Context

The sixth Trustees’ Week came to an end last week Friday. Despite a large number of successful events, the week revealed a disconcerting disparity between charities’ expectations and trustees’ actions. In particular, since the downfall of Kids Company, trustees and their statutory duty to protect their charity’s assets has been subject to public scrutiny. In a recent ThirdSector article, for example, a commentator alleges that Kids Company trustees “found it tough, or unnecessary, to challenge the charismatic founder and chief executive, Camila Batmanghelidjh.” In this context, it is hardly surprising that trustee recruitment has become increasingly challenging. Research shows that almost half of the 180,000 Charity Commission registered charities have at least one vacancy on their board.

Key challenges

At Aleron, we believe that trustees play a crucial role for a charity. They bring external skills and expertise, and are key for organisational development. During the process of long term planning and strategy development, for example, trustees often contribute significantly and support the charity in defining its long term vision and objectives. However, we have found that engagement declines sharply once the strategy has been defined. Many of our clients and their trustees have reported a similar challenges that arise throughout strategy implementation. On the one hand, senior management feel that trustees get overly involved and misinterpret their advisory and controlling function as being managerial. On the other hand, trustees legitimately complain about being left either uninformed or overloaded, with too many and too detailed reports. This mismatch of expectations has one root cause: information asymmetry.

Trustees’ responsibilities

“The Essential Trustee” guide – Charity Commission, July 2015

1.    Ensure your charity is carrying out its purposes for the public benefit

2.    Comply with your charity’s governing document and the law

3.    Act in your charity’s best interests

4.    Manage your charity’s resources responsibly

5.    Act with reasonable care and skill

6.    Ensure your charity is accountable

To fulfil their duties as defined by the Charity Commission (see box), trustees need to access and use information about the organisation’s strategic direction and performance against specific objectives. However, this information is often buried in lengthy reports with various charts and statistics that fail to illustrate achievements within the bigger picture of strategic objectives.

Case Study

In response to these challenges, Aleron supported a charity throughout the process of defining and developing an integrated dashboard which analyses the organisation’s performance against strategic objectives for trustees, and can be used for both trustees and managers.

To develop this tool, we worked closely with senior management and trustees, aiming to get a clear understanding about information needs and mutual expectations. We started by analysing the charity’s strategic objectives and developing clear objectives across four specific high level targets. This process of investigating in detail the needs of trustees is crucial in order to identify reporting gaps and current duplications.

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FIGURE TITLE: A detailed strategy breakdown is crucial for the development of an integrated performance dashboard

This granular breakdown of strategic objectives helped the charity to define reporting structures. Key performance indicators were developed for all four quadrants, and linked to the necessary operational reports (see below). This integration of reports into the strategy makes it easy for trustees to access those reports which are necessary to track the progress against strategic objectives, and support the charity throughout the implementation process.

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To allow for a more detailed drill down into details, i.e. for reports to sub-committees, the dashboard is linked to management information. As shown below, detailed analyses with clear data visualisation can be extracted and use separately. For more information about the benefits of data visualisation, please see http://www.aleron.org/2015/10/data-visualisation-empowering-your-staff/

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The feedback from trustees and senior management was overly positive. Embedding reports into the broader context of strategic and impact objectives and linking them directly to operational and management information has significantly improved the effectiveness of board meetings as well as the overall relationship between senior management and trustees.

Looking forward

Being a trustee should be an enjoyable and rewarding activity; it should allow the trustee to stand up for a mission he/she supports and to help an organisation improve its performance. To achieve this mutually beneficial relationship, it is the responsibility of senior management to ensure that a strategy is translated into a strategy map with clear KPIs and a clearly defined reporting frequency. Engaging trustees in the process of developing this integrated performance dashboard is essential to ensure that information requirements are fully met. Only then can trustees fulfil their requirements and support the charity in managing its resources in the most responsible and impactful way.