25 February 2016 by Alexandra Jones
The trustees failed in their statutory duty
Six months have passed since the sudden and very public closure of the charity Kids Company. In this time, commentators have opined many reasons for why it failed, and will undoubtedly continue to do so as its leader, Camila Batmanghelidjh, a flamboyant media magnet, rarely fails to make headlines.
Heresay and opinions of the charity’s leader aside, we are now much closer to knowing what went wrong and crucially how similar organisations can avoid making the same mistakes. The publication of the Public Administration and Constitutional Affairs Committee report sheds some interesting light on the failures, in particular a lack of proper trustee oversight.
The report summarises: ‘Primary responsibility for Kids Company’s collapse rests with the charity’s Trustees who failed in their statutory duty to protect the interests of the charity and its beneficiaries in the long-term.’
The need for boards to carry out this duty effectively and provide a good enough check on leaders is true in all sectors and is echoed by John McFarlane in our interview, 'Against the tide', who believes it is the board’s job to be sceptical.
We proposed a way to attract better quality trustees in this month’s Quick Question survey, asking if charity trustees, who are usually volunteers, should be paid for the contribution they make. Pay would, in theory, reward good work and perhaps bring a better calibre of individuals. The majority agreed that this would go some way to help.
It is very easy to get caught up in what went wrong and forget that the real losers here are some of the most vulnerable people in society. Trustees have a responsibility not only to the company but vitally to the people that charity is seeking to support – perhaps a more important role than their corporate counterparts. Two of our columnists this month, Bernadette Barber ('Welcome pressure') and Simon Osborne ('A noble mission'), explore these issues in further detail.