governance

Governance, Uncategorized

DUA Governance Standards: The Bridge Between Intention and Impact

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Every charity begins with a dream.A dream to change lives, to bring hope, to answer a call of duty.But alongside the dream, important questions often remain: “Are our trustees really guiding the ship?”“Do our accounts tell the full story?”“Are our staff protected and well equipped?”“And when donations—especially Zakat—are entrusted to us, can we prove they reach the people we promise?” These questions led to the creation of the DUA Governance Standards:four outcomes, eighteen criteria, four standard levels, and one clear framework—designed to help charities flourish with integrity. 1. Effective Leadership and Sound Governance Imagine a board of trustees that only meets when something goes wrong.Meetings are rushed, decisions unclear, and reports barely read.Now picture the same board gathering with purpose—reviewing management accounts, reflecting on impact,and setting direction with confidence. “The standards help trustees step into their rightful role, not as silent names on paper, but as guardians of mission and accountability.” 2. High-Level Financial Controls In some charities, funds blur together—donations, Zakat, Sadaqah—until no one can say with certainty where each pound went. The DUA Standards show a better way:robust banking and procurement controls,a clear accounting system,audited accounts submitted on time. “When finances are transparent and controlled, they stop being a burden and become a source of trust.” 3. Skilled and Supported People Behind every charity are people—passionate and committed.But passion needs structure.A strong finance voice in decision making.Qualified staff with fair contracts.A safe way to raise concerns. “When people feel secure and heard, trustees feel informed and the charity grows stronger than any single personality.” 4. Charitable Spending is Transparent and Well-Governed At the heart of every charity is service.Yet without care, even good intentions can drift.Zakat without policy. Partnerships without checks. Projects without feedback. The DUA Standards guide charities to pause and ask: “Is this spend aligned with our purpose? Are we acting on time, with transparency and care?” When the answer is yes,donors feel reassured, beneficiaries feel seen, and the mission shines.A Shared TransformationThe story is not of one charity but of many. “Trustees who once felt overwhelmed now meet with clarity.Accounts that once confused now tell a clear story.Staff who once worried now feel valued.Donors who once doubted now trust.” This is the story of the DUA Governance Standards—not rules for their own sake,but a bridge between intention and impact. Take Your Next Step Join us to see these standards in action: – Online Seminar – October 2025 How to Read Charity Accounts – A Simple Guide for Non-Finance Trustees → Learn to spot risks, ask the right questions and see how the DUA Standards fit your charity. – In-Person Conference – Birmingham, November 2025Governance in Practice: Building Financial Resilience for 2026 and Beyond → Network with trustees and executives, hear case studies, and explore a full DUA Financial Standard review. “Governance is not red tape—it’s the bridge between dream and delivery. Every charity deserves that bridge.” End – Author: Nasir Rafiq is a widely experienced Fellow Chartered Accountant (ICAEW) and a Charity Financial Governance Expert. He is the Managing Partner of Dua Governance, a Charity Governance specialist accountancy firm. Nasir has held many senior finance positions within the UK charity sector and continues to advise many charities on governance and leadership matters. Email: info@duagovernance.com Website: www.duagovernance.com

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The Journey of life, its paths & destinations

