CTN response to the discussion paper on the Charity Commission’s Risk and Proportionality Framework

Submitted 6 November 2007 

Charity Trustee Networks is a registered charity, which aims to support trustees from across the voluntary and community sector in order to improve the governance and therefore the effectiveness of their organisations.

Charity Trustee Networks is an organisation which is continuously developing its reach to trustees through its face to face and online networks for trustees. In considering the discussion paper we are aware that, across the body of trustees, there will be differing opinions on risk and proportionality.  We seek in this response to highlight the trustee perspective generally and the practical implications of the proposals on a trustee and a board in the delivery of their responsibilities.

Charity Trustee Networks welcomes the Commission’s decision to refine and clarify its approach to risk and proportionality within its compliance work.

CTN agrees generally with the most serious issues and areas of greatest risk for charities which have been identified. However, we feel there is greater clarity required over what the Charity Commission views to be an issue that could damage the reputation of individual charities, the wider charity sector, damage public trust and confidence in charities or seriously call into question the independence of charities. The

Commission will be aware that it is not uncommon for trustee boards to disagree among themselves about what is in the best interests of the charity, and by extension, what might damage the reputation or independence of their charity.

While internally the Commission may feel it knows what risk to reputation or independence is considered serious, a trustee looking to raise a concern over their perceived risk to their charity’s reputation or independence may be frustrated if their understanding of the severity of risk required to involve the Commission does not correspond to that of the Commission. Alternatively, trustees may worry unduly that the Commission may consider a reputational or independence issue to be high risk, when it does not. Trustees already worry a great deal about their role and we would ask the Commission to do its best to avoid adding to those worries.

This issue arises again in the examples of modifying factors. Likewise, ‘curtailment or withdrawal of services’ is unclear. Across the country charities curtail or withdraw services on a daily basis; sometimes planned, often unplanned, for example, as a result of the withdrawal of a contract. The curtailment or withdrawal of a service could in itself be considered a risk to the reputation of a charity, and we would ask the Commission to make clear when drafting guidance that these factors will only engage the Commission’s regulatory interest if they are combined with other risk factors or modifiers.

The ‘zero tolerance’ issues are proportionately serious and we agree with the list.

Following on from this discussion paper, CTN would be happy to ‘trustee proof’ the draft revision of The Charity Commission and Regulation, and seek the views of trustees on the draft before it is finalised (by ‘trustee proofing’ we mean going through it from the perspective of trustees to highlight areas that may be unclear or cause concern to trustees).