ICAS ICAS logo

Quicklinks

  1. About Us

    Find out about who we are and what we do here at ICAS.

  2. Find a CA

    Search our directory of individual CAs and Member organisations by name, location and professional criteria.

  3. CA Magazine

    View the latest issues of the dedicated magazine for ICAS Chartered Accountants.

  4. Contact Us

    Get in touch with ICAS by phone, email or post, with dedicated contacts for Members, Students and firms.

Login
  • Annual renewal
  • About us
  • Contact us
  • Find a CA
  1. About us
    1. Governance
  2. Members
    1. Become a member
    2. Newly qualified
    3. Manage my membership
    4. Benefits of membership
    5. Careers support
    6. Mentoring
    7. CA Wellbeing
    8. More for Members
    9. Area networks
    10. International communities
    11. Get involved
    12. Top Young CAs
    13. Career breaks
    14. ICAS podcast
    15. Newly admitted members 2022
    16. Newly admitted members 2023
  3. CA Students
    1. Student information
    2. Student resources
    3. Learning requirements
    4. Learning updates
    5. Learning blog
    6. Totum Pro | Student discount card
    7. CA Student wellbeing
  4. Become a CA
    1. How to become a CA
    2. Routes to becoming a CA
    3. CA Stories
    4. Find a training agreement
    5. Why become a CA
    6. Qualification information
    7. University exemptions
  5. Employers
    1. Become an Authorised Training Office
    2. Resources for Authorised Training Offices
    3. Professional entry
    4. Apprenticeships
  6. Find a CA
  7. ICAS events
    1. CA Summit
  8. CA magazine
  9. Insight
    1. Finance + Trust
    2. Finance + Technology
    3. Finance + EDI
    4. Finance + Mental Fitness
    5. Finance + Leadership
    6. Finance + Sustainability
  10. Professional resources
    1. Anti-money laundering
    2. Audit and assurance
    3. Brexit
    4. Business and governance
    5. Charities
    6. Coronavirus
    7. Corporate and financial reporting
    8. Cyber security
    9. Ethics
    10. Insolvency
    11. ICAS Research
    12. Pensions
    13. Practice
    14. Public sector
    15. Sustainability
    16. Tax
  11. CPD - professional development
    1. CPD courses and qualifications
    2. CPD news and updates
    3. CPD support and advice
  12. Regulation
    1. Complaints and sanctions
    2. Regulatory authorisations
    3. Guidance and help sheets
    4. Regulatory monitoring
  13. CA jobs
    1. CA jobs partner: Rutherford Cross
    2. Resources for your job search
    3. Advertise with CA jobs
    4. Hays | A Trusted ICAS CA Jobs Partner
    5. Azets | What's your ambition?
  14. Work at ICAS
    1. Business centres
    2. Meet our team
    3. Benefits
    4. Vacancies
    5. Imagine your career at ICAS
  15. Contact us
    1. Technical and regulation queries
    2. ICAS logo request

Stronger charities through good leadership

  • LinkedIn (opens new window)
  • Twitter (opens new window)
By Colin Kerr CA

9 November 2016

Trustees Week Logo

As Trustees’ Week 2016 celebrates the UK’s 1 million trustees and promotes the benefits of volunteering to be a trustee, Colin Kerr reflects on public expectations of the CA as a charity trustee and shares some informal good practice guidance.

ICAS continues to issue guidance to independent examiners who are involved in charities, often in a pro bono capacity. However, many CAs will find themselves acting for charities in a non-executive capacity, often as Chairmen, Chairs of Audit Committees or Honorary Treasurers.

The challenges are different in these roles, but what is consistent is a public expectation – both within and without the relevant charity – that having a CA on the Board brings with it expectations of professional skill, integrity and – above all – judgement.

What am I joining?

It is human nature to be flattered when approached to join a charity’s Board as a trustee, particularly if the aims of the charity resonate strongly with your own values. But start by being clear why they want you.

Are you replacing an older person in an equivalent role (fine – but be sure that you speak to them); are you there in response to anxieties from the bank or from the Charity Regulator (less fine) or is it because they are beginning to spiral out of control and the cash is running out (definitely not fine). Be sure that you understand completely the basis for the approach.

Be clear exactly what your role is and that you are comfortable with that role: don’t be a square peg in a round hole. Particularly, don’t be coerced into a role heavy on fundraising and networking if you are not that sort of a person.

Do your own due diligence. Ask to see the last set of audited or independently examined accounts and the most recent management accounts (if these are produced: if not, scan the last year’s bank statements). Are there any banking covenants and, if so, are they being complied with?

