Organisational purpose

The Scottish Governance Code states that:

A well-run board is clear about the purpose and values of the organisations and how it will achieve its aims.

As the board, we are ultimately responsible for directing the activity of our organisation and delivering its stated purpose.

The Scottish Governance Code has a list of statements that outline how you can show you are clear about this principle you can find out more here.

Everyone on your board needs to be clear about why you exist and the difference you want to make. You need, collectively, to be clear about your organisational purpose, know what your vision, mission and priorities are, and share a set of values to guide your work and frame your decision making.

Good governance is about acting consistently in line with your organisation’s purpose. This is detailed in your governing document, which is a vital part of good governance, and should be regularly reviewed. It contains important information on how your organisation should be governed and how you should make decisions.

Answer these questions to see how your organisation evidences good governance and is clear about its organisational purpose.

Leadership

The Scottish Governance Code states that:

A well-run board is clear about its role and responsibilities and provides strategic direction in line with the organisation’s purpose, vision and values.

As the board, we are here to lead our organisation, and we are individually and collectively responsible for our decisions. We need to make sure our organisation has a clear strategy to achieve our purpose.

The Scottish Governance Code has a list of statements that outline how you can show you are clear about this principle you can find out more here.

It’s vital as a trustee that you understand your role and responsibilities and your duty to act in the best interests of your organisation and its beneficiaries. You need to understand and respect the difference between governance and operations, and focus on oversight and strategy, rather than day to day activities.

Good governance is about ensuring equality, diversity and inclusion are considered across all aspects of your organisation. It’s about all trustees knowing they are equally accountable for their decisions, and the importance of active and collective participation in transparent and effective decision making.

Answer these questions to see how your organisation evidences good governance in its leadership.

Board behaviour

The Scottish Governance Code states that:

A well-run board, both collectively and individually, embraces and demonstrates mutual respect, integrity, openness and accountability.

As the board, we understand that our behaviour can have a far-reaching effect and is fundamental to our organisation’s reputation and sustainability. We need to make sure our behaviour is consistent with our organisation’s vision and values.

The Scottish Governance Code has a list of statements that outline how you can show you are clear about this principle you can find out more here.

Board behaviour, both collectively and individually, can have a far-reaching impact on an organisation’s reputation and success. As trustees, you need to understand the importance of collective decision making and proactively manage any conflicts of interest or power imbalances on your board.

Good governance is about ensuring your board’s behaviour is consistent with your vision and values. That means making sure you promote equality, diversity and inclusion and incorporate these principles and ethical standards in the policies, practices and culture of your organisation.

Answer these questions to see how your organisation evidences good governance in its board behaviour.

Control & Risk Management

The Scottish Governance Code states that:

A well-run board will manage risk, maintain control and make effective decisions to direct and oversee the progress and performance of the organisation.

As the board, we should put in place appropriate structures, financial controls, policies, and procedures. These will help our organisation to identify and manage risks and opportunities in line with its purposes and values, our governing document, and relevant legal and regulatory requirements.

The Scottish Governance Code has a list of statements that outline how you can show you are clear about this principle you can find out more here.

Control and effective risk management is essential to good governance. Trustees are there to safeguard their beneficiaries, the assets, and the reputation of their organisation. They need strong controls in place to do this.

Good governance is about trustees knowing their legal, regulatory, and contractual obligations. It’s about regularly reviewing policies and procedures, and the legal structure of the organisation. Trustees must identify and assess both risks and opportunities and decide how best to manage them. They each should understand their collective financial responsibilities and ensure their organisation fundraises ethically and in line with their organisation’s purpose and values.

Answer these questions to see how your organisation evidences good governance in its control and risk management.

Effectiveness

The Scottish Governance Code states that:

A well-run board understands its role, powers and duties, and works collectively and proactively to achieve its organisational purpose.

As the board, we should work together as a team, with an appropriate range and balance of skills and experience, to continually improve the governance of our organisation.

The Scottish Governance Code has a list of statements that outline how you can show you are clear about this principle you can find out more here.

An effective board is one where the trustees understand their role, powers and duties, and their organisation’s values and purposes. The trustees’ role is to set and monitor the strategic direction of their organisation.

A diverse board is an essential part of good governance. To be effective and sustainable, a board should regularly review the skills, experience and performance of its trustees. You should have a clear succession plan and a process for open and transparent trustee recruitment to ensure diversity and representation on your board. New trustees should have a through induction and the board should continually develop their skills and experience.