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I went for a walk in a nearby Valley Park. This comes after some emotional and thoughtful weeks after the sudden death of a university sister. I worked with her in the Leicester University Islamic Society, which I presided over 24 years ago. She died from an illness that she hid from her closest. Her death shocked all who knew her and worked with her. She was loyal, shy, caring and principled. After leaving University, she took on her family business and expanded it. Many remember her conduct with family, employees, suppliers, and customers. She was a role model for many, and many relied on her for her leadership and the selfless care she gave to them. Her death invoked memories among the group of her university friends. Although it had been 24 years since I had met or spoken to her, it also made me revisit my steps back then. As I walked through the park, I contemplated my life journey. Strangely, the changing scenery and paths around me started to talk to me in my imaginary world. I began to paint a picture in my mind of my life journey. This path led to other paths; sometimes, I took the wrong turn, turned back, and chose another path. This reminded me that our lives take similar paths and turns. I started my walk in the park by choosing a path with a target destination: Swan Lake. This path led to other paths; sometimes, I took the wrong turn, turned back, and chose another path. This reminded me that our lives take similar paths and turns. After University, I took a path and made decisions that dictated my next 24 years. I started to revisit and question my paths as my memories returned to those moments 24 years ago. The weight of the “what if” moments started to play heavily on my chest as if failures of lost opportunities underpinned my worldly successes. Allhamdulillah, I may have had a promising career and life that many may desire. I discussed this in a recent radio interview (see link below). Yet, my mind started questioning this for all the paths I could have taken, the lost opportunities, and the many achievements that could have been different and perhaps better. The weight of the “what if” moments started to play heavily on my chest as if failures of lost opportunities underpinned my worldly successes. I felt sadness and pain as I walked and crossed different paths. This was not about personal wealth but the impact on broader society and infrastructure. Was I lost in my life journey? I questioned myself as I continued my walk. Lost in my thoughts, the path opened to my set destination. It is a beautiful lake with stunning majestic swans gliding through the water under a clear blue sky, making everything clear to observe and enjoy.     A painful reality hit me as I sat on the bench to soak in the moment, processing my thoughts. The sister’s death reminded me of the temporary nature of this destination, this world, these life paths that we choose to walk on, these destinations that we set ourselves, and all our life struggles. It all eventually dies and moves on. What is left after we are gone is what matters. What matters are the memories of the moments we live, the impact we have on the lives of others, and how they remember us, just like the memories of this sister. What is left after we are gone is what matters. What matters are the memories of the moments we live, the impact we have on the lives of others, and how they remember us, just like the memories of this sister. We remember her legacy, kindness, principles, leadership, and caring nature. This realisation influenced me and replaced my immediate memory of my path choices. I remembered the sounds of the birds chirping, the cool breeze, the happiness of people who walked past me, and the kindness of the old couple who warned me of some rough paths ahead. I concluded that it is not the choices of the life paths that we take that matter; it’s what we do with them and how we conduct ourselves as we walk them that define us. I revisited my life journey to find these moments. I was accompanied by a loving and caring wife, the childhood of my beautiful daughter, and our travels as a family, making every moment worth living for. During my professional work, solving and resolving problems in charities and successfully dealing with crises they find themselves in is an aspect of my life that matters, not career choices. We may think we chose the wrong path or ended up in the incorrect destination—this does not matter, as it all ultimately dies. God decides our paths to test us. We may think we chose the wrong path or ended up in the incorrect destination—this does not matter, as it all ultimately dies. God decides our paths to test us. We should focus on what stays and lives on: the memories and impact we leave on this temporary world. We need to fill our paths with these memories, regardless of the paths that we embark on. Content with my conclusions, I returned to my car as if I had found a treasure in my quest as I remembered this special sister. Having lived my old memories once more, one thoughtful memory braced me. A poetic verse of a famous Sufi poet, Altaf Hussain Hali. I read and memorized in Urdu as a kid. It went on something like this: Valuable lessons are taught to us by graves. We find this treasure from this burial.   I had found my treasure through the sad death of this special sister of ours. May Allah swt grant her the highest paradise. Ameen. End.   Author: Nasir Rafiq is the Managing Partner of Dua Governance Chartered Accountants & Business Advisors. He is also

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The Gaza Crisis, UK Mosques & Muslim Charities

