Mazars logo Mazars logo Mazars logo Mazars UK Blog

What are the broader lessons of the collapse of Kids Company?

A great deal has been said and written about the failure of Kids Company, including a very negative documentary on prime-time television. What can we learn about the failing of a vibrant and passionate organisation, working with young people in the most challenging and vulnerable circumstances?

The Charity Commission has opened a statutory inquiry into the charity’s affairs. The influential House of Commons Public Administration and Constitutional Affairs Committee (PACAC) has published a critical report of the charity’s failings, see the link below.  The report is critical of trustees, auditors, inspectors, regulators and government.  The heaviest criticism is of the performance of the trustees.

Not surprisingly, the PACAC report calls for greater regulation of charities, with increased powers and resources for the Charity Commission, as the regulator of the sector in England and Wales.  The report also calls for statutory regulation of charities which have safeguarding responsibilities for children and vulnerable adults.

The report recognises that greater regulation is not the full answer and also calls for improved governance of charities.  

But what does better governance look like?  

A high-performing board must ask itself, and answer, some tough questions in order to lead and support a high-achieving, sustainable and accountable charity.  

Thinking about the culture and values of the organisation is a good starting point.  How do the trustees perform both individually and as a team and in their oversight of, and engagement with, the senior management team?  Have the trustees relevant knowledge and experience of the activities undertaken by the charity and how do they know this?  How do the trustees balance the values of the charity with the need to deliver financial value for the short and long term?

How do the trustees and senior management team set the charity’s vision and mission, in consultation with stakeholders?  How is the strategy and business plan developed to deliver the mission? Is the business plan sustainable and how is it monitored?  Is the charity innovative in delivering its work?  How are risks identified, managed and reported, including reputational risk to the charity and to public trust and confidence in the charity sector generally?  Does the organisation understand and communicate its outputs, outcomes and impact and its benefit for those it works with and for wider society?

For me, the key focus post the Kids Company collapse should be on better governance of charities, alongside greater regulation.  To paraphrase Peter Drucker, governance eats regulation for breakfast.

The link to the PACAC report is: