A party seeking to restrict another's commercial activities must consider whether such terms are normal in similar, factual and contractual circumstances.
On 25 June 2020, the Charity Commission issued a regulatory alert to all leaders of large or complex service-providing charities. The alert was issued on the same day as the Charity Commission’s Inquiry Report into the Royal National Institute of Blind People (RNIB).
The Inquiry arose following safeguarding concerns at the RNIB’s Pears Centre for Specialist Learning, which comprised a school and children’s home. The safeguarding concerns and related governance failures resulted in the closure of the centre, forcing a sale of the property for £16m less than the cost of its development.
The Charity Commission’s investigation into the RNIB should serve as a stark reminder of the importance of good governance and ensuring that robust safeguarding procedures are in place.
Whilst the alert was put out to all charities having the profile of:
- an income of over £9 million, governed by a board of trustees and run by a separate group of executives; and
- a service-providing charity.
Governance on management risks identified in the alert are those which are relevant for any medium-large charity. It is the case, of course, that it is not only large service delivery charities that have a board of trustees and a senior management group or group of executives – which structure was the focus of the Commission’s alert.
Whilst it is not mandatory for any charity to adopt a governance code, the regulatory alert did refer all of the 600 charities to the Charity Governance Code, a code which was developed by a steering group of various charities and organisations, and which was last updated in 2017. For charities seeking to embark upon bolstering their trustees' oversight of their charity, to enhance their governance structures, or simply to continue an ongoing process of ensuring good governance, the Charity Governance Code can provide a good structure to guide charities through that process.
As [hopefully] all trustees should be aware, the past several years have seen many high profile failures by household name charities which have led to substantial inquiries by the Charity Commission.
Good governance can often be seen by those within the charity sector as something esoteric, and which has very little impact on the day-to-day workings of a charity. However, as the Oxfam and RNIB investigations have taught us, lack of sufficient oversight can lead to very serious real-life consequences. RNIB’s failings impacted the young people in its school and residential homes. Oxfam’s safeguarding failures led directly to serious harm being suffered by children in Haiti.
The Commission described their investigation into the RNIB as ‘lifting the lid on a metaphorical can of worms into the charities’ affairs’ and revealing ‘comprehensive failures in governance that placed the safety of young people in its care at risk and allowed harm or distress to be suffered by some.’
The concerns identified included; the failure to recruit appropriately trained and qualified staff, ineffective safeguarding processes, failing to record and properly manage the behaviour of vulnerable children and persistent medication issues. A series of investigations concluded that the RNIB Pears Centre operated with too much autonomy and that quality of care within regulated services was left to local teams rather than being overseen and directed by the central management.
Those problems were compounded by a lack of oversight at board level, with responsibility for safeguarding delegated to a second-tier committee described as ‘wholly ineffective’ and which lacked safeguarding experience.
Once again, the Charity Commission has raised concerns relating to the appropriate reporting of serious incidents. Despite the issues at the heart of the investigation having been raised consistently over several years by the Care Quality Commission and Ofsted, a report was only made by the RNIB to the Charity Commission days before Ofsted served a formal notice seeking to close the Centre.
The Charity Commission has emphasised that protecting people and safeguarding responsibilities should be a governance priority for all charities. These sad events reinforce the need for Trustees to have sufficient oversight of risk and to be prepared to challenge senior management, where appropriate.
It is also worth considering how Covid-19 may impact upon a Charity’s risk in relation to safeguarding.
At a time of increased financial pressure, there is a risk that corners may be cut. Frontline staff, who have been working under considerable pressure and may face uncertain futures of their own, could be at risk of burnout. When the focus has been on Covid-19 related risks, it is possible that standards in other areas have slipped. An increase in remote working may also make effective supervision harder to implement, replicating some features of the closed cultures which have featured in other high-profile cases of abuse.
Against that background, trustees will need to ensure that governance arrangements are effective in all areas of risk and to reconsider whether there is a greater need for focus upon safeguarding.
For more information
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