Accountability to key stakeholders

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The charity or non profit board is accountable for the organisation's performance. This is not just about the various legal duties of charities. Accountability is also about giving an account to those who have a stake in the organisation.

For a charity it is essential to understand the needs and wishes of its beneficiaries, as it is these that should shape its priorities, strategies and success measures. Taking time to understand beneficiaries should be a high priority for the board and a regular activity. The better the board understands those it seeks to serve the better its chances of success.

Feedback from beneficiaries

If you have staff they can help by bringing user feedback and research reports. But the board should not be passive. Seek out opportunities to hear the views of your beneficiaries. Don't limit yourself to those who already use your services, what about those who are not reaching? What can you do to reach them?

How you stay in touch with your beneficiaries will vary depending on the resources of your organisation and what it does. You can seek opportunities to meet users of your services or commission research. You may want to engage external consultants to get the views of your users.

The board needs to communicate and explain how it has used the organisation's resources for the benefit of its beneficiaries.

Beneficiaries on the board

Some organisations choose to enhance their accountability by ensuring that users are represented on the board. Sometimes they form the majority of the board.  User trustees can bring enormous benefits to the board: they can draw on their direct experience, and can enhance the credibility of your organisation with other stakeholders. 

Having users on your board does however raise particular issues that need to be carefully managed, notably the need to manage potential conflicts of interest.  Trustees who are also users of your organisation's services are potentially in a position of conflicting interests and should be mindful of the need to identify any conflicts. 

Other stakeholders

Important though they are, beneficiaries are not the only stakeholders in the organisation. The board needs to be aware of others such as regulators, funders, members, supporters, the general public, volunteers, staff and suppliers.

Understanding the stakeholders' needs

Understanding and finding the right balance between what different stakeholders need from the organisation is an important board role. Many problems that charities encounter come about because the organisation does not understand stakeholders needs, or fails to meet their expectations.  The better the organisation understands and responds to its stakeholders, the less likely it is to find itself under siege from disgruntled members, demotivated volunteers, or disillusioned donors. Good stakeholder relationships help an organisation build and maintain a strong reputation.

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