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Crisis Ethical Enterprise and Employment (3xE) Network

Getting Boards on Board:

Overcoming resistance in trustees to developing enterprise activities

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Getting Boards on Board

3xE Network: a social enterprise network for the homelessness sector

Ways to ‘Get the Board on board’
Get the proposal right! Often Board members of larger organisations will have limited knowledge and experience in setting up and running a social enterprise; they may also have lots of other issues to consider. It is therefore important to carefully consider your proposal and ensure that it contains the information necessary to make a decision on whether to pursue the idea further. When developing and delivering your proposal: • Look into who is on the Board – where does their expertise lie? What are their priorities? • Present your case as simply as possible. • Show that you have done your research and present all the options • Use examples and case studies of how comparable organisations have explored and developed enterprise activities. • Avoid too many impersonal statistics that people might find difficult to relate to. • Describe the financial and social benefits. • Demonstrate how your idea is solving a problem for the organisation. Use gentle persuasion It is human nature that we respond better to encouragement; remember you are all on the same side. Encourage discussion and give them the chance to come back to you with more questions. Give them space & time If people are making a decision that they feel is significant and entails significant risk, the more time that they can have to reflect upon it, and discuss it informally with each other, then the more comfortable they usually become with it. Therefore try and create space and time for the Board to consider enterprise development as a standalone issue, and not as part of a wider standing agenda.

The Ethical Enterprise and Employment (3xE) Network is run by Crisis to bring together organisations using social enterprise and supported employment models, and organisations working with unemployed people who are homeless or at risk. 3xE works in partnership with social enterprise infrastructure organisations throughout England to improve take up of their services by homeless sector social enterprises. 3xE also funds a variety of support services specially tailored to the needs of the homelessness sector to enable organisations to start and develop social enterprises or supported employment schemes. The network is funded by the Big Lottery Basis programme.

Introduction
This is the fifth in a series of info sheets that 3xE is producing to capture and disseminate the learning from the Network. It is designed to help guide network members that work within an organisation (e.g. housing association or voluntary sector organisation) and are looking to set up a social enterprise / trading arm. While many people are interested in developing social enterprises that could help to achieve their organisation’s mission and generate additional income, getting the support of the Board of Trustees can sometimes be a challenge. This info sheet identifies some common issues that might be contributing to a culture of risk aversion (and possibly fear) on the part of Trustees, and suggests ways in which you might be able to address and resolve their concerns to and get them behind your ideas.

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Would introducing a code of conduct help? During times of change, or when considering a shift in the way that the organsiation operates, it may be appropriate to develop a code of conduct for the board of trustees. This can prove to be a useful tool when reviewing the responsibilities of the Board and when considering options objectively. Many similar organisations will be using codes that would be suitable for your organisation. A lengthy process of developing a code of conduct from scratch can be avoided by adopting codes of conduct from organisations that have similar business and social aims. This can make it easier to share stories and best practice with other groups and organisations through having the shared framework that a code of conduct offers. Reach has developed a useful guide exploring how to develop and use a code of conduct for trustees (click her for a link to the document). 5 Questions to ask If a Board appears to be resistant to change (such as introducing enterprise activities), it can be useful to understand what might be causing this in order to address it. 1) Are the Board appropriately informed? Managing change and developing new approaches to business can make people feel anxious. Whilst some concerns may be valid it is important to focus on the details. Trustees need to be given clear information to show that you have carefully assessed the pros and cons, and that they have the opportunity to discuss this. In the instance of exploring the development of an enterprise, this might include a SWOT analysis of the organisation; a risk analysis of the business idea, options appraisals and presenting other (balanced) information on the implications of investing in a new business venture.

2) Are the right people on the Board? With the best will in the world Boards can become ineffective for a range of reasons, from over-commitment and burn out, to a lack of the knowledge, skills and expertise that are needed to help take the organisation in a new direction. Regular reviews of the make-up of the Board can be useful to ensure that you balance the need for continuity and fresh blood, and that together they have the skills and experience that are needed as your organisation develops. This is really important when an organsiation is looking to take on new ventures that may require a different skill-set within its Board. 3) Does the board have an appropriate skill-set? Gaps in your board’s skills can be addressed through recruiting new members. However, recruiting trustees can often prove difficult, especially when it is for a smaller organisation and from within disadvantaged communities. Actively developing your Board member’s skills and understanding of a sector can be a good alternative. Remember that Board members have a collective responsibility, so any development and support they receive should be similarly shared – this might take the form of training, attendance at conferences or inclusion of specific materials in their induction programme. 4) Are there contractual restrictions to consider? Grants, and some contracts, will sometimes impose restrictions upon organisations’ freedoms to engage in certain types of activity. You must make sure that you are aware of any limitations that are imposed on your organisation in order to understand how an enterprise can be developed. For example, it may be that a grant awarded to fund a project prohibits the

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Getting Boards on Board

organsiation from being able to charge anyone who benefits from it - which limits the potential to develop enterprise income; alternatively, a contract may restrict the ability to generate a surplus on services delivered which limits the organisations’ ability to invest in the future development of enterprise activities. 5) Does the Board fully understand their legal responsibilities? Trustees and Directors have a legal obligation to consider, the long term interests of the organisation; this may sometimes entail accepting short-term risks. Unless the Board fully understand and accept their responsibilities it could be difficult to convince them to consider a potentially ‘risky’ business approach. This can be overcome with effective training and guidance on governance and the legal responsibilities of the Board. It also helps if proposals are presented in a way that makes a clear link to the potential long term financial and social benefits that the social enterprise could bring, within the context of the organisation’s overall mission. This will help the board members see how the venture fits in with their priorities and responsibilities as a trustee.

Final thoughts
This info sheet serves to offer an introduction to some of the issues and solutions that Boards experience in considering developing enterprise activities (or other significant changes). It is not intended as a complete reference guide, but rather an introduction to the principle issues. A list of additional resources that explore these issues further are listed below:

FURTHER RESOURCES: 10 Dimensions that Shape Your Board – Vanderwall & Benavides, 2008 10 Questions to ask yourself and your board – New Philanthropy Capital, 2009 Managing in Tough Times – Social Enterprise Works, 2009 Reducing the Risks: a Guide to Trustee Liabilities – Governance Hub, 2006 Review and development of the Code of Good Governance: case studies Governance Hub & nfpsynergy, 2008 Tending Your Board: a seasonal guide to improving the way your Board works – Governance Hub & bassac, 2006 The Essential Trustee: What you need to know – Charity Commission, 2008 This info sheet draws upon national research, training materials and personal experiences of Adrian Ashton – a nationally acclaimed provider of advice, training and consultancy services in relation to Governance issues and enterprise development. (www.adrianashton.co.uk)

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Getting Boards on Board

3xE Network Crisis 66 Commercial Street London E1 6LT Tel 020 7426 8500 Email 3xE@crisis.org.uk www.crisis.org.uk/3xe
Registered Charity Numbers: E&W1082947, SC040094.