adjourn or cancel meetings

    • If you need to postpone, adjourn or cancel your organisation’s AGM or other meetings as a result of covid-19, you need to make sure that you follow any rules in your organisation’s governing document that allow for postponement, adjournment or cancellation.
    • If there are no rules in your governing document, but you decide that this is still the best course of action for your organisation, you should record this decision and the reasons for it to demonstrate good governance. For further information read the Charity Commission's guidance on postponing or cancelling meetings on GOV.UK.

    Making good decisions

    • Organisations are having to make different types of decisions. McKinsey’s 7S model can help you think about the types of decisions you may be having to make.  
    • Under times of stress, science suggests that our decision-making capability is reduced.  
    • It can be helpful to break down the decision making process. Some key questions to consider include:
      • What decisions do you need to take? Be clear about the exact decisions you need to make.
      • What is the time-frame? How urgent is the decision? This will help you prioritise your decision-making.
      • What information and data is required to make the decision? This might be for example financial and or evaluation data.
      • Can you collect this in a meaningful and appropriate way? If not, you may have to make decisions based on imperfect information and data.
      • Who needs to be involved and how will it be communicated? Make sure that the right people are involved in making the decision. Decisions will need to be communicated to staff and or volunteers. Think about how you are going to do this.
    • Tools to help you make better decisions include:
      • Our scenario planning guidance will help you assess uncertainties in your external environment and plan how you are going to respond.
      • Tools for Tomorrow (PDF) is a practical guide to strategic planning for voluntary organisations.

    Report a serious incident

    • The Charity Commission requires charities to report serious incidents.
    • If a serious incident happens in your charity, you need to make sure there is a prompt, full and frank disclosure to the Commission.
    • To find out what is a serious incident and whether or not you should report it, read the Commission's guidance on how to report a serious incident in your charity.
    • The Commission has recognised that the pandemic has resulted in some unprecedented challenges and scenarios that were not envisaged.
    • To help you decide if you need to report an incident that is relevant to the pandemic, the Commission has produced a supplementary examples table (PDF).
    • You should still exercise judgement in deciding whether an incident is significant in the context of your charity. In making this decision, you should take account of your staff, operations, finances and reputation. For more detailed information, read the Commission’s guidance on reporting serious incidents during the coronavirus pandemic.

    Manage board dynamics

    • The behaviour, culture and overall performance of your board is critical to your charity’s success. This is clearly outlined in the principle of board effectiveness in the Charity Governance Code.
    • During times of uncertainty and increased anxiety, board dynamics may become more difficult to manage and relationships between individual trustees may deteriorate.
    • To help manage this, here are some good practice suggestions around building good board relationships:
      • Make sure that all trustees are clear about what is expected of them by law and in practice. During times of crises, expectations may change. Be clear about these.
      • Ensure that a culture of mutual respect and trust is encouraged. This can be supported by re-visiting or developing a board code of conduct.
      • Continue to make time for team building activities, both formally and informally. For example, board away days can be a great opportunity for trustees to get to know each other better and can support the board to work well together as a team. The Association of Chairs have some tips on how to run a great virtual away day.
      • Provide individual trustees with opportunities to review how they feel about their role and their relationship with other trustees. This provides an opportunity for issues to be addressed early. You can do this with individual trustee performance reviews.
      • Being aware of the amount of support versus the amount of challenge you offer each other and your executive (paid or unpaid). You want to aim for a supportive environment where individuals feel comfortable to challenge each other in a constructive way. This will allow for scrutiny of decision making.
    • If you are finding it difficult to resolve disputes amongst your trustees:

    Financial reporting

    • The Statement of Recommended Practice (SORP) – making body has published guidance about what and how to report as well as providing other useful signposting information.
    • In your trustees’ annual report additional disclosure around the impacts of covid-19 is required.
    • A fall in the valuation of investments may have an effect on the valuation of your defined pension benefit schemes. This should be reflected in the financial statements and fully explained in your trustees’ annual report.
    • Any disclosure on significant judgements and estimates will need to be detailed and updated.
    • Any changes in underlying assumptions and uncertainty will need to be explained.
    • You will need to consider your going concern basis and any associated material uncertainties. This may have an impact on the:
      • audit report
      • narrative for financial reporting
      • accounting policy disclosures in the accounts.
    • Both adjusting and non-adjusting events will need to be considered. For more information about post balance sheet events note, read Haysmacintyre’s article on covid-19: charity financial reporting questions.
    • If you are unclear about how covid-19 has affected financial reporting requirements for your charity, seek professional advice. Contact Charity Finance group for training, resources and specialist support.
    • For more in-depth guidance:
    • If you expect there to be a delay in submitting your annual return or financial statements then contact the Charity Commission.

    Facing financial difficulty

    Consider merger or collaboration

    Check for and manage potential insolvency

    • There is no statutory definition of ‘insolvent.’
    • In practice there are two separate tests for insolvency. Failure of either might be an indication of insolvency
    • The charity cannot pay its debts as they fall due for payment
    • The value of its liabilities exceeds the value of its assets
    • To find out more about these tests and signs of potential insolvency:
    • In June 2020 the Corporate Insolvency and Governance Act 2020 made some temporary changes to insolvency and corporate governance law.
    • Provisions of the Corporate Insolvency and Governance Act 2020 relating to wrongful trading have been extended to 30 September 2021. Temporary provisions around moratoriums have also been extended till 30 September 2021. Read the government’s summary of these changes.
    • If you are dealing with potential insolvency, you should seek professional advice at an early stage in order to rectify your position. When obtaining professional advice, you should:
      • meet more frequently with your board
      • keep a record of key decisions and why they were made
      • keep a record of any other arrangements.
    • The Commission’s guidance outlines what steps you might consider taking if insolvency is a possibility.

    Manage insolvency and potential closure

    Page last edited Sep 09, 2021

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