How to ensure your board is financially competent

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It is obvious to assume that more charities should have a formal process to ensure their trustee board has high financial competency – but first it is essential to confirm this need.How To Guide - How to ensure your board is financially competent

In a survey undertaken by the Charity Finance Group and MHA in 2018 this was a clear result. 85% of charities considered it would be beneficial for their trustees to have a better understanding of strategic financial governance matters. In addition, 92% considered it was important to have more than one person on the trustee board to be engaged with the charity’s finances.

Academic research undertaken by NCVO, Cranfield Trust and others supports these findings. In November 2017 the results were published of this major research study entitled, Taken on Trust. The detailed research was undertaken with the encouragement of the Charity Commission.

The report notes:

Our findings suggest that there might be something of a gap between a trustee’s perception of and actual knowledge of their legal duties”.

A key recommendation was:

“that more work be done to encourage trustee boards to actively embrace the introduction of different people, new ideas, skills and experience to trustee boards…”.

This first ‘How To’ guide from our Not for Profit sector experts looks at the factors involved in trustee competency and gives practical guidance on how to diagnose competency, secure commitment from trustees, as well as establishing the right skill sets on your board.

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If you have any questions about the topics raised in this Guide or would like to discuss your accounting and business advisory needs with one of our sector specialists, please contact Sudhir Singh, Partner and Head of Not for Profit directly, or send us an online enquiry.

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Guide_ How to ensure your board is financially competent v2.pdf

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