On the 16th January the Harrow Observer reported a ‘crooked Treasurer’ stole £50k from the Holy Innocents Church in Kingsbury.
The question is why was this Treasurer able to commit this crime?
Was it because far too much trust was placed on one individual too soon who then abused the trust?
It is good practice to encourage new board members to the board. This not only refreshes the board and the organisation, it brings new ideas and perspectives, but also existing board members are likely to be more vigilant with new members. A trustee board that is closed and over familiar with one another can breed complacency as well as discourage new members to join. It can also make it difficult for the questions that should be asked to be asked, and challenge practice.
We know this type of abuse is not uncommon. The Charity Commission reported between 1 April 2012 and 31 March 2013 of the 1232 compliance cases they undertook the majority involved concerns about governance (including problems with trustees’ roles and responsibilities) concerns about financial or funding issues (including problems with fraud or misapplied funds, or concerns about accounting). 1
One person’s wrong doing can impact the whole organisation as well as the other trustees who are not directly involved in committing the crime, as they become liable due to the collective responsibility of trustees.
Just because trustees are volunteering their time and doing good for the community it doesn’t mean that they can’t or shouldn’t be questioned. After all they are entrusted with other people’s money (public money) and so they should be held to account about how this money is spent. A charity recruiting a paid member of staff would expect to interview prospective candidates and take up references and properly induct and train the staff member. Isn’t it about time we approached trusteeship in the same way?
What can we do to protect our charities from this type of abuse?
Here’s a few tips:
- It is good practice to have limits on the number of terms a Trustee can serve for the purposes of renewal and revitalisation.
- Getting trustees to sign up to a Trustee Code of Conduct that has transparency and openness at its core and encourages Trustees to be inquisitive is one measure that Trustee boards can take.
- Introduce Trustee Recruitment procedures
- Introduce an induction programme for Trustees
- Ensure existing and new Trustees receive training
- Encourage board review annually
- Ensuring strong leadership at board level, with clear lines of responsibility and reporting.
- Making certain that there is a chair at the helm who is willing to hold people to task and make unpopular decisions for the benefit of the charities beneficiaries
- A culture where questions are asked and practices challenged
- A commitment to improvement of the organisation
Having such procedures in place is not completely fool proof, as with anything people who have bad intentions will always find a way. What it does do is send a very clear message that ‘we like to do things properly here’, and would potentially put someone off who has any thoughts of doing something such as this.
What do you think? What have you done in your charity to safeguard against abuse of trust by trustees? Let us know by commenting below or emailing me your thoughts.