Loading…

DarkLight mode

News – 10.04.24

Form PF: Are you up to speed with the latest developments?

Through this insight we will bring to your attention the main changes in a bitesize manner so that you can stay abreast of the requirements as they may apply to your firm. … Read more

Insight

Tax relief on heritage assets: Am I eligible?

For assets considered to be of national heritage, relief from Capital Gains Tax and Inheritance Tax is available. … Read more

Upcoming event – 29.04.24

Governance code updates and advice for Further Education colleges from Buzzacott and the ESFA

Join Buzzacott and the ESFA for a governance update for further education colleges … Read more

Find us quickly

130 Wood Street, London, EC2V 6DL
enquiries@buzzacott.co.uk T +44 (0)20 7556 1200

Seeing is believing: why visibility is vital for INGO trustees

The legitimacy of international NGOs, and the policies and procedures that underpin their work, are rightly scrutinised by their stakeholders. Trustees need to have the right level of visibility to be confident they understand what is going on without getting lost in the detail.

Following the launch of “Governance: a guide for international NGOs” Buzzacott and Bond have launched a programme of events designed to take trustees through the key challenges boards of international development organisations face. This event was the third in the series.

The legitimacy of international NGOs, and the policies and procedures that underpin their work, are rightly scrutinised and held to account by their stakeholders, supporters and the media. There is always someone watching, whether it’s a funder, local partner, employee or volunteer. Trustees need to have the right level of internal and external visibility to be confident that they understand what is going on without getting lost in the detail.

This webinar explored:

What internal and external visibility looks like from a trustee perspective
What is it trustees need to look for and how to spot potential causes of concern
The culture of visibility – taking it beyond the process. Do staff feel comfortable whistleblowing, do they trust that concerns will be acted on appropriately, does the culture need to adapt if operating internationally?

Introduction

The session was led by Edward Finch, Partner at Buzzacott. The additional speakers were:

Tom Yih, Head of Charities Engagement at Charity Commission of England and Wales
Dr Orzana Nemat, trustee at AfghanAid

In his introduction, Edward explained that UK-based charities are bound by specific regulatory requirements, through the Charity Commission and are expected to have detailed procedures in places around core aspects such as accountability. There are added layers of complexity for international NGOs as they operate in places outside of the UK context and its legal framework. Being a trustee of these organisations has distinct challenges beyond the legalities - the volume of different types of information, the different places the information is coming from, and the varying filters this information might be given by people who report into the organisation.

Understanding the different contexts is important because as a trustee Board you may need to work with the executive to impose systems across different parts of your operations that aren't necessarily the same as each other. This may involve process to do with the things such as risk controls and reporting but also cultural elements - do people feel enabled to speak up? Are people in-country aware of how to speak up if they need to? As trustees, how do you know that you're hearing everything you should be? How do you know that information is flowing through the organisation properly to you? How is that information filtered so that you know you’re using your time to best look at what really matters and make decisions about the most important things?

There are challenges in terms of balancing the volume of information you're presented with, the time you get to spend with different people in the organisation and the depth of inquiry you can make about things that are happening. Crucially, when you are hearing things, having the right mechanisms for responding and then being confident that action is being taken on the things that you're finding out is key.

The ways large and small organisations deal with issues can vary immensely. Large organisations tend to have systems, processes and very formal frameworks are important components because the sheer volume of information is too much for staff and trustees to understand deeply. Whereas smaller organisations often have one or two key staff who know almost everything about what's happening throughout the charity, and it's those people that the trustees will be relying on personally, rather than formal, structured processes. Finding the right balance within that spectrum can be challenging for INGO trustees.

About the author

Edward Finch

+44 (0)20 7556 1411
finche@buzzacott.co.uk

Introduction

The session was led by Edward Finch, Partner at Buzzacott. The additional speakers were:

Tom Yih, Head of Charities Engagement at Charity Commission of England and Wales
Dr Orzana Nemat, trustee at AfghanAid

Part one

Part 1: The Charity Commission perspective: expectations and approach to how trustees should deal with these issues

The Charity Commission is the independent government department responsible for ensuring charities follow the rules and regulations of charity law. Given the scale of the UK charity sector, they focus resources and activities towards areas where they see higher levels of risk. They don't have a remit over overseas partners that aren't registered with them. A key part of external visibility is the Register of Charities, which uses the information that charities are legally required to provide each year. Last year (2022-23), just under 10,000 charities reported that they operated overseas with a combined expenditure of 5.8 billion, so the size of the international sector in England and Wales is vast.

