Third Sector Governance

Author: David Link

  • Too many TSOs

    Time for some new thinking?

    People who know me know I say that, in my 35 + years working and advising in our Third Sector, no organisation has ever said “Don’t refer any more potential (trustees/committee members/directors) to us!”

    Maybe that’s because my territory is rural Scotland. In particular, the LA area I live in has a (shrinking and aging) population of about 150,000. A fifth of those live in the County Town., which is approximately half way between its 150 miles East/West borders. Yet this area supports nearly 1500 TSOs. Each of which has a “Board”, which has a required minimum number of Board members. Maybe its because of this. But this area is typical of both Scotland and the UK in its reliance on TSOs, and the reliance of those TSOs on a supply of willing, skilled and knowledgeable replacement board members.

    Just a reminder that when I mention “Boards” and “Board members” I include Committees, Directors, Charity Trustees, trustees and committee memners.

    The demographics partly explain why the majority Boards are populated by older people. Partly, but not completely, because we’re not great at attracting younger people on to our Boards.

    Regardless of the reasons. Our Sector has a people problem. And that leads me to conclude we either have too few people, or too many TSOs.

    One of the main problems, in my view, is that establishing a new TSO is too easy. I’ve lobbied the regulators and lawmakers in Scotland to include a requirement in any application to set up a regulated organisation to identify and list any organisations that currently deliver the change the new organisation seeks to. And I’ve received some encouragement.

    Our sector is not about competing to deliver activities to similar beneficiary groups (often called communities – have a look at my post about communities). It’s about finding the best way to deliver the change the beneficiaries need.

    We also need to seriously consider mergers.

    One small town – it would be called a village at best in another area – with a population of ~ 200, has a Community Council (that word “community” again) and at least 6 TSOs that I know of, delivering various activities for their beneficiaries – the 200 people there. 4 of them have Charitable status. Each has a board. Each has almost identical governing regulations. Yes, they deliver a variety of activities – village hall, visitor centre, community woodland, community shop and more.

    Attending their individual board meetings requires a good dose of cognitive dissonance. Because, guess what, different boards, same people. I’ve often said we need bigger hatstands in our sector.

    This is why it is of the utmost importance that we understand the difference between delivering excellent governance and delivering excellent activities.

    If we put our private sector hat on for a moment we would immediately see a “Head Office/branch” or “Holding company/trading companies” model.

    Back to our Third Sector mergers could take place in wider areas.

    And the motivation for this thinking is really quite simple. If it sustains delivery of the activities our beneficiaries need to get the change we have identified, then why wouldn’t we?

    Let me know what you think is a comment.

    My new excellent governance guide and template will be published this year. Contact me for advance details.

    A group of people sit round a table discussing excellent governance for their Third Sector organisation

  • Induction

    Why is our Sector so bad at inducting Board/Committee members?

    This is not simply an idle question. Nor is it just my experience (of being invited onto Boards/Committees and working with hundreds of TSOs). It’s been researched. For example:

    ICAEW (2023)
    * Fewer than half of charities provide new trustees with key information such as governing documents, accounts, and legal responsibilities.
    * Only 32% interview trustee candidates, and less than 1 in 10 offer mentoring or shadowing as part of induction.
    * Larger charities generally run more structured and effective recruitment and induction processes than smaller ones.

    The Charity Commission and Pro Bono Economics (2025) found that:

    • Just 6% of trustees are recruited via open advertising; over half of charities rely on personal contacts.

    Across the available evidence:

    1. UK Third Sector board induction is inconsistent and often insufficient, especially among small charities.

    2. Stronger induction correlates with better board performance, confidence, and mission alignment.

    3. Regulators and infrastructure bodies acknowledge sector-wide induction weaknesses and have recently strengthened guidance to improve practice.

    4. Most research focuses on governance, trustee recruitment, and board behaviour — but these consistently highlight induction issues.

    So why is this?

    Lack of knowledge and Fear

    ……

    It is self evident that if an organisation has never had a formal induction programme they won’t induct new members – unless something changes.

    I have often worked with organisations whose principals (its Trustees, Board members, committee members) came from – as is very common – from the Private sector. Most of these, extremely well-intentioned people in 99.999% of those I’ve met, have technical expertise but haven’t operated in a strategic decision-making environment let alone one where “collective responsibility” and equality of authority (for that read control or power) are actually mandated. I’ve frequently had it said to me “We’re fine as we are, we don’t need to change”

    There’s two reasons people resist change (given there’s two types of change – self-directed or impose). To protect power or hide weakness. And sadly lack of understanding leads to a cycle of lack of understanding.