Financial governance

Whatever the precise nature of your role as a Trustee, your professional background brings expectations. It is essential that you make it clear what financial and related information you would have to see produced for each meeting. The detail will be contingent on the size of the charity, but should include:

  • An overall strategy document, setting out basic objectives for the next few years and how they are to be achieved. There would have to be high level financial numbers linked to each of the years. It would be essential to see that the Trustees understood these objectives and numbers and that the staff had ownership of the numbers. Even in the smallest charity, these basics must be in place.
  • There must be a budget for the year, consistent with the strategy. Again, be satisfied that there is ownership of this budget by the staff (if not, it will become apparent very quickly). Specifically, look out for “heroic” assumptions on income generation and/or cost cutting: they won’t happen.
  • From the budget should come a high level cash flow forecast for the year.
  • As a non-executive you have to be inherently comfortable with these three documents: your fellow Trustees will look to you for assurance and your objectivity is of fundamental importance. It is essential that you challenge any aspect where you have misgivings and only “sign off” when you are comfortable. If you have reservations or caveats to your approval, make sure that they are clearly recorded and flow through to the risk process.
  • Turning to the flow of management information, you will want to see management accounts (i.e. performance against budget) and a cash statement (i.e. performance against the cash flow). However small the charity, you must have this sort of information (quarterly at least) in order to fulfil your responsibilities as a Trustee. Don’t hesitate to say how you want to see these data presented. Again, your fellow trustees will look to you for assurance.

Risk management

Unless the charity is quite large, it is unrealistic to expect a “bells and whistles” risk management system.

But what is essential for good governance is to get an agreement on what constitutes the top ten risks to the organisation: what would make for “sleepless nights” if they went wrong.

Once defined, the chief executive (or equivalent) should provide a credible update at each trustee meeting. What matters is not so much the paperwork, but that there is a real and robust discussion at each meeting on the key risks. All of this should be minuted and actions clearly set out.

Objectivity

Arguably the toughest call for a CA Trustee is the “Emperor’s New Clothes” role. To be able to look at the data objectively and to draw realistic conclusions.

Not so much about imminent disasters, but more about continually negative trends: less cash, less market share, less success in tenders, less skilful staff.

This could be about poor management, but it could also be about the emergence of bigger and better charities operating in the same environment. It could be the consequence of fiscal tightening by Local or National Government.

It is about having the courage to point out that things need to change. “Going concern” should be seen beyond the normal financial reporting criteria: do we - do you – have confidence that your charity has a future? And if not, what are the options?

ICAS hosts Edinburgh summit on international charity accounting 2016

By ICAS

5 October 2016

ICAS logo

Footer links

  • Contact us
  • Terms and conditions
  • Modern slavery statement
  • Privacy notice
  • CA magazine

Connect with ICAS

  • Facebook (opens new window) Facebook Icon
  • Twitter (opens new window) Twitter Icon
  • LinkedIn (opens new window) LinkedIn Icon
  • Instagram (opens new window) Instagram Icon

ICAS is a member of the following bodies

  • Consultative Committee of Accountancy Bodies (opens new window) Consultative Committee of Accountancy Bodies logo
  • Chartered Accountants Worldwide (opens new window) Chartered Accountants Worldwide logo
  • Global Accounting Alliance (opens new window) Global Accounting Alliance
  • International Federation of Accountants (opens new window) IFAC
  • Access Accountancy (opens new window) Access Acountancy

Charities

  • ICAS Foundation (opens new window) ICAS Foundation
  • SCABA (opens new window) scaba

Accreditations

  • ISO 9001 - RGB (opens new window)
© ICAS 2022

The mark and designation “CA” is a registered trade mark of The Institute of Chartered Accountants of Scotland (ICAS), and is available for use in the UK and EU only to members of ICAS. If you are not a member of ICAS, you should not use the “CA” mark and designation in the UK or EU in relation to accountancy, tax or insolvency services. The mark and designation “Chartered Accountant” is a registered trade mark of ICAS, the Institute of Chartered Accountants of England and Wales and Chartered Accountants Ireland. If you are not a member of one of these organisations, you should not use the “Chartered Accountant” mark and designation in the UK or EU in relation to these services. Further restrictions on the use of these marks also apply where you are a member.

ICAS logo

Our cookie policy

ICAS.com uses cookies which are essential for our website to work. We would also like to use analytical cookies to help us improve our website and your user experience. Any data collected is anonymised. Please have a look at the further information in our cookie policy and confirm if you are happy for us to use analytical cookies: