The question of control

Trustees often battle with this question with different answers and approaches. Often conflicts between trustees and management are underpinned by this predicament. Charities are set up by humans and run by humans. The mistake is made when the human factor is ignored. The answer to the question of control lies in how humans normally behave and respond.

When a child is born and throughout the toddler years, parents feed, clothe, hold their hands and constantly check on them. When the same child grows up, becomes an adult and starts university the approach of the parents changes. There is no need to directly feed, clothe or hold hands.

The parents approach changes to now ensuring enough money is in the bank account, direction is set, good university is secured with appropriate accommodation. The constant physical checks turn into keeping an eye on academic results, who the friends are and quality of work experience and references. Same child, same parents, same love but the whole approach changes.

If the approach does not change and the parents remain like they were when the child was a baby or teenager then relationships between parent and child risk becoming sour, challenged and damaged. Charities are the same. When they are set up, they need full attention and involvement of the Trustees, however when they grow large, the whole approach must change. When it does not, this results in relationship between trustees and management to suffer and eventually breakdown.

Like the parents learning from other parents before them, trustees must also learn and apply successful experiences of other trustees and charities. Below are some techniques that have always worked.

Reconciling bank statements to information held by the charity

This should never be underestimated. Tidying up book keeping, preparing good quality year end accounts and picking up fraud, all depends on it. This applies to Charites of all sizes and complexities. Banks are third party organisations and they hold information in a certain way reflecting the instructions from the charity trustees and / or management.

When the bank information is reconciled against information held by the charity which reflects how the charity is run, this has an effect of a third party check over charity finances. This is why a charity with good financial control will always have an effective bank reconciliation process. Trustees should concern themselves about it as it aids control.

Checks and balances on the CEO

A charity with a paid CEO / Manager suggests the charity has grown and requires a different approach. Hand holding by trustees and constant checks should no longer be the case. If this is the case then there is something wrong with either the trustees and / or the CEO. The following are five key checks and balances that have proven to work in larger charities:

1. A robust strategic plan and budget that sets out the framework for the CEO to operate within. Without it, a blind ends up leading a blind, creating issues of trust when difficult decisions need to be taken.

2. A CEO reporting and feedback protocol against the agreed strategy and budgets. The reporting skill of a CEO should be assessed at recruitment stage.

3. A competent legal and audit firm that regularly meets trustees and comments on Management decisions and plans. Trustees should make time for such professionals and should take their advice seriously no matter how difficult it may be to accept.

4. Fair and clear HR policies that dictate how human resource is managed with no trustee or management override. HR issues are often bubbling in the background, if not sorted with good policies and their application, then these bubble burst with ugly consequences.

5. An Audit Committee supported by a professional Internal Audit function. Its not enough to have independent members of the Audit Committee if it is not supported by an competent Internal Audit function.

The key message is that Trustees can remain the same in a charity but the approach must change as the charity grows and enters new challenges.


Author: Nasir Rafiq is a widely experienced Chartered Accountant and a Financial Governance Expert. He has directed large finance, HR, facilities and IT functions in charities. He is the founder and director of Dua Governance, a charity finance specialist accountancy and business advisory firm.


Preparing budgets for Trustees

During the 1980s, the Rambo movies were the ultimate action movies. The pinnacle scene in all these movies was when John Rambo prepared for war. The music in the background, the sound of Rambo stripping up his gear, loading guns, marking his face and then tying a red strip over his forehead prepared him for battle. Rambo had infinite bullets, bullet proof skin and luck always on his side, despite all this, he still had to prepare for battle and war. Preparing and planning is a key ingredient for taking on any challenge, mission or objective. Regardless of the size and reach of a charity, they too have to prepare and plan. The work of some charities is too important to fail. Unlike Rambo in movies, charities in real life rescue the vulnerable out of hunger, poverty, desperation and disadvantage. The budget process in a charity should represent preparing and planning process.

Trustees with no financial background often are put off by budget presentation and engagement. When this happens then it is not the trustees that have a weakness, it is the budget process itself that is flawed. I professionally grew up in KPMG UK working in the Government and Public Sector division. My work required reviewing how local councils of all sizes utilised their resources, part of this was to review their budget setting and monitoring processes. This gave me a unique insight of how elected councillors with no finance background engaged in this process – I saw where it went well and where it did not go as well. The charity sector has much to learn from local government. Simple communication is important

When appointing a CEO and the finance lead, the trustees should not only look for budget setting and monitoring skills, the presentation and communication skills are as important.

The CEO and more importantly the finance lead should be able to present finance information in a way that makes sense to the Trustees with no finance background. The role of finance is often misunderstood in charities and this often impacts the type of staff recruited in finance positions. The finance department is not just an accounting and cash transfer function. It has an important role to play in planning and strategy development. Strategy has to mean something


Trustees are often most engaged in strategy development. Strategies should be about how the organisation plans to run and achieve its objectives. This process should not be just a feel good marketing ploy that has no reference to underlying charity resources, ability, strengths and weaknesses. I see this too often. This is where the budget process starts to go wrong. Strategy setting and business setting become two different processes – the left hand does not talk to the right hand. The budget process becomes irrelevant to trustees with no finance background.


Budgets should be linked to strategy and trustees should be engaged to discuss the below.

  • Staff structure, ability and reward

  • IT and facilities infrastructure required to deliver strategy

  • Marketing strategy and plans

  • New markets and development considerations

  • Modus operandi

Trustees should endorse strategic objectives and budget framework in this context. Only then the budget becomes relevant to trustees with no financial background. The devil is in the detail

The finance and accounting profession is technical and regulated. To expect Trustees with no financial background to grasp this in a budget presentation is wrong.