    There’s also – despite there being no mention in Charity or Company Law of “Chair” – a tendency among board/committee members to assign extra power and authority to the Chair. Chair’s should show Leadership, but if they don’t “get it” then how can they lead in the right direction?

    How do we change this cycle?

    The governing Regulators are certainly trying. And so am I. The lack of induction in our sector is one of many reasons I have created my comprehensive guide to excellent Governance. It provides a key element of induction packs for Board members, Volunteers and staff.

    It also does a lot of other things including getting better outcomes for beneficiaries, complying with Good Governance Codes around the World, and much, much more. But that’s me promoting. Today is about Induction

    There is also a fear among Board members that’s a bit like the Emperor’s new clothes. If we actually tell prospective Board members what their duties and responsibilities are, we’ll frighten them off. Every time I’ve been asked to sit on a Board (and I never do, because change has to come from within) it’s been a conversation that goes along the following lines.

    “Hi. You’ve got lots of (skills/common sense/knowledge) and our Board is a bit short on members. We’d like to get you on-board! It’s only an hour or two once every (month/two months/three months) for about an hour or so. Oh, and if we don’t get more members our Organisation is in real jeopardy of closing”

    Is change necessary? It’s actually inevitable, and for my money a good time to start is right now. I’d much rather be helping organisations get it right now than have to have the difficult decisions I often do when I’m called in as doomsday approaches.

    Because, as with everything we do in our Sector getting it right is imperative for our beneficiaries.

    Use the contact form to – well – contact me.

  • What is “Community”

    Well. I see lots of posts about “working effectively with the community”. I was even titled “Community Engagement Officer” at stages and my foray into the Third Sector was back in the 90’s when I worked in “Community Business” – decades before we invented “social enterprise”. I was pretty sure my “Bosses” and the trustees of our Boards had some vague idea of “community” (except for the most influential [to me] of these, Robert Cairns who got this) but they never defined it.

    Geographic, Interest, and how many more?

    We pigeon-holed “communities” into categories. And not many of them. It’s super important to note “we”. Grant-funders wanted to know which of these communities beneficiaries fitted into. And they had to fit. Else no funding. Some of our “communities” were defined geographically being bounded in an area of economic deprivation.

    But nobody ever asked the people which community or communities they identified with – because people do identify with more than one community. But in the days of ERDF and ESF the definition of the “Community” was set way further away – at the nearest National Government level, but more often in Brussels. Pots of money to “invest in communities” provided they fitted the beaurocrats definitions.

    Don’t get me wrong. The organisation I worked for was funded through ERDF and ESF, our Council partners wanted to get rid of the money, so the system was effectively rigged.

    Yes, we did some very good work, and some of the “projects” we supported are still in existence. Credit Unions, for example, and others.

    But a lot faded away when the funding ended. And I am convinced it was because we never – we weren’t’ incentivised to – asked anyone what communities they identified with.

    So whatever group or organisation I help, through training advice or guidance or project delivery, I don’t just ask “and how did you establish the need and demand [for the change you deliver or want to deliver]” I also ask how they defined the community of beneficiaries they plan to deliver change to.

    People identify with a vast range of different communities. Yes, they can be geographic (but what geographic boundary, it’s unlikely to be “town” or “postcode”) or interest but can also be need, practice, any of the protected characteristics, a combination of these or anything else they say they identify with.

    As a Community Engagement Officer I was given a territory in which to operate. My attempts to break this model failed and brought me into conflict with my bosses. As a Consultant I chose my territory – Scotland. I feel a Venn diagram coming on… My broadest definition of “community” within that territory is “Third Sector” (that’s the Charity, Voluntary and Social Enterprise Sector, or “Non-profit” for readers outside the UK).

    A territory is not a community. A community is only relevant for those who define it and are part of it. If we don’t check this, the change we plan to deliver will be short-term at best.

    And that brings me to a conundrum. Because our sector, unlike the private sector, should be striving to eliminate the need and demand for the change we have identified. I don’t want to see more Food Banks – I want to see the reason we need Food Banks eliminated. That’s a topic for another post.

  • Vision, Mission, Values

    I can’t count the amount of times I’ve been asked by Third Sector Organisations (TSO’s)large and small, of all types and legal formats “Do we really need a Vision, Mission and Values statement”?

    My answer has always been the same. It’s not a question of need – TSO’s are founded on these, they’re essential.