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The recent Gaza crisis has affected us all. Thousands of civilians have lost their lives in Gaza. The social media and news coverage of women, children and the vulnerable being killed is heart wrenching. Over 2m of the population of Gaza is deprived of water and fuel and face a dire humanitarian crisis as highlighted by independent UN agencies. In times like this, many feel obliged to act and campaign – this is not only a natural human response, but also embedded within the faith of many Muslims. In times like this, many feel obliged to act and campaign – this is not only a natural human response, but also embedded within the faith of many Muslims. The Muslim international relief charities play a crucial role and provide a valuable service in facilitating this donation to the intended population of Gaza. Recently I have been contacted by concerned individuals asking various questions relating to donating or raising funds to Gaza. In this blog, I provide some answers to three questions: Question one: Can my charity raise money for Gaza? It all depends on the charitable objectives and purpose of your charity. If your charity has an objective to provide relief from poverty and / or to provide relief to disaster-stricken people and it does not restrict to a particular location other than Gaza, then your charity can raise funds for Gaza. The following consideration are important to note: 1. Due diligence of delivery partner – Hamas proscription Vast majority of Muslim charities, if not all work through a delivery partner in Gaza. Funds are transferred to these partners to deliver the relief projects. Gaza is governed by Hamas and under UK law it is proscribed as a terrorist organisation. Hence it becomes illegal if any funds of a UK charity end up with Hamas. So, UK charities must satisfy themselves on the following: The delivery partner is not controlled by individuals on the UKs sanction lists. The delivery partner does not use suppliers connected to a sanctioned entity or individual. The delivery partner does not pay rent or taxes to the Hamas regime. Vast majority of Muslim charities, if not all work through a delivery partner in Gaza. 2. The ability to deliver relief Charities will also need to check the ability of the partner to deliver the projects in Gaza. This can be checked by obtaining the following: Governing documents, Bank statements, past project reports, organisational charts, policies, project proposals and references. 3. Satisfying the banks Transferring monies to Palestine generally and Gaza especially is not easy. Banks expect charities to have done their due diligence and will often request evidence to confirm this. Lack of timely evidence after the bank requests information often results in the UK bank or corresponding bank or banks in Gaza blocking or returning the funds. 4. Disclosing the name of the delivery partner When preparing the annual financial statements, charities are subject to charity accounting rules called (SORP). These rules require charities to disclose the name of the delivery partner used in that period and the amounts paid to them in that year and in the prior year. I sometimes find some charities attempting to omit this information in their annual statements giving a false impression to readers of the statements as if the charity directly delivers projects in Gaza. Overheads paid to separate entities that deliver projects on behalf of the UK charity are not disclosed in the UK charity accounts. This is one of the reasons why for transparency purposes the charities are required to disclose the name and total amount paid to the deliver partner in their annual financial statements. Overheads paid to separate entities that deliver projects on behalf of the UK charity are not disclosed in the UK charity accounts. Question two: Can my Mosque raise funds for Gaza? Yes. and this depends on the charitable objectives of the charity that runs this Mosques. Mosque charities often have objectives that are restricted to furthering the religion of Islam by providing a facility to worship – this may not allow fundraising for international relief projects unless a clear link can be made with the act of worship. For example, Mosques may be able to raise Zakat funds and use a delivery partner in Gaza to execute the Zakat funds to the needy. Mosques can partner with international relief charities and provide them access to their congregation and facilities to directly raise funds for Gaza. Mosques can enter into agreements with these charities to restrict the funds to specific projects and be compensated on any costs incurred in raising these funds. Question three: Can Mosques carry out political campaigns and activity for Gaza? Generally, the answer is No. Charity Commission has detailed guidance on this topic. The link to this detailed guidance can be found here. The general rule is that a charity can carry out campaigns and / or political activities only if it furthers their objectives stated in their governing document. Mosques seldom have human rights objectives in their trust deeds or constitutions. Therefore from Mosque platforms and / or using Mosque resources to lobby local or central government for a foreign policy change in relation to Gaza may not strictly be considered an allowable activity. This does not mean Mosques cannot or should not voice their concerns or carry out activities in responding to this crisis. Below is a list of activities Mosque can and should carry out: Educating the congregation on the current situation in Gaza through religious sermons and lectures. Making statements that link back to faith, sanctity of life, religious harmony and coexistence with other faiths. Providing facilities and access to congregations to activists for education, petitions, protests all for awareness purposes. Providing young people safe spaces to discuss the issues with a faith lens and in the context of the society Mosques operate in. Inviting local politicians to address the congregations on their positions. Trustees or employees in their personal capacity and

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Bank Account Closures & UK Muslim Charities

