UK Update: Kids Company – Lessons for the Charity Sector

Last week saw the publication of the Charity Commission’s long awaited report following its inquiry into the Kids Company case (see here for full details).

While the details surrounding this case have been well documented over a number of years now and look set to continue to generate much discussion, the area of the report that particularly piqued my interest was around the issues identified by the Charity Commission for the wider sector.

The report highlights a number of key themes which may have significance for the charities sector at large and include:

• Board Composition – the importance of checks and balances and having the right blend of skills and knowledge on charity boards so as to avoid potential power imbalances. It also recommends due consideration being given to terms of office for board members as to board diversity;
• Operating Model – the report highlights that there will be a number of different ways in which to deliver benefit to beneficiaries of charities and for organisations to come up with innovative models of delivery. The Charity Commission notes however, that while innovative solutions are important, so too are appropriate risk assessments in taking forward such models of delivery;
• Financial Planning –  in addition to due consideration of the operating model of the charity, it also stresses the importance of proper financial planning and having a properly considered reserves policy; and
• Growth of Charity – the Charity Commission highlighted the importance of robust planning for when an organisation grows and develops. Considerations must be had to infrastructure, governance and resources to ensure that they all ‘keep pace’ with the growth of an organisation.

The relevance of these themes will vary from organisation to organisation depending on size and scale as well as area of operation. While there is nothing particularly ‘new’ in terms of thinking, what these key themes do is serve to highlight is the importance of good governance and the ways in which principles of good governance should underpin all aspects of the management of a charity.

Issues around good governance have become much more prevalent in recent years. As we emerge from Covid, it is an area in which we are seeing an increase in instructions as organisations seek to ensure that they have got their ‘house in order’.

If the recent report into the Kids Company case has got you thinking about a particularly thorny governance issue you have been grappling with or that it is perhaps time for a more general health check of your organisation’s governance arrangements then we would be delighted to assist.

We are pleased to offer a range of packages of governance related support with something to suit everyone. We would be very happy to have an initial discussion with you to see how we can best support you in ensuring your governance arrangements are fit for purpose.

Please do get in touch to see how we can assist.

By Emma Maxwell, Burness Paull LLP, Scotland, a Transatlantic Law International Affiliated Firm.  

For further information or for any assistance please contact ukscotland@transatlanticlaw.com

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