3B: Governance structures & accountability

Developing confidence in the governance of your organisation to manage the transfer process is key

Section 3 progress

When it comes to making decisions about whether to agree an asset transfer, local authorities need to make sure that they are confident that the governance of the organisation is robust enough to manage the transfer process and the running of the business and the facility.

Good governance

Local authorities used to do this this by having a place on the management board for an officer or a councillor. This is no longer so common due to legal issues and also lack of time, so local authorities need other safeguards and assurances about good governance.

Good governance essentially means leading and managing your organisation effectively, legally and fairly in line with the governing document and the regulatory rules appropriate to your type of organisation (e.g. Charity, Community Benefit Society, Company, etc).

In general, the main things that will provide confidence to a local authority that the organisation is fit and ready for a transfer are the following:

  • A Board or Committee with all key roles filled (Chair, Treasurer, and Company Secretary)
  • Essential skills on the board or available to the board as advisors – financial, legal, marketing, asset management
  • A board which reflects the wider community or user group in its make-up
  • Regular meetings and good management information to support decision-making and good records
  • Sound financial management procedures
  • An up-to-date set of policies covering Risk, Health and Safety, Equalities, Protection of children and vulnerable adults, financial management and HR
  • A Governing Document which enables accountability and good governance – for example the ability to remove poor performing Board members
  • Transparency in decision-making and a good track record in reporting to the appropriate regulator e.g. The Charity Commission
  • A strong volunteer base and good community networks.

Incorporation is not an absolute essential – but in most cases it is recommended before taking on responsibility for a significant asset since it protects the individuals involved and provides more external accountability and regulation.

Good governance essentially means leading and managing your organisation effectively, legally and fairly in line with the governing document

It may be that in the history of the club or organisation there have been governance problems or issues which are well known. If that is the case you will need to work harder to show how you have moved on from that to better management and governance.

There are a number of useful ‘health checks’ and assessment tools which can be used by both parties to assess the robustness of the organisation and identify any areas of weakness which need to be addressed. Some Local Authorities also develop their own. For examples see the following:

Community: Have you looked at your governing document and checked you are complying with it?
Community: Have you had a recent AGM and approved you annual accounts?
Community: Do you have robust financial management procedures which are followed at all times?
Community: Do you have good records of decision-making and do board members report conflicts of interest?
Community: Do you have the right policies in places ready for transfer?