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The Nigel Farage’s bank account closure with a bank for the rich has hit a nerve for the Government and the media. The calling of the banking leaders to Downing Street and the resignations of the Group CEO and its subsidiary Banks CEO shows this was no little crisis. This whole saga as it played out questioned the role of banks in our lives and wider society. I deal with banking issues regularly for my charity clients, large and small. I have seen many examples, good and bad, so it’s imperative to understand the role each plays to understand the real issues. The Banks and their role in business and society Banks are private businesses, set up to make money for their shareholders. They are not politically aligned (we think so). Yes, during the banking crisis of 2008, the Government stepped in and now owns 39% of the NatWest Group – this is rare and did not change the business objectives of the bank. Banks are subject to stringent anti money laundering and government sanctions regime with hefty fines when it goes wrong. All designed to regulate the banking conduct to the government domestic and international needs hence international events and wars make this a constant changing environment for sanctions. The introduction of the Politically Expose Person (PEP) protocols to stop corruption by people misusing public office adds another dimension to banking responsibility and risk management. Nigel Farage was picked up by his bank as a PEP but what made the story interesting is that after he made a subject access request, he found that his political views were also considered as a reputation risk for this niche bank and its niche clientele. “The Nigel Farage story has shaken the very foundations of trust in the wider banking system”. This has shaken the very foundations of trust in the wider banking system. Given the control banks have on individuals and entities, this very notion that banks consider political views when not obliged by regulations, becomes problematic. So where do the Muslim charities in the UK fit into all of this? The impact of 9/11 was a game changer for Muslim charities operating in the West. Muslim charities suddenly found themselves working in high-risk countries subject to sanctions or where sanctioned entities operated. The resulting sanctions regime instantly choked many international charity banking facilities without explanation. No regard was given to any legal or illegal activity as the “perception” of the “ability” to breach sanctions started to dictate the banks risk management process and de-risking. The Muslim sector became guilty until proven otherwise. The International relief sector already had inherent risks of money laundering, aid diversion and fraud for banks to consider, for the Muslim charity sector, it became just that more challenging to convince banks in this new environment. “As a result of de-risking of banks, many individuals unfairly paid the price and their associated charities despite having done nothing wrong or illegal” Another dark side of this additional scrutiny by banks was the spotlight on Trustees. Their social media profile and historical news coverage on the web searches started to become a vital part of the bank’s due diligence. The banks started to de-risk charities based on unfounded risks and perceptions relating to trustees. Many individuals unfairly paid the price and their associated charities despite having done nothing wrong or illegal. Despite this, the Muslim charities in UK generally responded positively. Charities improved their due diligence processes and vetting of partners and responding to banking queries. Many Muslim charities now use the same due diligence software to vet their partners and staff as the banks. Despite the pressures since 9/11, the Muslim sector in UK has exponentially grown with talks of annual income reaching £1bn in UK. This could not have been possible without the partnership Muslim charities have with their banks. However, in transferring money abroad charities continue to face blocks and funds returning. In some instances, and surprisingly, banks have been trigger-happy in closing banking facilities without any explanation. Even charities with just UK operations also affected. So, what should be done, a question I am often asked. My response: 1. Financial Standards must not only be improved, but they should also be exhibited. The Muslim community bruised by constant unfair and malicious media headlines, at times feels as if the whole world is against them. So, when a bank asks legitimate questions, some wrongly see this as an attack on their faith, creating an “us and them” narrative. This approach risks undermining real issues relating to good governance, compliance systems, proper due diligence, and effective audit trails for “end use of funds”. “Muslim sector should confidently and boldly market and exhibit the progress made in addressing compliance and governance issues” Muslim sector should confidently and boldly market and exhibit the progress made in addressing compliance and governance issues. Muslim organisations should sign up to a standard that works for banks and helps to demonstrate good financial governance. Sometimes the race to raise monies creates pressure to look good before donors with emotional marketing material in the year-end financial statements, ignoring the needs of other key stakeholders like banks. Muslim charities like all charities should learn from the mainstream charities that practice good governance. Often such charities, in their annual audited financial statements, will discuss their governance or when it fails against their actions plans and risk management extensively. They do this to assure their stakeholders that they understand the risks relevant to them and how they mitigate these risks. 2. Effective or meaningful third-party check or oversight over the banks decision to close an account. When a charity finds itself with a bank closure notice, it finds limited alternative options for new banking facilities. This has a devastating impact on the vital and often life and dignity saving work charities deliver. “There is no effective or meaningful third-party check or oversight over the banks decision to close an account” There is no process to ensure

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The Power and Art of Mediation

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In the past two decades, I have been involved with many high profile mediation’s. This has become a key feature in many of my past and present engagements. Be it, disputes between trustees, disputes between employee and trustees, issues with regulators or between family business partners. Each time, I came in when all options have been exhausted and there is a stalemate, risk of self-destruction or Charity Commission intervention. With Allah’s blessing, I have always prevailed and have been able to resolve the matter amicably. My suggested solutions and plans achieved satisfaction by all parties and a “win win” solution for all with a clear way forward, Allhumdulillah. Although the outcomes were satisfying, the journey to it was often bumpy with lots of grit, patience, and sacrifice involved.   My approach to mediation is not conventional. Often the traditional culture forces the disputing parties to accept each other’s demands. Emotions and Islam is used to exploit each parties guilt and force corporation on moral grounds. This seldom results in long term and lasting solutions. My approach is far, from it. Mediation should be about justice, fair judgement and agreeing on what is right and fair, in the context of the overall objectives of the organisation and its expected destination. For me, mediation is about justice, fair judgement and agreeing on what is right and fair, in the context of the overall objectives of the organisation and its expected destination. This should not be about personal wins. Mediation or compromise should be about both parties winning, not the strong overcoming the weak which is often seen in traditional mediation. In each mediation, I employ the following same principles: Mediation requires a SMART overall objective I determine the overall SMART objective. Something, I can visualize and touch. Something that makes both parties stronger and win. This is the utmost important part of any mediation. Weak or no objectives, results in outcomes that are weak and at times unfair. Empathy is the ingredient to success I place myself in each parties’ shoes and explore the pressure points. Having empathy is the key ingredient for building trust. Empathy should be the starting point for any mediation. One must see wood from the trees Once the pressure points are identified, I iron them out against the overall objective. It is at this stage; I separate out the noise and the wood from the trees.  Baggage needs offloading People carry baggage that they need help with offloading People carry baggage that they need help with offloading. Sacrifices and compromises must always be for a bigger objective and cause. I make an effort to identify and offload this baggage which is often built up over a longer period based on personal experiences and perceptions. Often brushed under the carpet and ignored – never dealt with and it becomes the monster that stops common sense to prevail. Once I am left with the genuine concerns and risks, I build bespoke solutions, based on my professional judgments and experiences – Again, against the overall objectives of the mediation.  Closure needs work The mediation is then “closed” by all parties agreeing to “my solution”. By this time, I have earned the trust, strong emotions are ironed out and the focus for both parties is on the “win win” solution. The details are agreed and then signed off. All the above is accompanied and peppered with hard work, difficult discussions, listening, patience, moments of quiet meditations and a hard resolve from me with no compromise. Mediation is most relevant at the top People in positions of responsibility often end up carrying lot of baggage – this builds up over time, much depends on them being able to work effectively with each other. This is not always possible, and this inability of being able to work together often risks bringing the whole building down with years of “building” and “achievements” to a dramatic loss. This is where mediation then becomes that tool that can put the train back on its track. Mediation is not about making people love and hug each other – its about achieving objectives and making sure the train gets to its destination. Mediation is not about making people love and hug each other – its about achieving objectives and making sure the train gets to its destination.   End – Author: Nasir Rafiq is a widely experienced Fellow Chartered Accountant (ICAEW) and a Charity Financial Governance Expert. He is the Managing Partner of Dua Governance, a Charity Governance specialist accountancy firm. Nasir has held many senior finance positions within the UK charity sector and continues to advise many charities on governance and leadership matters. Email: info@duagovernance.com

