Why is it important for businesses to look at governance in the non-profit sector?

BITCI News - Members News - Oct 03, 2013


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The attention given to the governance of charities has risen dramatically following the introduction of the new Governance Code in 2012 and through greater press and public scrutiny.

In addition,   the announcement in June this year by the Minister for Justice and Equality, Alan Shatter, that the government has approved his plans to proceed with the establishment of a Charities Regulatory Authority as provided for in the Charities Act 2009, has given strong impetus to community, charitable & voluntary organisations to pro-actively address how they govern i.e. lead, manage and operate their organisations.

The Governance Code is a voluntary code of practice for good governance of community, voluntary and charitable organisations in Ireland and has been developed by the sector, for the sector.  All community, voluntary and charitable organisations are encouraged to adopt it. (See www.governancecode.ie).

As charities give priority to establishing good governance practice, there is a role for corporate Ireland to support the non-profit sector in adopting the Governance Code. It is important for corporates to apply good governance, so intrinsic to how they run their businesses.  With this expert knowledge and experience, they can support their charity partners through encouragement and advice in how to go about adopting the Governance Code.

Business in the Community Ireland (BITCI), the network for responsible business, supports the development of strong corporate community partnerships. Businesses are woven into the fabric of social and community life in Ireland. It is simply a natural extension of corporate community engagement to support charities, community & voluntary organisations with their adoption of good governance practice. Trust is a vital component in building strong corporate/communty partnerships. So if non-profit organisations are to maintain this high level of trust in the eyes of corporates; then being open and transparent with how they manage and use corporate donations is critical. The Governance Code is a really solid process for demonstrating strong leadership, risk and operational  management to key stakeholders. Diarmaid Ó Corrbuí, Chairperson of the Governance Code Working Group comments

We in the non-profit sector are not immune to the harmful damage that a major failure in corporate governance would have for our organisations and our sector.  We cannot afford to pay lip service to the need to have robust and monitored governance systems in place. A single event of poor corporate governance can severely damage a reputation that has taken years to build.” 

Leading law firmA&L logos who provide governance advice to clients as a core service are well placed to help raise awareness of good governance practice within the non-profit sector.

A recent example is BITCI member company A&L Goodbody who as part of Responsible Business Week, Community day, will host a seminar on Governance in the Non-profit sector at their offices on North Wall Quay. The seminar is on 16th October and over 100 representatives are expected to attend.  Leading experts in the area of governance such as Paul White, Partner and Chairman A&L Goodbody will be a guest speaker.

“Good corporate governance allows organisations to be run more effectively. Our event is designed to inform the board and management teams of community, voluntary and charitable organisations of their responsibilities to follow a code of good practice – and to understand the benefits, such as providing structure for staff and building trust with the community, fundraisers and government.”  Paul White

Also Kevin Prendergast the Head of Advocacy and Assessment in the Office of the Director of Corporate Enforcement will take part in the panel discussion.

Businesses can play a proactive role with NGO’s through building education and awareness of good governance and by encouraging their charity partners to ’adopt’ the Governance Code.

Further information on the Governance Code can be found on www.governancecode.ie    Group members on the Governance Code Working Group. include: Board Match Ireland, Business in the Community, Clann Credo, The Disability Federation of Ireland, ICTR, Carmichael Centre for Voluntary Groups, The Wheel.



Ann Howgego

Ann Howgego is Corporate Responsibility Consultant (Community Outreach) in Business in the Community Ireland. ahowgego@bitc.ie @ahowgego