Various sector bodies have echoed concerns, which were highlighted by the National Audit Office in its follow-up report on the Charity Commission, about the risk that the board’s “continuing close involvement in executive matters could become the norm”.
Elizabeth Chamberlain, policy manager at the National Council for Voluntary Organisations (NCVO), wrote in a blog that the report rightly points out the dangers of the board’s involvement in executive matters continuing for longer than necessary. She said that “if the board continues to be too involved in the day-to-day activities of the Commission, the independence of executive versus non-executive functions is seriously at risk”.
Chamberlain went on to say that this underscores concerns over the board’s governance structure, which NCVO launched a review of this year.
Sir Stuart Etherington (pictured), chief executive of NCVO, added: “We are particularly keen to see the Commission return to a more conventional division between governance and executive. We look forward to seeing the results of the governance audit being carried out in the coming months.”
Caron Bradshaw, chief executive of the Charity Finance Group (CFG), also referenced these concerns, and said that it is important that the Commission moves on from this “transition phase” to allow independence to remain.
She said: “Charities need an effective regulator, so the NAO’s report that the Charity Commission is making progress towards this is welcome. However, the report has also highlighted the need for the Commission to better evaluate the relative benefits of its work and this must also include the support and guidance it provides to charities.
“These are crucial for improving governance and helping trustees identify and mitigate risks. It is also important that as the Commission moves through this transition phase that the board follows the NAO’s recommendation to review its executive involvement so that its independence is maintained.”
'Lack of charity experience on board'
Joe Saxton, driver of ideas at nfpSynergy, raised concerns over the composition of the Charity Commission’s board. He suggested that it seems to “lack anybody with substantial charity experience”, adding that “some seem to have none at all”. He said that they should all be out “being ambassadors for the Commission with the sector and amongst the public".
Saxton said that it is good to see that the “operational side of the Commission is improving”, but that in terms of “building the confidence of either the public or the sector there is much still to do”.
The Association of Chief Executives of Voluntary Organisations (Acevo) said it was encouraged to see the NAO welcome the Charity Commission’s new change programme.
Asheem Singh, director of public policy at Acevo, said that although the NAO is clear that the Commission must work with charities to consult on and explain its new regulatory approach, this “cannot be a mere PR exercise”.
He added: “The Commission’s priorities, its fundamental role as the regulator and champion of the sector, and its vision of how the overall burden of regulation affects the third sector’s work must all be on the table.”
“The work of the Low Commission into the future of charity regulation, set up by Acevo, is already making clear that the role of the charity regulator is in flux. That is why the Commission must be absolutely clear that it is on a process of change that will take some time. This is but one staging point.”
The Directory of Social Change criticised the NAO report for compounding the “original flaws of its predecessor”.
Jay Kennedy, head of policy at DSC, said: “You simply can’t make a sound judgment on the regulatory effectiveness of the Charity Commission without fully considering the Commission’s core responsibilities of providing advice and guidance to charities and information via the public register.”
Kennedy also referred to the reports use of the word “robust”, and said that there was no “clear explanation of what this means”. He said that the DSC assumes this to “mean an emphasis on the Commission as a ‘policeman’ and little consideration of its crucial role as a provider of regulatory advice, information and support".
Kennedy went on to say: “It is impossible to effectively regulate such a vast and diverse sector without these functions. It is of course vital to address wrongdoing in charities but the vast majority of trustees need the Commission to enable them to get things right in the first place.
“We continue to believe that prevention is better than cure and that the focus should be on preventing charities getting it wrong in the first place. The government, the Commission and its board need to reconsider their priorities and the reassess the importance of enabling good self-regulation.”
Transparency
NCVO’s Chamberlain is also concerned about the transparency of the Commission. She noted that new websites and documents produced by the Commission in the last six months - including a new risk model with key regulatory risks, against which charities are being assessed - have not been announced or published.
She said that this “raises serious questions about the Commission’s transparency, something that many in the sector already feel has been thrown in the bonfire of priorities”.
Etherington added: “Given the need for the Commission to secure the confidence of the sector, it is very important that it quickly moves to publish regular, comprehensive indicators of its operational performance in all areas. This information is absent at the moment and will be a key way for the sector to see the Commission’s progress towards being the strong regulator we need.”