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Important Lessons from Strawberry Picking

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Strawberry picking is a fun day out for all ages. This outdoor activity has it all, sweet fresh berries, a walking exercise and a family fun activity of picking various fruits from their plants. In this innocent activity, one can also “pick” many lessons for individuals and organisations. As I walked through the various fruit lines, I started to pick many of these lessons and came across the following four valuable lessons: Lesson 1: Sweet fruits are on branches that hang down Branches full of fruit are the ones that hang down with the weight of their fruits. This is also true in real life. Individuals that are humble and flexible are the ones that attract people and affection like that branch full of fruits. Individuals and leaders that are arrogant and inflexible tend to find themselves like those branches pointing in the air with no fruit – nobody likes them or entertains them. Its not the branch that matters but the fruit on it – In real life we forget this. It’s not the person but the personality and personal conduct matters. It’s not the person but the personality and personal conduct matters – both define qualities the person and make it so that people benefit. Lesson 2: Size, colour, and design does not matter Many strawberry farms, also grow many other berries as well. From strawberries to raspberries and blueberries. Each berry is different in size, colour, plant, and taste. When ripe and juicy each of them energises the taste buds and gives immense pleasure. The key word here is “ripe” and “ready to eat”. In real life we focus too much on size, colour, ethnicity, and political affiliations, like the farm the world is full of variety – what should matter is maximising the ability and impact of individuals and organisations. When ready the fruit will taste the best on their own plant – it’s wrong to expect the blueberry to grow and taste good on a strawberry plant or vice versa. Like plants, individuals are at their best in their own environment and identity – this should be respected, celebrated, and protected for them to “ripe” and excel. Like plants, individuals are at their best in their own environment and identity – this should be respected, celebrated, and protected for them to “ripe” and excel in all walks of life and organisations. Where this is ignored, it’s the organisations and leaders that lose out from the potential talent and resource those individuals could have offered. Lesson 3: It’s the picking that dictates the quality of the basket The fun in strawberry picking comes with holding the basket and picking the fruit into it. The thousands of plants have thousands of fruits hanging on them at different stages of their life, some ripe and some not as ready. They hang in groups and on different branches. Depending on their position on the plant and branch – they can taste different, sweet, or bitter. It is how and when they are picked determines, the quality of the fruit in the basket. A farm full of fruit that looks unripe may still generate a basket with ripe and colourful tasting fruit. This requires effort and time for the picker to dig deep in finding the ripe fruit. Organisations that have good quality staff have impeccable recruitment practices – they reach out and plan carefully to find and retain the right talent. These organisations then stand out and achieve their objectives – It is then the basket of fruit gives the right pleasure and visuals. Those that go on a “picking” spree influenced by numbers and digits (nothing more) tend to end up with the wrong mix of fruits in their basket. Those that go on a “picking” spree influenced by numbers and digits (nothing more) tend to end up with the wrong mix of fruits in their basket. The basket will eventually cost them at the counter and the fruit will be of no use, leaving a bitter taste. I see this often in organisations, especially charities. Lesson 4: Season and gardening make the difference As we are walking out of the farm, we came across some berries out of season – their plants were fruitless and resembled wild bushes with no use.  We were so wrong. Given the right season, care and effort the farmers will put into them, they are to taste better than the sweet berries in season we were tasting today. In real life, the same mistake is made with individuals and organisations. We are trigger happy to right them off not realising that we may be meeting them in the wrong season or all they require is care and effort to blossom. Instead of waiting for the right season or investing in care and training, we judge them and leave them with wrong labels. Hence losing out from the ability and impact they could have shown. Like sweets berries, individuals and organisations require the right environment, care, training, mentoring and guidance to grow and bear fruits for many to enjoy. End – Author: Nasir Rafiq is a widely experienced Fellow Chartered Accountant (ICAEW) and a Charity Financial Governance Expert. He is the Managing Partner of Dua Governance, a Charity Governance specialist accountancy firm. Nasir has held many senior finance positions within the UK charity sector and continues to advise many charities on governance and leadership matters. Email: info@duagovernance.com Website: www.duagovernance.com  

