Good governance is about the best process for making effective decisions. It is the core criterion for this health check and is fundamental to the integrity of a functional institution. When examining good governance in your institution, you should take into account a number of elements:
- Governing documents
Good governance means that decisions are consistent with the relevant governing document of your institution. The governing document defines the objectives, the area you serve, powers, rules and procedures of your institution.There is a number of different types of governing documents, including, for instance, a Constitution for an association, a trust deed, articles of association, or a Memorandum of association.
An effective Board will provide good governance and leadership by ensuring the delivery of the institution’s purpose. To this end, there should be a written policy as well as an induction process covering the roles and responsibilities of Trustees, Directors and Management Committee Members and essential information on the institution. They have a duty to be informed and should be given the following elements as a minimum as part of their induction process:
- A copy of the governing document which sets out the objectives, powers and operating rules;
- A written guide to their responsibilities and roles.
- Annual General Meeting (AGM)
The aim of the AGM is to provide the trustees and/or the committee members the opportunity to explain their management of the institution to the members. It also provides the members of the institution with an opportunity to ask questions before voting on business items on the agenda.
A charity’s AGM is held once a year and members of the institution can attend and vote. The governing document will state when it must be held. This may be in a particular month or within a certain period after the end of the financial year.
The business that must be considered by the AGM will usually be specified in the governing document or by underlying legislation.
- Conflict of Interests
‘Conflicts of interests’ arise when the best interests of a trustee are, or could be, at odds with the best interests of the institution itself. Conflicts of interest may be ongoing, when, for example, a trustee who is related to a service user or who is also a trustee for another local institution.
- Mission Statement/Value Statement
The institution’s mission statement/value statement should make clear what the charity is set up to achieve; how the institution intends to achieve its objectives; and who are the beneficiaries of these objectives. For more information, see the Charity Commission’s website.