Governance and Organizational Structure

Abstract

One of the most important tasks for any trustee is to know about their own organisations legal and governance structure and make sure it is suitable for what the organisation was set up to do. The legal structure, and the governance arrangements it sets in place, are a vital part of making solid foundations and keeping an organisation safe and secure. It means that those who get involved in its work are protected, whether staff, volunteers, trustees or service users. It also means the wider community and society can see the basis on which it operates. It is not surprising that the National Occupational Standards for Trustees and Management Committee Members (available from www.ukworkforcehub.org.uk) point out that trustees need to know and understand the advantages, disadvantages and implications for trustees of the different types of legal structures for an organisation (Standards 2.a). The Standards also state that one of the competences that trustees need to have is a knowledge and understanding of their organisations governance structure and why it is appropriate to the organisation (Standards 2.d). The Governance Hubs experience and research suggest that many trustees and management committee members would like greater reassurance and access to practical information about legal structures and their implications. We have frequently been asked to suggest resources that will help in this area. This is why we asked Co-operativesUK to revise and update their Governance and Participation toolkit, and make it more easily available by producing a shorter single document version of the legal and governance proles contained in the toolkit. This text is the result. It presents the most widely used legal forms and governance models that organisations can use, together with other relevant information. It has been updated to include the newer forms now available: community interest companies (CIC) and charitable incorporated organisations (CIO). Many trustees and committee members will already be aware of the new CIC structure, and the CIO structure that will shortly be available as a result of the Charities Act 2006. Some organisations will already be considering whether to adopt this structure. The Charity Commission is developing guidance on this that will be available in due course. This brief guide to legal forms does not attempt to give comprehensive brieng on these or any other particular forms. Rather, it is an introduction to the range of structures available and the difference each makes to how governance is done. If your organisation needs to review or change its structure, either because it has grown or in order to take on new areas of work, this guide indicates directions and possibilities. It will also be useful to small associations who are just reaching the point where governance needs to be more formal and organized, or to those starting up new ventures. But whatever stage you have reached, if you plan to adopt or change a particular governance structure, the next step should include taking appropriate professional advice and ensuring you have read the relevant Charity Commission guidance, (if your organisation is, or will be, a charity). This guide is for organisations operating in England and Wales and does not cover arrangements in Scotland or Northern Ireland.