PM2 presentation from the 2013 NCVO / BWB Trustee Conference. Tess Woodcraft (chair), Communications Consultant, coaching comms and Vice Chair, Rationalist Association Siobhan Sheridan, Director of Human Resources, NSPCC Judith Miller, Accountant, Sayer Vincent Accountant Rosamund McCarthy, Partner, Bates Wells Braithwaite http://www.ncvo.org.uk/training-and-events/trustee-conference

1. PM2: Crisis and reputation
management
Tess Woodcraft, Chair: Communications consultant,
coaching comms and Vice Chair, Rationalist Association
Siobhan Sheridan, Director of Human Resources,
NSPCC
Judith Miller, Accountant, Sayer Vincent Accountant
Rosamund McCarthy, Partner, Bates Wells
Braithwaite

2. PM2: Crisis and
Reputation Management
Presentation by
Judith Miller, Partner, Sayer Vincent, Auditors and Advisors

3. Fraud
• Context – size and types
• How to
• prevent it
• detect it
• respond
• Guidance

4. Context - size
• £147m estimated total cost
• 9% respondents victims
• 70% external, 30% internal
• 47% payment/banking fraud
(Source: Annual Fraud Indicator 2013)

5. Context
• The sector is attractive
• Practice is evolving
• Internal or external
• Role of the trustee

6. Examples
• Misuse of the charity’s bank account
• Fraudulent card transaction
• Stealing or ‘skimming off’ money from cash collections
• Fake fundraising events and requests for donations
• Thefts from charity shops
• Fake invoices
• Charities set up for improper purposes
• Fraudulently obtain grants
• Fake letters - suppliers

7. How to prevent it
• Assess the risk
• Create the right culture
• Develop proportionate policies,
systems and controls

8. How to prevent it
• Anti-fraud policy
• Balanced framework of controls
• Review approach regularly

9. How to prevent it – framework
of controls
Preventative Detective
Objectives Direct controls
Planning processes Monitoring
Accountability Employee welfare and
management
Training, continuous learning
& competency framework
Independent review

10. How to detect it
• Robust controls
• Whistleblowing policy
• Warning signs
• In numbers
• In behaviours

11. How to spot it
• Unusual or unexplained items in accounting records &
reconciliations
• Missing documents or account books
• High numbers of cancelled cheques
• Common names regularly appearing as payees
• Duplicated payments/ cheques
• Payments for ‘round’ numbers to unknown recipients.
• Suppliers submitting electronic invoices in non-PDF
formats that can be altered
• Payments made to individuals/ companies with family or
business connections to trustees
• Reluctance by staff to accept assistance with finances
• Staff trying to delay work reviews or audits

12. How to respond
• Policies & plans
• Anti-fraud policy
• Whistleblowing policy
• Fraud response plan

13. How to respond
• Anti-fraud policy - What should it contain?
• What fraud & theft mean to the charity
• How the charity expects to deter fraud
• How it will react to actual frauds
• Key responsibilities of senior staff &
trustees
• Details of any whistleblowing plan
• How to respond to allegations of fraud, as
part of a Fraud Response Plan
• How the charity assesses exposure to
fraud risk

14. How to respond
• Reporting to
• The police
• Charity Commission

15. Guidance
• National Fraud Authority
• Action Fraud
• Fraud Advisory Panel
• CFG “Charity Fraud” guide
• Charities Internal Audit Network
• Charity Commission – CC8, Compliance toolkit chapter
3
• Sayer Vincent “made simple” guides – Risk
management
• Contact
• Judith Miller
• judith@sayervincent.co.uk
• 0207 841 6360

16. PM2: Crisis and
Reputation Management
Presentation by
Siobhan Sheridan, Director of Human Resources, NSPCC

17. Experiences
• Financial services
• Government
– Defra
– Department for Work and Pensions
– Home Office
• NSPCC - employee
• Crisis at Christmas - volunteer
• Build Africa - trustee

18. Keeping it Simple
Crisis about people and / or crisis involving
people
– Before a Crisis
– During a Crisis
– After a Crisis

19. Before a Crisis
• Practice – seriously
• Build big relationships
• Understand yourself
• Know your organisation
• Context is king

20. During a Crisis – Don’t
• Panic – easily said…
• Forget the day job
• Create further casualties
• Close out those who could help

21. During a Crisis - Do
• Walk in the corridors
• Focus on containment
• Communication is the crisis
• Clarity re stakeholder management
• Take decisions mindfully
• Manage confidentiality
• Maintain clear governance
• People are watching your leadership

22. After a Crisis
• Take time to review…with support
• Remember there may still be casualties
• Consider the impact on your
organisational culture going forward
• Reflect and learn

23. PM2: Crisis and
Reputation Management
Presentation by
Rosamund McCarthy, Partner, Bates Wells Braithwaite

24. • Governance/internal administration
– Board dispute e.g. about mission and vision
– Board and wider membership in conflict
– Board and Founding Body at loggerheads
– Unauthorised benefits
– Acting outside objects
What can cause a crisis?
• A triggering event - e.g. fraud, child protection,
terrorism, fire, flood, storm damage, which will
have governance implications

25. • Conduct of Board Members, CEO, Finance
Director, Chair, Patron – whether act or
omission relates to charity or another entity
What can cause a crisis?

