The beginning of June saw the SCVO Board meet to discuss how they demonstrate and evidence the Scottish Governance Code for the Third Sector principle of Board Behaviour, and I’m pleased to say that nobody ended up on the naughty step.
The principle states that ‘A well-run board, both collectively and individually, embraces and demonstrates mutual respect, integrity, openness and accountability.’ The SCVO board, like most, does demonstrate these behaviours, individually and collectively, after all it’s made up of people who commit their time to support good causes and solve problems. But trustees are generally passionate people, who feel strongly about certain issues, and sometimes this can lead to misunderstandings and fractured relationships. Board disputes can harm how an organisation functions and become a problem for everyone if they are not dealt with. A serious board disagreement has the potential to lead to a loss of trustees, members, staff and income, and can damage an organisation’s reputation, often irrevocably. So what can help you avoid that?
Here are four key areas to look at to help you avoid tussles and tantrums, and ensure your trustees can identify any problems and deal with them before they become too difficult to solve.
Code of Conduct
The Governance Code states that ‘creating a constructive board environment where diverse, and at times conflicting views are respected and welcomed, and decisions are reached collectively’ is one way to demonstrate good board behaviour. The last year has shown us all the challenges, and the benefits, of meeting virtually rather than face to face. Particularly if your trustee team is not long established, or you have had to integrate new trustees, then you’ll have to work extra hard to establish a culture of trust. This is where a Code of Conduct can be vital to set out clear expectations and standards and highlight the importance of collective decision making. Your trustees won’t always agree in meetings, but there should not be a fear of conflict on your board. In any relationship there should be healthy debate, because diverse and conflicting opinions can inform good decision making. Commitment to a Code of Conduct can enable boards to identify and address issues, and help start a conversation with a trustee that’s disengaged, too dominant, or downright difficult.
Another vital tool to help your trustees reach good collective decisions in an effective board environment is a well-crafted board report. This can help keep trustees engaged and enable them to focus on critical thinking and strategic decision making. There are three key features here, a good board report should be:
- Timely – make sure your board reports are sent out with enough time for your trustees to read so they can make informed comments at meetings
- Concise and factual – trustees are busy people, remember they’re giving their time for free, so please, no jargon or acronyms, and get to the point!
- Clear about the decisions needed – show, with icons or colour coding, what is for information only; what’s for discussion; and what is for decision making
Conflict of Interest
The Governance Code states that ‘recognising and acknowledging where conflicts of interest may arise’ is a way of demonstrating that the board understands its ‘behaviour can have a far-reaching impact and is fundamental to our organisation’s reputation and success’. It’s important not to panic if your board is faced with a conflict of interest, because it’s not about trying to prevent it, it’s how you manage it that matters. Your board should discuss, agree, and record what it regards as a conflict of interest and a conflict of loyalty, both real and perceived. This written policy should include clear instructions on whether the trustee affected should withdraw from discussions about the issue and not have a vote. A regularly updated register of interests is equally important, as is a declaration of interests as a standing item on your agenda. A written record should be kept of any conflict issue, with how you dealt with it recorded in your minutes to demonstrate transparency and openness.
A well-run organisation should have a transparent and timely process for making and handling complaints constructively and impartially. Trustees should receive regular reports on positive and negative feedback and complaints and see them as an opportunity to learn and improve. If you make it a regular agenda item then you will have a framework for questioning from the board and help your organisation build trust with service users and beneficiaries, as well as wider stakeholders. Bad behaviour on a board can be easier to spot than good. But these are some of the tools you can use to evidence and demonstrate that you have a constructive, enabling and supportive board environment