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Charity Leaders: Why personal conduct matters

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The charity sector represents public benefit. Leaders of charity offices often preside over limited resources in the context of the job required of them. They also take decisions on donor funds and their decisions can have a far-reaching impact on the people that work in charities and / or the beneficiaries. Staff may be asked to sacrifice for the greater good, for beneficiaries sometimes this can be a matter of life and death or economic survival. Charity leaders must be able to lead an effective team; their success depends on it. Charity leaders must be able to lead an effective team; their success depends on it. In doing so leaders often have to take difficult decisions to bring the best out of them. The team must be able to trust and respect the leader. Leaders can train future leaders only when their followers can see them as role models and mentors. In this context the personal conduct of a leader especially in the charity matters. It becomes the difference between success and failure. A leader may move mountains, people and followers will forget that – however the conduct on how those mountains were moved is what becomes the legacy of that leader. It’s the personal conduct that touches people and followers and becomes part of the human memory and emotional history of the leader. Below are some common leadership characteristics and conducts that I have experienced in the charity sector that are proven to make a difference: Trust requires building People and followers must be able to trust their leader. It is only through the trusting, it becomes easier for the people, followers and teams to sacrifice and backdown at their personal cost. Trust is created by being able to follow through on promises without compromise. Trust must be earned and does not automatically come with positions – The leader can build it or break it. Trust must be earned and does not automatically come with positions – The leader can build it or break it. Trust is built by being transparent in public and private communications. Consultations promote trust especially when the followers / team members know that they will be consulted – this builds trust within the team. Trust grows in humility by accepting mistakes when they are made, and all leaders make them. All this requires consistency and patience by the leader. Fairness come what may Leaders enjoy powers entrusted to them over those that follow them. How they use these powers for the greater good of the office they represent identifies their conduct. Those leaders that don’t compromise on fairness tend to be more powerful and effective than those that compromise to benefit family, friends, or personal business interests – A leader may have favorites on a personal level – this must not skew the balance of fairness in the organisation. Nepotism eats personal conduct like termites eating wood Nepotism eats personal conduct like termites eating wood. One the face of it the wood has structure, the termites eat it from within. The wood sound then becomes hollow when tapped, just like the leaders that constantly compromise on principles over nepotism. When these leaders are tested, their teams abandon them over their hollow rhetoric. Being fair and more importantly the perception of being fair (as important) is a crucial conduct that effective leaders often display. This requires the leader to stick to policy and process and become a role model in doing so. Justice is not for the weak Humans are not angels – they make mistakes or do wrong. Teams and followers are not immune from it. An effective leader when confronted with wrong, deals with it. As not dealing with it promotes it, grows it, spreads it – there is always a limit on how much dust can be swept under the carpet. Whenever (and it will) the carpet is removed, all is laid bare, and it is then reflected on the conduct of the leader. Justice has its value when it can be felt and seen. This sets the standards and creates an environment where mistakes and wrongs are less made and discouraged. It becomes the moral compass for leaders and their followers / teams – with this compass they cannot go astray. Being just becomes the moral compass for leaders and their followers / teams – with this compass they cannot go astray. The good practice that is practiced Leaders that tend to take personal conduct seriously, often lead organisations with: effective HR and operational policy and processes that are followed, good and consistent performance management processes, effective organisational structures that achieve good quality consultation and accountability, fair and effective recruitment policy and processes – the right person the right job, a skillful rotating board that appoints the leader on merit and holds the leader accountable.   End – Author: Nasir Rafiq is former Interim Finance & Corporate Services Director of Islamic Relief Worldwide (2016-2019). He has held many senior finance positions within the UK charity sector and continues to advise many charities on governance and leadership matters. Nasir is the Managing Partner of Dua Governance Chartered Accountants and Business Advisors. A firm specialising in the charity sector. He is a widely experienced Fellow Chartered Accountant (ICAEW) and a Charity Financial Governance Expert. Email: info@duagovernance.com

