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Governance Code should steer clear of self-regulation, warns Buse

Governance | Tania Mason | 5 Aug 2008

Rodney Buse (pictured), author of the report that paved the way for the establishment of the Fundraising Standards Board, has come out firmly against any form of sector self-regulation for the Code of Good Governance.

Self-regulation is one option outlined in a review of the Code published last month by the Governance Hub.

The review was launched to assess the success of the Code after it had been in place for more than two years, and to recommend how it might develop in future.

The Hub commissioned nfpSynergy to conduct the review, and their conclusions are based on responses from 568 charity employees or trustees.

The Code was launched in 2005 after being developed by a group of sector bodies led by acevo, NCVO, Charity Trustee Networks, and the Institute of Chartered Secretaries and Administrators. It aimed to help charities improve their governance.

Standard or framework?

In the review report, the authors claimed: “There is debate about whether the Code sets out a standard for governance or merely a framework to which organisations can aspire. The paradox appears to be that while the Code sets out a framework for governance to which organisations are asked to be able to ‘comply or explain’, where this journey of compliance will end up is not clear.”

They went on: “The Code does not have a validated self-assessment standard – if indeed that is the right route for it to go down. There is no easy method of self-assessment and there is no independent accreditation or policing body. Indeed there are mixed messages about how far the sector wants the Code to go down this route – with little enthusiasm for a process akin to the Fundraising Standards Board.”

The report recommends developing “easier and more robust mechanisms for board/organisation self-assessment. These mechanisms could include both a self-assessment process and an independent accreditation process for compliance with the Code.”

Independent policing and monitoring body

It outlines five options for future assessment of Code compliance, ranging from the existing self-box-ticking system to external validation and an independent policing and monitoring body.

This would operate in a way “akin to the way the Institute of Fundraising sets the standards for fundraising practice and the Fundraising Standards Board monitors compliance of its members with those standards through its complaints process”.

The writers acknowledged that this option was the “most expensive and complicated, but also the one most likely to provide reassurance to external stakeholders about the quality of sector governance”.

The authors said it was not their job to decide which is the right option, but the task of the Code’s future stewards, recently announced as the founding group that developed the Code, along with the Charity Commission. But they point out that “if the Code’s objectives continue to be about public trust and confidence then the compliance infrastructure will need to be more visible and more rigorous. If the objectives of the Code are more about being a governance resource, than a universal sector standard, then simpler compliance mechanisms will suffice.”

Flexibility ‘most important’

But Rodney Buse (pictured), who chaired the commission that prepared the report proposing the framework for today’s Fundraising Standards Board (FRSB), warned against going down the road of self-regulation. Buse is also chair of Charity Trustee Networks, but stressed his comments were made in a personal capacity, as he had not yet consulted his members.

“We should be very cautious of enshrining the detailed guidance into any self-imposed form of self-regulation,” he told Charity News Alert. “It risks a box-ticking approach, but more importantly the sector will benefit from the flexibility of applying the principles which will take account of the many and varied forms of not-for-profit organisations allowing guidance to develop to sit in specific settings.”

nfpSynergy’s Joe Saxton said he was in favour of any system that could help the sector demonstrate its adherence to high standards, but admitted the term ‘self-regulation’ was probably not appropriate in this instance.

He said that any form of validated self-assessment should be based more on an Investors in People type of kitemark rather than an FRSB-style model.

The founding group will now consider the options and recommendations outlined in the review.

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