I am currently working with a voluntary organisation which is facing an uncertain future (like many) because of the uncertainty of funding from health agencies and local authorities. This year it is likely to have to spend £10,000 of its reserves. I have advised that this is brought to the Board's attention and it is minuted that this situation is understood and agreed. My advice was for the worker to make recommendations but be clear that it is the Board making the decisions.
I have also suggested that he do a monthly cash-flow for next year to show the Board when the money runs out. His first attempt included in it money that they hoped to get. I suggested that this gave a much rosier picture than was the case and that the Board had to know when the balance of funds went under their reserves figure and when the balance figure became a negative number. If anything would spur me into action it would be knowing that we were running out of money. I hope that this has the desired impact on his Board and that at some point they grasp the urgency of the situation.
I was reminded of when I was brought in very late in the day to help a long-running local organisation to stave off closure. I asked the chief officer and the chair of the Board, 'How much does it cost to run this organisation every month?' Neither of them knew. The chair of the Board was then surprised to find out that all the reserves had been spent. I wondered at this point what management information was provided at Board meetings. A couple of months later the organisation closed not because they did bad work but because they had neglected the most basic of issues - how much money do we spend and how much money have we got coming in.
In neither instance are/were people knowingly being irresponsible but in reality that's what it is. To act responsibly you have to know what your responsibilities are and then you have to act. I have observed quite a few trustees over the years and there are a significant number who think that their work is done once the board meeting is over. In these times of financial uncertainty trustees more than ever really need to step up to the plate.