York Museums Trust is an independent charity that manages four sites

Trustees given timely reminder

Patrick Steel, Issue 116/03, p9, 01.03.2016
Beefing up the Charity Commission, in the wake of Kids Company’s failure, will reinforce trustees’ responsibilities
With the passing of the Charities (Protection and Social Investment) bill, due as Museums Journal was going to press, the Charity Commission, which governs charities based in England and Wales, is being given more clout. It is “a sign that the world is changing”, says Adrian Babbidge at museum consultancy Egeria, and that the commission is becoming more interventionist.

But the commission was already flexing what muscle it had prior to the legislation changing, when it published its inquiry into the East Anglia Transport Museum Society in January. The inquiry found the museum had failed to file its annual documents for more than two years, and criticised the trustees for “mismanagement and misconduct in the administration of the charity”.

This new-found robustness follows the high-profile collapse of the charity Kids Company last year. An inquiry by the Public Administration and Constitutional Affairs Committee, published last month, found among other things that the Kids Company board lacked the experience needed to interrogate the decisions of the chief executive, and that it was operating on low reserves, often in deficit.

Kids Company has been talked about at board meetings, says Tony Butler, the director of Derby Museums, as a reminder of the responsibilities trustees have. The board needs to understand the charity’s objectives, he says, and the chair should have critical oversight of the chief executive, with each role clearly delineated.

Michael Turnpenny, the museum development manager for Yorkshire at York Museums Trust, says that doesn’t necessarily mean the boards of museum trusts should be filled with museum professionals. But a museum board does need people who understand the organisation sufficiently to make the appropriate decisions.

Trustees also need to think broadly and strategically about risk management and succession planning, says Tamalie Newbury, the executive director of the Association of Independent Museums. She adds that risks should be considered with a five- to 10-year horizon to give time to manage challenges, while succession planning should be an ongoing job, ensuring the board includes a mix of genders, ages, backgrounds and skills.

James Maloney, a senior associate at law firm Farrer & Co, says trusts need to be mindful of responsibilities, as there is a danger that the Charity Commission’s new powers to issue warnings could lead to small misdemeanours having consequences for a charity’s reputation, particularly as there is no right of appeal.

It remains to be seen how the commission will apply its powers to disqualify trustees where it finds “misconduct or mismanagement”. Maloney’s advice to trustees is to “keep an eye on the landscape”, as the commission completed a consultation on fundraising last month, and the revisions will come in this year.

But Butler thinks the changes are a good thing: they are likely to focus trustees’ responsibilities, and give charities more flexibility in their investments.