Charity Reform, Good Governance & “Oddities” in Students’ Unions

On the face of things, mixing charity governance with democracy can be like mixing oil and water. It is important to note that Charity Governance- the law, regulation and best practice of it- all flows from the notion of the “strong” giving to the “weak”- the notion of charity.

Similar but different to this is the notion of democratic self organisation and self government- students’ unions are in law collectives of members doing things for themselves. This reveals some differences between what the commissioners regard as “best practice” in a charity and where students’ unions are today.

A glance, for example, through the charity commissioners’ guidelines might fill us with horror. For example:

  • Students’ Unions’ “Trustee Boards” normally consist entirely of the beneficiaries of the charity- this is very rare and goes against the guidelines (usually for conflict of interest reasons)
  • If we consider the sabbaticals or executive committee to be the “Trustees”, the Trustee board will be entirely elected; again this is very rare and goes against the guidelines (these are about managing the skills and knowledge mix of a board effectively)
  • Again if we consider the sabbaticals to be the “Trustees”, the Trustee board will also all be paid (this issue is about conflict of interest)

In addition Students’ Unions often find themselves in receipt of what we will call here “accidental trustees”. Officers may stand for a position or role and either be unaware of, uncomfortable with or merely indifferent to the “slice” of their role that is “the trustee”. Sometimes, with all the training and support in the world, there is little that students’ unions can do about this.

It is of course important to note that these are issues of guidance and best practice for Traditional Charities. Becoming directly regulated by the commission does not mean that we will have to change overnight. It does, however, place an onus on Students’ Unions to consider carefully the reasons behind the guidance and be able to demonstrate that despite these differences, Students’ Unions are Governed well. The challenge is to ensure that democracy- being run by the members; and governance- ensuring the organisation is run well- are able to mix.

More Issues

In addition to those mentioned above, the Commission is traditionally concerned about the divide between management and governance. For example:

“When charities take on staff there should, ideally, be a clear divide between governance – the role of the trustees (who are also directors if it is a charitable company) – and management – the role of the chief executive or management who direct the daily running of the charity. When trustees are still involved in the daily activity of the charity, the division of labour between governance and management can be difficult to maintain”

Students’ Unions will need to ensure that they consider carefully the respective roles of elected officers and staff. It may not be as simple as it was in the past- for example, whilst there are clear staff-student protocols in most unions, student media (an oft problematic area legally) is almost always run and operated without staff input; the finance office the other way around. At the very least this may be hard for the commissioners to get their head around!

“At the heart of a significant number of situations that result in a Charity Commission Section 8 inquiry is a trustee body that does not have an appropriate level of control. Commonly, a dominant trustee has remained too involved in the daily running of the charity once staff are in place or the chief executive has been allowed to run the charity unchecked and the trustees have become too removed”

 

Again we will need to demonstrate that both at the induction and ongoing stages, that Trustees in students’ unions really are aware of and conformable with their duties. This includes ensuring that officers are empowered effectively, have sources of advice, undertake regular development activity and that their boards are effectively “clerked”. Sabbaticals often find themselves as “accidental” trustees, not interested or engaged by the broad legal responsibilities that represents. This is less of a problem in the understanding world of British Higher Education than it would be under the optic of the commission- particularly if and when something goes wrong.

“Charity Commission staff are often approached by individuals associated with membership charities in connection with an internal dispute between different groups within the charity. The Charity Commission cannot act in the administration of a charity. It is not, therefore, part of the Charity Commission’s role to resolve disputes within charities where trustees have acted within the scope of their powers and duties, honestly and in good faith

But the Charity Commission may intervene:

  • where concerns are expressed about serious mismanagement, for example involving a failure to observe the requirements of charity law;
  • where there is clear evidence of deliberate abuse;
  • where trustees are not acting in accordance with the provisions of the governing document (many unions may find this to be a problem);
  • where the administration of the charity has broken down to such an extent that the charity is not working effectively;
  • where there is a clear danger of the name of charity being brought into disrepute; or
  • where honest errors have resulted in problems (such as decisions of inquorate meetings being acted upon) that require us to authorise actions necessary to remedy the situation“

 

In these scenarios, and often simply as a result of a spot evaluation, the commission can launch what is currently called a “section 8 enquiry” where they will look at all aspects of the charity and report based both on the law and its own definitions of best practice. It would then take action to rectify abuse or poor practice where possible. The results of these inquiries are published on their website and would generate extraordinarily bad press for a University- who would be far less forgiving than the days when such matters could all be kept “in house”

We will continue to consult with the Charity Commissioners on these matters, but in the meantime NUS is working on ensuring that both nationally and locally we are able to demonstrate that such differences from the norm do not represent a bar to “Good Governance”. This will require model codes of practice and guidance that we will be working with the commission on in due course. But it also means that you should consider making changes both to your structures and your culture to ensure you can demonstrate Good Governance, without watering down Students’ Unions’ historical commitment to democracy and mutualism.

It will also require demonstrating that effective training and induction, and ongoing evaluation of a board’s effectiveness is in place. NUS is currently reviewing its training for Union Trustees, with a view to:

  • Developing an approved and agreed standard/qualification with the NCVO for Union Trustees
  • Reducing its length and mode of delivery to allow more officers to attend

It may well require that structurally there is a body in place that considers all the issues that a “board” under the commissioners guidelines. Some unions have discreet resources or staffing committees designed to do this; others simply have “an exec”, whose remit in the end may be too wide to do the job justice.

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