There are six trustee duties that are a legal requirement for trustees. The Commission puts the onus on charity trustees to make effective decisions. The Trustee Duties are there to support trustees as often they are the first line of defence when something goes wrong. Visibility is an important part of those duties. As a trustee, you aren’t expected to know everything, so, it’s important to know when to seek and take advice. The Commission is a risk-based regulator and expect trustees manage, identify, mitigate or remove those risks.

As well as the Charity Commission website, other useful resources include the Association of Chairs and a guide called the Chairs Compass, suitable for all trustees.

Questions for the Charity Commission

Q: When do you submit a serious incident report?

A: Trustees have a duty to submit a serious incident report to the Charity Commission. The reality of serious incidents is that what is serious for one charity may not be serious for another one, and can depend on the size of the organisation. The Charity Commission website details guidance around serious incidents and what should and shouldn’t be reported. When it comes to serious incidents, Charity Commission guidance is that they require a full and frank submission of what's gone wrong as soon as possible. What they are generally looking to see is that the trustees are taking adequate and appropriate steps to address the issue, to give the Commission confidence that they don't need to be involved in a more substantial way. In cases where the incident is extremely serious or they don't have the confidence that the trustees can deal with it in accordance with their legal duties, they may ask for more information to be reassured that things are being dealt with. It gets a little bit more complex when it's not the charity itself but an in-country partner organisation.

Q: What about the situation where you are not a trustee, but you have an involvement in a charity in an overseas jurisdiction where you know that there are serious things that are not right, which the UK charities is not taking seriously. What scope is there for you to raise a complaint?

A: There's a couple of ways - you can either submit a complaint or a whistleblower report to the Commission.

Part two

Part 2: Explore how trustees can be confident that when issues or incidents occur they know about them and are able to confidently respond, with the Charity Commission.

The session explored some of the practicalities of how to be transparent in instances where a high level of visibility is needed to enable a confident and appropriate response, so that staff and stakeholders know that if an issue is raised it will be taken seriously.

Using the issue of Safeguarding as a pertinent topic, the Charity Commission explained the practical steps they expect trustees to take to manage safeguarding risks effectively.

On a basic level, the first things trustees should do is initiate a risk management process. Things to look at include:

Are you aware of the people the organisation/staff come into contact with?
Have you thought about the kinds of risks that are present and what are the potential risks?
Have you documented those risks as part of a risk matrix, that sets out what the risks are?
Have you figured out, as a trustee board, how you're going to mitigate those risks?

The Charity Commission added that they don't want charities to be completely risk averse and in the context of international NGOs and their operations some element of risk-taking might sometimes be needed, however, trustees must be mindful of the risks and take steps to mitigate their impact should they occur. For safeguarding, the first step for trustees will be that the organisation has an appropriate safeguarding policy that sets the standard you expect from the whole organisation. The Commission expects trustees to have usable and used policies in place that are relevant to their organisation, that sets out the standards it expects from the people who are involved in the charity and clearly defined reporting requirements of trustees.

This feeds into visibility - trustees won't necessarily know what’s happening in the charity day-to-day, so it’s important for staff, volunteers and those in the community to know when and how they should escalate issues to the board. If trustees delegate certain areas of the charity's work to other people, especially safeguarding, they need to ensure that they also understand the organisation’s priority risks and when to escalate issues. As a trustee, it's important to just be reflective about how your processes are working and if they are being successful. Seek feedback and consider doing an annual review or a regular review of your most important policies related to risk areas.

Read the summary from speaker Dr Orzana Nemat, trustee at AfghanAid since 2013 based in Afghanistan.

