Skip to main content
An image of Sue Woodward AM

In this month's column, I want to talk about an important part of our work that often goes unnoticed – compliance reviews.

Each year, we conduct reviews focusing on charities that may be at risk of failing to meet their obligations. This proactive approach helps us to collaborate with some of these charities and work with them on emerging issues to prevent problems. By sharing the outcomes of these reviews publicly, we can let all of those involved in running charities know more about these risks and help people with their charity’s governance. Our work is aimed at fostering a robust charity sector founded on principles of transparency and accountability, knowing that the vast majority of people want to do the right thing and are always looking for new tips.

We have recently published the findings of our review of charities where founders maintain key roles beyond their charities' initial stages. While founders often bring passion and drive to their charities, an imbalance of power and influence within the governance structure can pose risks. This imbalance, often stemming from excessive trust placed in one individual, can erode a charity's culture, hinder its operational effectiveness, and jeopardise its sustainability.

Through our compliance reviews, we identified common governance concerns in some charities where founders maintained key roles related to financial management, managing conflicts of interest, independent oversight and alignment of operational decisions with the charitable purpose. Our reviews found that these issues were more prevalent among smaller charities that are overly reliant on their founders for day-to-day operations, highlighting the importance of robust governance frameworks.

It's heartening to see that many charities are proactively addressing these challenges. By diversifying their boards and implementing robust policies and procedures, they're fostering effective governance practices essential for long-term success.

To be clear, our findings do not diminish the invaluable contributions of founders and leaders, particularly during a charity's establishment phase. Nonetheless, being mindful of governance risks is key to ensuring sustained impact and support for those your charity serves.

I’d encourage you to read the findings of the reviews and consider the steps we suggest to mitigate common governance risks, as many of these are practices that can be applied across all charities.

Finally, thank you to the many charities that have completed their 2023 Annual Information Statement. We are pleased that there has been a noticeable increase in the on-time submission rates which of course means those charities have earned their charity 'tick'!

Warm regards,

Sue Woodward AM