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February 26th, 2021UncategorizedGeoffrey Hand 0 Comments

Congratulations to the Kids Company charity trustees for fighting off the High Court Director Disqualification proceedings . Congratulations also to its charity CEO Camila Batmanghelidjh who faced similar criticism. But isn’t finding out what went wrong with Kids Company’s charity governance more important?

The court case

The court case was all about the honesty and competence of the Kids Company charity trustees and whether the public should be protected from them in future. So their personal fitness to hold office was in question. It was not about the charity governance of Kids Company.

The high-profile Kids Company charity had become insolvent and closed in a blaze of adverse publicity in August 2015.  Something must have gone amiss for this to have happened. Then the Official Receiver’s investigation took almost two years before the Disqualification proceedings began. Investigation of Kids Company’s charity governance had to take second place.

A digression

The Kids Company charity trustees could have faced a minimum two-year disqualification from company management. But the judge threw the case out. She said “most charities would be delighted to have as trustees people with the abilities, experience and integrity that the trustees in this case possess”. So, from a charity governance perspective,  the Director Disqualification proceedings have largely been an expensive and time-consuming digression.

A tribute to Charity Trustees

As a former Kids Company volunteer myself, I can say with authority that its collapse was a tragedy for the the hundreds of deprived inner-city youngsters the charity supported. Trustees of charities such as Kids Company and many others like them take on a huge burden of responsibility – people’s lives in their hands.

The lawyers for the Kids Company charity trustees rightly commented about the Disqualification Proceedings:

“Dedicated service by charity trustees must never again be repaid by such gross injustice.  We hope that this victory will ease anxiety in the charity sector and that good people will  not be deterred from serving as charity trustees.”

The real business – charity governance.

The real issue has always been “what went wrong at Kids Company”. Promptly in August 2015, as soon as Kids Company folded, the Charity Commission opened an inquiry to answer precisely that question. But the Director Disqualification proceedings took precedence. The Charity Commission inquiry was put on hold until the Disqualification case was over – almost six years later, on 12th February 2021.

So now at last the Charity Commission inquiry is resuming. It will address “concerns about the administration, governance and financial management of the charity” and “will identify the wider lessons for other charities and trustees”. Precisely what should have happened six years ago.

Important Lessons

Happily, the Kids Company charity trustees will be comforted to know they will remain in the clear. The Charity Commission has already confirmed “there will be no regulatory action against any of the charity trustees”.

But it is most unlikely that those charity trustees will entirely escape criticism. A charity of the size and prominence of Kids Company does not suddenly collapse into insolvency without some failure of governance and financial management. The wreckage of Kids Company is now – at last –  open to proper scrutiny, no doubt with important lessons to be learned

I’m here to help

If you are concerned about any aspect of your own charity’s governance or financial administration, do not stay silent and hope for the best.  Excellence in charity governance is my business.

I have been there before, and would be happy to help you out

Image by manseok Kim from Pixabay

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Geoffrey Hand

Geoffrey Hand is a charity governance consultant, offering governance consultancy and training. He also provides legal services management, helping charities get better value for money from their lawyers. Geoffrey has extensive experience in the charity and legal worlds, and his mission is to help charities deliver good governance.

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