26. Duties of Trustees
• Trustees must safeguard the good name,
assets, property and work of the Charity
• Trustees must asses and manage risk, which is
of utmost importance in a crisis

27. Crisis is a threat…
and an opportunity
Aim to:-
• Pull together and come out stronger
Don’t:-
• Use the crisis to settle old scores

28. Is the Charity’s constitution and are its policies
fit for purpose for a crisis?
• Short notice for urgent Board Meetings –
virtual/by email
• Quorum
• Majority decisions out of a Board Meeting
• Conflicts of interest
• Trustee Code of Conduct?
• Removal of Trustee and/or Members
Crisis and Constitution

29. Investigation by Trustees
(where necessary)
• Board to approve process for the
investigation
• Trustees may be allocated different roles
• Smaller group to oversee investigation
• Some Trustees sealed off to hear Appeal?
• Ultimately, responsibility for decision
making still lies with the Board as a whole

30. Reporting to the
Charity Commission
• Which incidents should a charity report?
• When should the report be made?
• How to make a report

31. WHICH?
Annual Return: A charity with an income over
£25,000 must, as part of the Annual Return, sign a
declaration that there are no serious incidents
General rule: Charity Commission advise that you
should make a report to the Charity Commission if
you have reasonable grounds to suspect a serious
incident
“serious incident”: any incident that has resulted
or could result in a significant loss of funds or a
significant risk to the charity’s property, work,
beneficiaries or reputation

32. Examples of
“serious incidents”
The Charity Commission suggests:
• Fraud and/or Theft
• Significant loss
• Significant donation from an unverified donor
• Known or suspected links to terrorism
• A disqualified person acting as a trustee
• Lack of safeguarding policy
• Abuse or mistreatment
• Criminal or regulatory investigation

33. Also…
• Incident reported to the police and/or other
statutory agency
• Charity or individuals subject to an
investigation by another agency
• You believe it is a serious incident
• Professional advisers advise you to report

34. Reports of serious incidents
2011 -2012
From Charities Back on Track 2011-2012

35. Concerns about charities identified
or reported from other sources
From Charities Back on Track 2011-2012

36. Please DO NOT Report….
• Disagreements with trustee decisions,
policies or strategies
• Complaint that the charity is delivering a
poor service
• Disputes in the way a contract is handled
• If there is no serious risk to the charity, its
assets or beneficiaries

37. WHEN?
General Rule: The Charity Commission say as soon
as possible* and, if very serious, immediately
• Allowances will be made for the trustees
gathering information and establishing facts
• Declaration on the annual return
*The legal obligation is to report a serious incident in the Annual Return.

38. HOW?
Include the following information:
• A summary of the circumstances and details
• How it was discovered
• If there’s a relevant policy/procedure and
whether it was followed
• What action has been taken to deal with the
incident
Send via email: rsi@charitycommission.gsi.gov.uk

39. Multiple incidents
The Charity Commission may accept periodic, rather
than individual reports
Different ways to report
Use of Information
The charity may forward the Charity
Commission a copy of a report to
another agency or an internal report
to the board.

40. Signposting
• Charity Commission – Reporting Serious
Incidents: guidance for trustees
• Charity Commission – Risk Framework
• Charity Commission – Application for Charity
Commission’s Risk Framework
Rosamund McCarthy
rmccarthy@bwbllp.com
0207 551 7819

41. PM2: Crisis and
Reputation Management
Presentation by
Tess Woodcraft, Chair: Communications consultant, Chair
of Rationalist Association

42. Media Management
in a Crisis

43. Protecting your
Reputation
• Prevention – this is where Board plays
major role
• ‘Cure’

44. Prevention 1:
Risk Assessment
• Risks to your reputation: What is your reputation based on?
– Brand values
– What is your organisation’s credibility based on?
– Key strengths: the 4 pillars of your reputation?
– What do you uniquely contribute to your stakeholders?
• Where are you most vulnerable? What might go wrong?
• People
• Places
• Services
• External factors
• Buildings
• Activities
• Money

45. When a crisis strikes –
what is a journalist
looking for?
• Reckless disregard of safety: Your failure to protect the public, eg. failure
to put in place health and safety procedures
• Lack of investment leading to accidents or poor performance
• Negligence: eg. Your failure to check the suitability or training of your
operatives (eg. child abuse checks)
• Complacency: eg. failure to investigate or act on past allegations
• Bad management: Your failure to recognise a problem as a problem
• Arrogance (nb. Schadenfreude; the big machine against the little guy)
• Bureaucracy and red tape leading to failure
• Dishonesty
• Sexual impropriety
• Controversy
• Hypocrisy

46. Prevention 2:
Risk Management
Systems to put in Place
• Information: Ensure you have the information you need, and
all key people are familiar with it. EG regulatory guidance,
company procedures, risk analysis reports, signposts to other
data.
• Relationships: establish links external stakeholders and
agencies involved in your highest risk areas (eg. police, fire
service, local authority, health authority, regulator.)
• Internal communication: Ensure staff understand the
importance of quality and the dangers inherent in risks, and
that they know how to act if a crisis occurs.

47. Prevention 3:
Planning ahead
• Appoint a Crisis Team
• key people
• clear roles
• train them
• Keep up-to-date names, contact numbers, etc. for the team
• Procedures and information needed by crisis team
• Process for initiating a meeting
• Chart with flow of information (who should be kept in the loop?)
• Up-to-date press lists
• List of key stakeholders and agencies and contact details
• List of basic questions they will need to answer
– Where did it happen
– When
– Why
– Who is involved
– What are you doing about it?

48. If a Crisis Hits......
• Don’t make statement until you have facts
• Call together crisis team
• Get information
• Decide ‘line’
• 1 spokesperson (until it becomes clear you have to
move up a gear)

49. In a Crisis –
put a CAP on it!
• C Concern 50%
• A Action taken 40%
• P Perspective (your excuses) 10%