The role of trustees is high level scrutiny and strategic direction – this is what should be expected of them. The details should be left for the employed finance professionals, Executive and those trustees that have a financial background. Trustees have a duty of care and thus should seek independent financial advice when required there is no requirement for trustees to form opinions based on their own lack of skills and understanding – The bigger the charity, this becomes a bigger problem.


In charities where this happens, this reminds me of Rambo and the reality of it. An actor that acts like an action hero when in real life he is not – This only works well and ends well in movies. Charity finance, accounting and budgets can be complex. Trustees need to ensure all the right bits are in the right places for it to work. Preparing is key – regardless of size, risk and complexity of charity.


Author: Nasir Rafiq is a widely experienced Chartered Accountant and a Financial Governance Expert. He has led and directed large finance function in large and complex charities. He is the founder and director of Dua Governance, a charity finance specialist accountancy and business advisory firm.

Governance – When it goes pear shaped

Dominic Cummings, the former senior strategy advisor to the then newly elected Prime Minster Boris Johnson was at the heart of government when the Covid 19 crisis folded and was privy to all that went on.

After being forced to leave government, he appeared before the MPs committee on 26 May 2021 to answer questions on how government responded to the Covid19 crisis, this was a fascinating and a shocking viewing.


This reminded me of issues I regularly experience in charity and business organisations.


I have never been a fan of the politics of Dominic Cummings but his fascinating insight and views on how the government machine worked really hit a nerve. He had many golden nuggets to share for those that understand the practicality of good governance in large and complex organisations. In crisis the cracks are all laid bare. 


In this blog, I will share some of these golden nuggets:


 1. The role of corporate planning


Yes, its important to have crisis management plans and risk registers. These should be regularly tested. A government can have all that in place at department level, however this is still not effective unless there is a central plan that brings it all together. 


In my line of work, often I see a silo working culture in large organisations. In this culture, staff in each department and division become inward looking and start to tick the box for their own sakes. They do not realise that when the organisation hits a crisis, it is not the department plans that matter anymore – the plan has to make sense in the context of corporate priorities and defense, led by the central leadership.


In my line of work, often I see a silo working culture in large organisations.


Organisations that often have an effective corporate strategy and plan backed by a corporate risk register are the ones that ensure work done at individual and department level is most effective for the wider organisation, its stakeholders and its beneficiaries.


There is no point of having a star performing individual or department, if it does not save the overall organisation from sinking.


There is no point of having a star performing individual or department, if it does not save the overall organisation from sinking.


2. Decision making in crisis


Cummings in his appearance talked about finger pointing of key roles and government departments at each other. He spoke about some great work and talent at junior levels that were being ignored. All this accumulated to a culture of chaos, as the government formulated a response to the pandemic.


In normal times, large and complex organisations can have conflicting priorities and policies between departments and official positions. However, in a crisis these can become a hurdle and hold back when there is culture of silo working.


The one strong leader needs to become the pilot taking over the reins while switching off the auto pilot.


It is at these times; the one strong leader needs to become the pilot taking over the reins while switching off the auto pilot. Those that have the titles may no longer be suitable anymore – others may need to be upgraded to speed up the decision making. Policies that governed the organisation in normal times, may now need to be flexed, removing red tape to create breathing space. All this is needed to respond to the crisis and to save the ship.



Consultation for decision making is good but it is a means to achieve a greater good not the end goal. Consultation should be meaningful in a crisis, not just for sake of it to please individual egos.


The leader and the wider executive may be appointed through a robust and fair recruitment process – these are for normal times. When the crisis hits the fan, the leader is expected to rise to the challenge taking difficult decisions and making most of the tools at his / her disposal. There is no time for hiding behind or blaming others.


An important consideration for those that appoint leaders and CEOs is this question: “Does this leader have the ability to steer the ship in a crisis”. Such focus can have an effect of changing the selection criteria and the value of the leader to the organisation.


The leader must be a leader for all times, not just for the happy times.


3. Data does not float in air


Having worked on data quality audits in the NHS and local government, I recognise the mechanism by which data is generated and checked. Data is not born from thin air, it requires fit for purpose systems, people and infrastructure.


The use of data for normal times can be different from its use in abnormal times. To make the data available in abnormal times, it is not always easy to train people, install systems and infrastructure at short notice – these changes require time and investment.


In my experience, organisations that invest in their IT and data infrastructure in good times are the ones that have readily available information to take the right decisions at the right time in a crisis as well as normal times.


Often organisation neglect the value of investing for the bad times and end up “stop” and “searching” for solutions during a crisis – this is the worst time for investing.


Often organisation neglect the value of investing for the bad times and end up “stop” and “searching” for solutions during a crisis – this is the worst time for investing.


A good leader needs to be able to “see” to navigate through the storm, using the tools at his / her disposal. This is only possible with advance planning and investing.


4. Be careful on who your advisor is


A strong leader will attract strong advisors. The leader will respect them and will know how and when to use their advice, maxmising their value to the whole organisation. Whereas weak leaders either disrespect their advisors and their advise or are led and controlled by them.


When the going gets tough, these advisors are not the ones taking responsibility for the decisions their leaders take. The buck will always stop with the leader. If a leader has to rely on the advisors to look good then the foundations are on shaky grounds.


If a leader has to rely on the advisors to look good then the foundations are on shaky grounds.


Leadership is about the grand plan, vision and strategy – the role of the advisor is to fill in the gaps on how this is best achieved.


If the leader lacks what it takes to lead than you can’t blame the advisor when it goes all wrong and the carpet is pulled under the feet when it was most needed.


Many lessons are to be learnt from this controversial advisor of a controversial Prime Minister during one of the most controversial times in British history.


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 financial governance matters.