Monday, 1 February 2016
The Importance of Good Governance
Today saw the release of the PACAC report on the collapse of Kids Company. Many of their observations chime with what I and ACEVO said last summer. They are right to say that the government and trustees gave Camilla Batmanghelidh far too much freedom. On top of that, there was no effort to deal with catastrophically low reserves. And they are right to underline the importance of effective and healthy governance.
What we saw was a total failure of governance. All of Kids Company’s funds were driven towards the front line. This left the back office woefully under supported. A lack of support which, unsurprisingly, led to the charities collapse. Here, the golden rule of charity governance – that charity is delivered on the front line, but it begins in the back office – was forgotten.
Given this, PACAC were right to condemn the Kids Company trustees as ‘negligent’. What they did not then do was provide an image of how better governance could be promoted. Regulation alone cannot ensure best practice. What we need is a government, and regulator, which supports the sector to be better. I said this last year, when I wrote to the Chair of the Charity Commission, William Shawcross. I told him it is better to prevent, than to fight fire. What we heard today only underlines the importance of this. The additional funds recommended by PACAC should not be used simply to beef up policing. By providing additional support, it can help the sector flourish.
And a flourishing charity sector is good for society. This is why I, and ACEVO, will be looking to create a Charity Excellence Hub. This will be a crucial first step towards realising a more effective charity sector. But we cannot do this alone. We need support from others. Through this, we can build strong governance for the future, and prevent the collapse of yet more charities.
I have been hammering this message home today, both on BBC Breakfast and the Today Programme. My Director of Public Policy, Asheem Singh, said the same on BBC News. The message is clear – if charities are to continue the excellent work which they do, then we must invest properly in their governance.