Uncategorized

Dua Financial Standards for (all size) Charities

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During the past decade the number of Muslim charities raising funds has increased. Smaller charities have become large and larger charities have become more complex. As the size and reach of charities increases, the need for better and robust financial governance significantly increases. It is only through this, donor monies can be protected and spent properly on charity projects the donors intended for. In addition to donors, the banks and the Charity Commission take financial governance and anti-money laundering risks very seriously as well. When things go wrong, interventions from both can have an effect of impairing charity operations significantly. Charity Commission interventions have sanctioned Trustees and CEOs and when Banks feel unfordable with financial governance they have closed bank accounts and / or stopped bank transfers to vital operations. What does good financial governance look like in a small or large charity? – this is where wrong questions can result in wrong answers – Trustees, managers and donors sometime fall prey to this. What does good financial governance look like in a small or large charity – this is where wrong questions can result in wrong answers – Trustees, Managers and Donors sometime fall for this. Low or no overheads does not mean good financial governance and neither does a good marketing pictorial report on beneficiaries nor a slick emotional video shown by a fundraiser. Donors have the right to ask questions as it is donor money at the end of the that becomes management salaries, admin costs and relief to beneficiaries. However, these questions must be the right ones to ensure charities prepare the right answers. The Dua Financial Governance Standards do exactly that – they provide a comprehensive and meaningful framework for the right questions and for charities a relevant standard through which they can demonstrate their governance. The Dua Financial Governance Standards does that – provides a comprehensive and meaningful framework for the right questions and for charities a relevant standard through which they can demonstrate their governance. There is lots of guidance already available online – the problem with much of this guidance is the lack of knowledge and experience how they should be applied. Not one size fits all. These various guides are often not tailored to the size or the charity risks. They often have an effect of identifying gaps the charity already knew existed. Dua Standards The Dua Standards helps charities demonstrate responsibility, create trust and transparency, and reduces risk of fraud, error & inefficiency. The standards focus on four clear outcomes: The Trustees are adequately involved and accountable. High level financial controls are in place. The staff and skill dealing with finance are suitable The charitable spend including Zakat spend is adequately controlled   The outcomes are matched to a total of 18 criteria tailored to four different income sizes of charities. This ensures the standards remain relevant to income size and underlying risks of the charity. Approach The approach to assessing compliance to the standard is designed to also produce / recommend credible action plans where gaps are noted. These action plans help those charged with governance to steer the management and charity in the right direction. The result is an improved and enhanced financial governance that protects donor monies and makes the monies reach and travel further for the charity beneficiaries worldwide. Next steps Email the team at Dua Governance info@duagovernance.com for further information and timings for an independent professional review. This will include a certification with a credible action plan for any gaps identified.

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Charities and Banks – A difficult relationship

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Banks are the most important stakeholder for charities with international operations. The relief they provide saves lives and protects dignity of beneficiaries in the most remote and desperate places worldwide. However, they can do this properly only when the banks allow them to do so. The role of banks is often misunderstood – is it a regulator? is it an evil business? is it a money transfer agent? or is it a government spy? The answer is No, it can be all of that and more. The role of banks is often misunderstood – is it a regulator? is it an evil business? is it a money transfer agent? or is it a government spy? The answer is No, it can be all of that and more. Banks are private or public limited businesses and have all the pressures a business has – Yes, they can go bust and as we saw during the 1990s banking crisis, size did not matter. The failed banks had an effect of destroying livelihoods and dreams of many. We live in a digital world; no activity be it a noble or a criminal can exist without it. ALL use banks and the banks then suddenly become the conduits in promoting the good and the bad – this is where the government regulation comes in, mainly aimed at stopping the bad as defined by the government and backed by hefty penalty regimes and licenses. To stop the bad and to avoid penalties, the banks adjust their business practices. Each bank will have its own risk appetite, and this will dictate how they manage their customers, be it a business or a charity. International charities can be a risky business for banks as they can and have been used to launder money to fund terrorist activities, evade taxes and used to hide personal wealth. International charities can be a risky business for banks as they can and have been used to launder money to fund terrorist activities, evade taxes and used to hide personal wealth. Banks design their systems to pick up the bad and money laundering – these systems are often sophisticated and based on artificial intelligence (AI) reflecting decades of banking transactional behavior. To ensure business and commercial conflicts are managed by banks, many banks have in recent years centralised their anti money laundering checks and related decision making. As a consequence, local bank managers and relationship managers no longer have a say or control like they had in the past. International money routes Another layer of complication for international charities is the international nature of bank transfers. In between the charity’s own bank and the bank receiving funds in another country, there are different intermediary banks subject to different regulatory regimes. Each banking side (i.e. sending and receiving) does not necessarily control the banks in between. International transfers are only made possible when the intermediary banks allow them. To understand this point, staying within your own country, we don’t need visa or custom and bag checks, however travelling outside the country, we are subject to all sorts of checks and regulations and depending on what passport you hold, your treatment will differ. This is also the case with international bank transfers, like roads and flight paths there are various international money transfer routes with different intermediary banks in between. Each route is subject to its own compliance regime, regulator and political sanction regime. It is in this context of money laundering risks, international charities can struggle to open a bank account, transfer money internationally or in extreme cases have their accounts closed (de-risked) with no recourse or remedy. I see this too often. In my opinion, this necessarily is not because of a personal, an anti-charity or an anti faith agenda by the banks. It’s often a simple matter of compliance to anti-money laundering rules set by regulators and political governments. Know Your Clients (KYC) Banks need to update their systems with KYC (Know Your Client) details and below are the three main questions that they need to answer for money coming in and going out the banks: Who is donating to the charity? Does the charity itself know and make checks to ensure this is not dirty money? Who is the money transferred to? Is the bank account receiving money owned and controlled by a locally registered charity that has the permission to receive the monies by the local government or regulator? The money that is being transferred to a country, project or beneficiary – are there any sanction implications? Once the money is in the banking system and transferred abroad, the bank becomes a facilitator, so they need to know and be satisfied that these questions can be answered. Many times, charities fail to understand the importance of these questions and often lack the policies, systems and processes that can help them answer the banking concerns. In the banking world, the banks do not wait for charities to develop their system, they expect them to have all the answers before any money is put into the banking system – Banks are businesses and take a business approach to due diligence and anti-money laundering checks. If the bank feels the charity business is more risk than benefit in commercial terms, then it will simply fail the transactions or de-risk the charity. Banks are not obliged to give their custom to charities. The impact of the pandemic – worst for charities The pandemic has had the effect of escalating the move to a cashless economy. Government Covid19 grants required businesses to have bank accounts, many small businesses did not. All this created a significant backlog in banks for business accounts. With staff shortages, working from home, closed bank branches and fewer staff, this all together has compounded the issue for charities specifically. Unfortunately, it seems the banks have put charities way down down in the priority order. What was cumbersome and difficult in normal times has become impossible after the pandemic and

