Governance is very much related to structure [see Legal Structures], but as a social enterprise there are some key common good practice principles which will be relevant to all.

Firstly we must understand terminology and who is responsible for good governance. Dependent upon your legal structure you will have either:

  • Directors
  • Trustees
  • Management Committee

These are just titles and when we use any of these terms we mean the same group of people. That is the Board who is responsible for the strategic management of the organisation and good stewardship.

The Board should not concern itself with operational matters, but should ensure the process and procedures for effective and lawful operation are in place. This would include for example:

  • Understanding the organisation’s aims, mission and purpose
  • Agreeing appropriate financial procedures
  • Ensuring employment law [and indeed other law] is adhered to
  • Monitoring performance against contracts and enabling continuous improvement
  • Managing risk
  • Monitoring finances
  • Ensuring assets are used appropriately
  • Planning for the future
  • Ensuring appropriate reporting to regulatory bodies for example, Companies House; CIC regulator; Charity Commission; HMRC, and relevant stakeholders for example funders and members
  • Succession planning and future proofing

This list is not meant to be exhaustive see good governance for further information.

The National Council for Voluntary Organisations [NCVO] has an extensive range of information and resources to guide new and established trustees. Many of these guides are available to download free, but some will cost and are available in paperback too, click here.

From 2005 to 2008 a central government funded programme of infrastructure support called ‘Change Up’ worked on key themes including good governance. This work produced a significant amount of guidance including the Code of Good Governance and the National Occupational Standards available from Skills Third Sector. These guides are still very useful tools to help get your governance right.

The Charity Commission is a very useful source of good quality guidance, even if you are not running a charity the guidance is relevant and will ensure you consider a range of important issues as you guide your community/ social enterprise.