Charities and reputation management

Risk management

A charity’s reputation is one of its most significant assets, underpinning its ability to operate effectively, secure future funding and maintain the trust of those it serves. How can governance professionals help charities protect their reputations?

Governance professionals are often described as 'the conscience of the business', working to ensure that an organisation complies with legal and regulatory requirements. For many, the role includes helping boards to understand where a proposed course of action may be legal and yet lay the organisation open to potentially damaging criticism. This aspect of the role is particularly important in a world where news stories spread fast and social media can result in stories generating a life of their own. In some cases, an isolated allegation of a specific failing on the part of a charity becomes a focus for wider societal debates, with the validity of the original complaint appearing almost irrelevant to many of those commenting.

The impact that that media attention can have on even well-established charities with extensive resources has been highlighted in recent months by continuing controversies regarding the Captain Tom Foundation and the charities related to the Prince of Wales. Each has now been the subject of repeated press articles, social media attention and podcasts.

Similar issues could be faced by any charity: a low-profile grant-making foundation may face allegations of discrimination in allocating grants, small volunteer run clubs encounter toxic personality clashes, faith bodies encounter internal disputes with surprising regularity and larger operational charities face safeguarding issues, user complaints, employee grievances, fraud or internal disputes. All of these pose reputational risks which should be managed carefully.

As well as highlighting areas of reputational risk, governance professionals can help charity trustees by:

  • ensuring reputational risks are appropriately reflected in the charity’s risk register
  • highlighting the need for an appropriate scheme of delegation to ensure that reputationally sensitive issues are identified quickly and reported internally so they can be managed at the right level and with a proportionate level of professional support
  • ensuring there are robust policies for high-risk areas including conflicts of interest, trustee benefits and expenses, safeguarding and internal financial controls
  • supporting organisational understanding of obligations of confidentiality and data protection which may restrict the charity’s ability to provide information on any incident and can create considerable frustration
  • planning for effective communication with stakeholders if an incident occurs
  • identifying specialist professionals including public relations and legal advisers to provide support with reputationally sensitive issues
  • prompting early consideration of whether a serious incident report to the Charity Commission or a report to any other regulator should be made
  • considering more detailed planning for potential incidents, including understanding  insurance arrangements and identifying other sources of professional support
  • emphasising the importance of good governance in reducing the risk of reputational damage and helping the board to manage incidents where they arise.

Further information

For more on the legal options where an incident arises, see Ben Holt and Rhiannon Lewis’ article Upholding your good name

To discuss the governance issues highlighted in this piece, please contact Shivaji Shiva, Charities Partner at VWV solicitors on 07788 313298 or at sshiva@vwv.co.uk

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