AfghanAid is a British charity working in Afghanistan over the last 40 years. Rural Afghanistan has always been a priority in terms of community development, livelihoods, building, basic services, delivery capacity and focusing on the role of women, economic empowerment and the issues around climate change and natural disasters, and in times of emergency assistance.

De Nemat highlighted some aspects of the complexity of British charities working overseas, where there are different rules, regulations and expectations. There is upward accountability to the Charity Commission, donors and international supporters, and, at the same time, downwards accountability, transparency and visibility, to the people and local communities. She explained there are two sides to this. Using the example of the loss of a staff member, there were policies and rules to adhere to in terms of safeguarding and reporting to the Charity Commission. Then, there was consultation with the community on what the appropriate support would be to the family. Dr Nemat observed that it didn’t mean prioritising one over the other, rather it required working in parallel with the communities they consulted. From the report detailing the community response, the trustees were able to identify and enact the recommendations.

Working in disaster situations means that frequent incidents occur. There are risks in every step of the services you deliver and it’s how you address them that is important. More broadly, having worked in the sector for many years, she has seen in numerous cases with conflicting approaches. For example, in a case of bribery to the local institutions, one organisation might be very principled and feel accountable to all stakeholders, whereas another might be more pragmatic and focused on the organisation’s mission being the most important thing even if it means bribing their way, for example, to being able to feed the people who may die otherwise. Often, it’s a question of survival in those cases but it creates confusion to the local authorities because one organisation will pay while another won’t. The expectation for trustees is to stick to the organisation’s principles even if it means having to withdraw from a situation. Sticking to principles can be helpful when working in complex situations because it’s the red line that can’t be crossed, but in terms of your overall goal of saving lives, assisting the most neediest people, then you may have to pay the price, meaning withdrawal from an area that you’ve worked hard in, losing the funding and stopping the operations, which is also costly.

Dr Nemat raised the point about reporting, in the context visibility and transparency as a trustee. The amount of reporting required creates hurdles for trustees given their responsibility requires them to read everything that they are sent. This is over and above the responsibility of attending meetings, being aware and acting on what is going on and providing fair advice. In some situations, there are serious consequences if trustees aren’t doing their job properly, so timely reporting and investing a little more on the mechanism of reporting is important. In my experience, there has always been an excellent team who have put together the reporting in a way that trustees could input into the strategic direction of the organisation. At times when we didn't feel satisfied, we were open about when we needed more information. This feeds back to the issue of knowing how much information is really enough. AfghanAid now has a monitoring team as over the years, more and more information has been required.

A concluding question from Dr Nemat was: How much is the right of government regulatory systems for the transparency and effectiveness of the work, and in situations where a government has other interests at play, such as they only allow an INGO to work if they recruit their people. So, how you deal with that in terms of accountability and transparency, and the principles mentioned earlier?

Final reflections

Final reflections and takeaway questions

How do you share information with other organisations and get support and learn lessons from each other?
How do we future proof your organisation so that staff don’t get overburdened and it is set up to be effective?
Do you need to focus only on the areas that are most importance to make sure you don’t lose sight of the issues and are reflective about how that whole process works?
The Charity Commission and Charity law does generally protect trustees where they've acted with reasonable care and skill and where they've made a best effort - things will go wrong but it's how trustees approach and manage what has happened that is important.
Focus on the risks that matter most and show that you've addressed them.
Where there is tension between your principles and upholding some things that easy laws to apply in the country they're made in, but more difficult to apply in the countries you're trying to apply them in, make sure those questions come to the trustees and they make that balanced decision based on the facts and information that are available.

How Bond and Buzzacott support International NGO trustees

Join quarterly meetings. These events are open to all trustees of INGOs and focus on areas of common concern.
Read the Buzzacott and Bond guide. Governance: A guide for international NGOs is an up-to-date, relevant resource and reference point for practical support and guidance.
Join the online Governance Forum for Trustees of INGOs, a private online forum for trustees of international NGOs to share learnings, discuss concerns and hear from governance experts. Curated by Buzzacott and Bond. Contact Jemma Ashman for more details and to sign up.