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Let’s take a risk

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Things can go wrong in even the best-run organisations. That’s part of being human — our imperfections and limitations will always be there. But how we prepare for and respond to risk is what sets successful organisations apart. Why Risk Management Matters In today’s world, especially in the West, risk management has become a core tool for planning and good governance. The most successful organisations often have the most robust risk management in place. “Taking risks is not the issue – it’s how that risk is managed that helps keep organisations afloat.” Risks will always exist. Even the best planning can’t stop them from happening. But when risk is well-managed, organisations are in a much stronger position to handle the fallout. Good management of risks means the organisation is better placed to weather the storm when it comes. My Journey With Risk I trained in a Big 4 accountancy firm where I audited risk management across local government, housing, central government agencies, and education providers. Later, I moved to a FTSE giant as a senior internal auditor, reviewing risk registers across EMEA and leading workshops for large, complex operations – including the North Sea business. Now, in the charity sector, I help strengthen governance and share my professional experience. It’s encouraging to see many international NGOs (INGOs) recognising the need to manage risks – even if they are still behind other sectors. “INGOs try to punch above their weight when it comes to risk management – and that effort matters.”   Understanding Where Risks Come From A common issue I see is organisations misunderstanding what their relevant risks actually are. Many adopt academic or copy-paste approaches, turning risk identification into a box-ticking exercise. “Identifying risk becomes a tick box exercise, often ignoring the internal and external needs of organisations.” Risk registers often focus heavily on threats and weaknesses, ignoring the strengths and opportunities that come with being bold. Sometimes organisations need to be bold to succeed. This may require taking risks. Every organisation is different – shaped by its history, people, leadership, values, and external relationships. Risks should reflect that uniqueness. Managing the Risks – Properly Another pattern I see is the over-reliance on listed controls. Risk registers get filled with controls, but without assessing how effective those controls really are. This creates a dangerous illusion of safety. “Listing controls is not risk management – it can become a false sense of security.” Real risk management is hard work. It involves testing controls, identifying gaps, and taking meaningful action to improve. Effective risk management leads to more work, more investment, more focus – and more hunger to succeed. In the INGO sector, proper risk management isn’t just good practice. It can have real-world consequences for people on the ground. “Being able to manage risks can mean the difference between life and death, a full belly or an empty one.”   The Bigger Picture When risks are understood and managed properly, the funds raised by INGOs go further. Objectives are met more effectively. And the people who depend on these services are better supported. My work with INGOs continues because I believe that with better governance and stronger risk management, their impact can grow. “The difference good risk management makes isn’t just internal – it’s felt by the most vulnerable.”     Nasir Rafiq is a financial governance expert and the founding director of Dua Governance Chartered Accountants, specialising in the charity sector and internal audit.  

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