    Vision

    I won’t do a masterclass in a blog – that’s why I consult and have produced my Guide that is available for purchase soon. Briefly, a Vision is what you will see (hear/feel) when you complete your Mission. It is the change your TSO was set up to deliver.

    Mission

    Your Mission is described in your Governing document, probably at number 3 or 4 in the Clauses. It normally starts with the word “To” and includes the change words that describe the actions your TSO needs to undertake to realise your Vision. Enshrined in Charity Law these change words are often like “relief (of), advancement (of) promotion (of)”. And so on. They are often called “purposes”.

    Learning

    When I deliver training sessions to members of the governing body of any TSO, one of the first questions I ask is “what are your (TSO’s) purposes?”. I have grown to expect more blank looks than answers over the years. This says something about how our Sector inducts people – or doesn’t. I’ll post a blog on this in the future

    Values

    Every TSO when it establishes by definition establishes a set of values. They may not be defined, but again they are baked in to the TSO’s Vision and Mission. They are often about fairness, justice, respect, and nowadays more often, love. The clever folk call these things “nominalisations” – things you can’t put in a wheelbarrow.

    Values are the glue that binds your volunteers, staff (if you have them), trustees and in most cases your beneficiaries, commissioners or customers.

    Guide and template for good Governance

    My soon to be published guide will explain how you can easily identify your Vision, Mission and Values, why they are so important (not just to your TSO internally) along with everything else you need to know or do to comply with your Governance Code. If you want an early copy, use the contact page and…… contact me.

  • Trust

    Trust is at the heart of our sector

    I never think of our essential sector without immediately seeing volunteers. Volunteers are the actual life-blood of our sector. More about volunteers in another post.

    Today’s post looks at Trust, which is the very heart of our sector, enabling our volunteers to help our beneficiaries.

    This shouldn’t be news to anyone in our sector, but it’s often overlooked. For those of you who are Trustees (Charity or other) it’s in your Title. All our Third sector organisations hold something in Trust for their beneficiaries. This can be in any form from an asset (building or land) through money to food and intellectual property and time. It can be held in a CIO, a CiC, a Company, a Trust, a Mutual, an unincorporated association or other forms. It usually comes from or through donors.

    Much Governance legislation in our sector is aimed at increasing public trust. And it is crucial that the Governance of each organisation inspires trust, and demonstrates accountability and trnasparency.

    Here’s the thing. When any Third Sector Organisation’s governance falls below the standard required, and the standard the Public expect, the Public see this as a failing of our whole sector. every Kids Company or Captain Tom Foundation or any other scandal or story erodes public trust in our sector. And we all know bad news sells better than good news.

    One of my not so many) mantras is “We’re all in the marketing department”. How we discharge our duty to govern within a legislative framework reflects not only on us, but on our sector

    I’ve been advising our sector for 35 years, and my soon to be published guide to good governance includes everything an organisation needs to comply and to demonstrate good governance to its beneficiaries, volunteers, donors, commissioners, customers, in fact all stakeholders.

  • Third Sector Governance

    Whatever your position in an Third Sector Organisation you can find help and support here.

    But there is a condition…. I’m an expert in Governance. If you have a question about any of the activities you deliver or have to carry out to deliver your activities I can’t help. Not because I necessarily don’t know, but because I am neither competent to nor qualified to advise on matters ranging from Employment Law to Health and Safety in the Workplace.

    So what is Governance?

    In the Third Sector, our Essential Sector, Governance is

    “Making decisions (within a framework) that will get the best outcomes for our Beneficiaries“.

    This is fundamentally different from the Private Sector (where many of the members of the Organisation’s Governing Body – Board of Trustees, Committee, Directors, etc. – come from) where the purpose of Governance is “Making decisions that will improve profit for the (owners/proprietors etc.)“

    The framework consists of two parts:

    Governance regulations – Relevant Law depending on your structure, and your Governing Document, and

    Activity regulations. These include, but are not exclusive to, HMRC, VAT, Employment, HASAWA, Food Hygiene, Building Regulations, Safeguarding and so on. It is of the utmost importance that your decision makers know which regulatory frameworks they need to make decisions within.

    It is a significant concern to Regulators (Charity regulators, Companies Regulator, Fundraising Regulator, HMRC, ICO and so on)that decision makers in our Sector often do not know this.

    I’ve spent 30+ years as an Advisor, Consultant, Practitioner and Decision-Maker in our Third Sector. I have worked with hundreds of Organisations, helping them deliver better Governance and comply with their relevant codes.

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