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Posted by Sarah Brown on 27 Jun '23

Five reasons you need to read this

I was excited to share what I have learnt just back from holiday. Still, I am saving it for another blog to instead excite you about governance and why it is critical whether you are a business, a charity or even a prime minister.

I never thought I would write that sentence, but I hope my five examples from the last fortnight convince you.

I was excited to share what I have learnt just back from holiday. Still, I am saving it for another blog to instead excite you about governance and why it is critical whether you are a business, a charity or even a prime minister.

I never thought I would write that sentence, but I hope my five examples from the last fortnight convince you.

  1. The Titan Sub disaster - concerns over whether the vessel met industry safety standards have come to light since the implosion.
  2. English cricket - racist, sexist, classist: the Independent Commission for Equity in Cricket (ICEC) report has today identified deep-rooted and widespread problems at every level.
  3. Boris Johnson - law-breaking and deliberately misleading parliament during Lockdown confirmed by the Commons Privileges Committee.
  4. The Metropolitan Police and the Crown Prosecution Service(CPS) - three years and still no decision on corruption related to the Stephen Lawrence case
  5. Charities - a report and an investigation into poor management and or misconduct with funds not being used as they should

These examples are very different but the same. In each case, the accepted norms, rules or laws have been disregarded, and things have gone wrong in one case, fatally. I think they demonstrate why something that can appear to be just a "bore", i.e. governance provides a structure that protects us all and is ignored at our peril.

Here are four things I think we can learn:

Letting excitement get in the way of good judgement

I have been involved in new product development(NPD) for most of my career, so I know how exciting it can be to have a great idea. The importance of what you are doing, urgency because you need to act fast, or the feeling that this a groundbreaking new idea can all convince you that we can ignore the existing rules/laws for the moment because we haven't got the time or they don't fit with the new thing we are doing. Cutting corners is justified, and anyone who queries it is negative or boring.

The best way to avoid this is to have criteria for success before you start any NPD or activity and clear values supporting compliance with the law and being safety conscious, for example. Keep checking that you are complying with your criteria for success.

Have a culture where challen

ge is welcomed

Bosses can't be good at everything and often are "big picture" rather than detail. Their focus may be on inspiration, but you need a culture like Toyota's where anyone in the factory can stop the production line if they spot a problem. Don't be like the planes that crashed because no one wanted to tell the pilot they were running out of fuel!

Encourage challenge and be grateful for the pedantic person who knows the rules and checks that they are being followed.

It's more than complying with the written rules and laws

Again culture and tone are fundamental. That is why it is called institutional racism; it is built into the culture. There needs to be clarity about what is acceptable behaviour which is about the spirit of the organisation, not just following the written guidelines or legal requirements. The five examples above are all caused by cutting corners and/or a culture that has grown over time and has yet to keep pace with the broader cultural and societal changes. Cricket and the police are the clear examples of this.

High standards are expected of organisations in the public sector or using public money or donations

Breaking the rules by organisations or people who are supposed to be acting for the good of society seems worse than a company that is doing it for profit! It also undermines trust in sectors that need it, i.e. charities and politics.

However, particularly for charities, the Charity Commission makes it easier to have good governance as it has been involved in developing a good practice guide, The Charity Governance Code.

Assets removed from a charity

If you are unaware of the news stories about charities, one is a report about Resham Helping Hand finding that the trustees were responsible for misconduct and/or mismanagement. The Commission ordered the charity to wind up and directed its liquidated assets of over £270,000 to an unconnected charity with similar charitable objects. The inquiry found that the charity had an unsustainable business model, which saw only 5.5% of its spending go on charitable activity in the financial year ending April 2018, as well as little to no governance.

Lack of governance

The other is an investigation into the Portsmouth charity Forgotten Veterans UK – as financial accounts state, the organisation has tens of thousands of pounds without supporting records. The report by independent examiner Helena Wilkinson of Price Bailey LLP chartered accountants said Forgotten Veterans' receipts and payments accounts show it received £150,903, but 'no records have been provided to match the record of the donations received to the deposits made of cash deposited, and cash balances may have been retained and not deposited at the CIO's [Charitable incorporated organisation's] bank account'.

The independent examiner said, 'limited receipts were provided to me as independent examiner'. 'Total expenditure amounted to £143,284, with receipts for only £54,332, leaving £88,952 of payments without any supporting records,' she added.

'In addition it is not possible to ascertain whether expenditure relating to the restricted grant funding was incurred in accordance with the funding agreement requirements due to the lack of evidence available to support the transactions made.' The report said there was 'no explanation' for 'the opening bank balance position per the receipts and payment for 2020' being different to the bank statements by £1,241.

Ms Bailey also pointed out: 'Finally, none of the minutes of the CIO were minuted prior to the meeting in December 2022, and therefore there is no evidence to support the decision making of the Trustees.'


The rules and regulations, the good practice of good governance, provide the framework to allow the exciting bits to happen, the bits that fulfil our purpose, change the world and make a profit. If you need help with constructive and objective support to audit or improve your governance, ring me for a free chat.

Read more:

Good charity governance - the highly tuned mechanisms that help you fulfil your purpose

Trustee support

Responsible Organisation Charter - support for governance in business