In our work with small and medium sized charities we often run across issues that arise from misunderstandings about the difference between governance and management. This can be a particular issue in small charities as they grow, particularly when some Trustees retain operational volunteer roles as well as being Trustees. In extreme cases these can result in outright conflict between the staff/voluneers and Trustees.

In our view, and that of most writers on this thorny subject, governance is broadly about strategy. and management is broadly about operations. Of course there isn’t a sharp distinction between the two because good operational planning relies on sound strategy and the development of strategic direction depends on the results of, and inputs from, good management. We have found that our clients often find it helpful to think of the distinction as:

There are many aspects to ensuring an organisation is run well, such as: setting long term strategic direction; establishing the right policy/procedural framework for effective and safe operations; and holding staff and volunteers to account for operations.

This latter point, accountability, can be a particular source of tension where one or more Trustees have operational volunteer roles as well as being a Trustee. For example, a Trustee Treasurer may do the book-keeping as well as having strategic oversight of the charity’s finances or a Trustee may also help out from time to time with cooking or serving meals in a community centre or driving a van for a food-bank. When they are undertaking such operational volunteer roles the individual should be supervised by (and therefore accountable to) one or more member of staff or another volunteer. However, that same supervising member of staff or volunteer is also accountable to the Board Trustees. Does everyone involved understand and accept these “accountability reversals”.? If not it is easy to see how tensions can arise.

In more detailed, practical terms the distinction between governance and management can be characterised as follows:

Governance matters:

Strategy

• Approval of policy.

• Approval and monitoring of delivery against plans and strategic priorities.

• Approval of participation in government programmes, major collaborations or other significant undertakings.

Finance

• Approval of policies.

• Approval of annual budget.

• Approval of changes to the budget or expenditure beyond delegated authorities.

• Approval of financial controls.

• Approval of management accounts.

• Approval of statutory accounts and reserves policy.

• Approval of bank accounts including bank signatories and permissions for electronic banking.

Human Resources

• Approval of policies.

• Approval of terms and conditions.

• Approval of job description of most senior staff.

• Appointment of the most senior staff.

• Conducting appeals under grievance and disciplinary procedures.

• Performance review of most senior member of staff.

Management matters:

Services, policy and external relations

• Operational management & project development within policy

• Entering into joint agreements within policy and budgets.

• Policy development (sometimes collaborating with a Trustee sub-group).

Finance

• Approval of grant applications in line with strategic priorities.

• Acceptance of grant offers in line with the strategic priorities.

• Approval of leases/contracts within budget.

• Approval of approved core budget expenditure.

• Approval of direct debits and standing orders.

• Approval of bank transfers.

• Maintaining financial records.

Human resources

• All other recruitment and appointments.

• Management of all other staff.

• Approval of changes to pay and conditions within budget.

• Production of job descriptions and amendment of job descriptions including reporting arrangements.

• Approval of training priorities.

• Operation of discipline and grievance procedures including staff suspension or dismissal.

In the end, if unhealthy tension or conflict are to be avoided, it is important for Trustees and staff/volunteers to have a shared understanding of where the boundaries lie (albeit they are boundaries with fuzzy edges). Communication and learning are critical to successful relationships.

To find out more about the governance support and training we offer, please contact us at julian@almondtreeconsulting.co.uk to arrange free initial telephone discussion.