Today I’m excited to be at the Trustees Week Conference in Glasgow, which marks the start of Trustees Week to celebrate all the great work that trustees do across Scotland. Today also marks the launch of the new Scottish Governance Code for the Third Sector.The Code has taken almost a year to develop and is produced by Scotland’s Third Sector Governance Forum.
The Scottish Governance Code is important – it’s a collective statement by the sector, for the sector, on what good governance looks like. It took almost a year to develop and is designed to work for all third sector organisations, whatever their shape and size.
The Code is not a legal or regulatory requirement. Instead it’s designed to be aspirational, a tool for trustees to reflect on and improve governance in their own organisations. The Code is not about rules, instead it’s a set of five fundamental principles to help guide trustees to do the right thing, in the right way.
The five core principles build on what we hope is a reasonable assumption – that all trustees should understand their legal and regulatory responsibilities. The principles come under the main headings of:
I’m going to use Trustees Week to talk through each of these five principles, and will start with Organisational Purpose, which is the core to good governance.
Well because the board have ultimate responsibility for directing the activity of their organisation and delivering its stated purpose. Each trustee must understand and commit to what that purpose is, to make sure they achieve their organisation’s aims. The first place to start with this is with your governing document. Whatever you call it – your constitution, your memo & arts, or your trust deed, this is your rule book that will establish the boundaries within which your organisation can operate. So your governing document has to be fit for purpose and must clearly set out how the trustees govern and how they make decisions as a board. It’s a vital document, so it’s important to keep it up to date and make sure all trustees are familiar with it. New trustees should get a copy when they join the board, and it should be reviewed on a regular basis.
Unfortunately many organisations have a governing document that is unfamiliar to their trustees, or is even out of date. Sometimes boards have chased streams of funding or moved into new ways of working that are just not in line with what they were originally set up to do. As trustees, you can’t allow this to happen. You have a duty to ensure that your organisation conforms to its aims and objectives and that it meets its organisational purpose.
So here’s an action point…at your next board meeting why don’t you leave some time on the agenda to relook at what you were set up to do and explore whether all your activities are in line with your organisational purpose. If they are, that’s great, you’ve taken the first step on your journey to good governance.