The Charizone Framework contains 27 key performance indicators (KPIs) across our three domains of Impact, Governance and Finance. The indicators are carefully chosen to give an objective assessment of a charities' performance and how well it is set up to achieve its goals.
One indicator we look at is to ask: how many people govern the charity? The Charity Governance Code for large and small charities outlines recommended practice for board effectiveness. One recommendation they make is that:
"The board is big enough that the charity’s work can be carried out and changes to the board’s composition can be managed without too much disruption. A board of at least five but no more than twelve trustees is typically considered good practice."
The Charizone framework takes this recommendation as a baseline. We assign a score based on the number of trustees a charity has. A charity with between 5-12 trustees is given a Positive score. A charity with 3-4 or 13-15 trustees gets a Moderate score, and where a charity has less than 3 or more than 15 trustees their score is Low.
For some of our KPIs we need to manually assess the charities' published documents, such as the annual report or its website. But for others, like this one, we can use data available on the charity sector to automatically generate scores.
But even for automatically scored KPIs like this one, we still use an "apply or explain" approach. If the charity has a good reason for having a board size outside the recommended bounds, and explains its reasoning in the annual report or website, then we'll adjust the score to reflect this.
Because this KPI can be scored automatically also means we can use the data to look at how performance on this indicator across the whole sector, not just for those charities we've assessed directly.
Our analysis shows that 46% of charities have the optimum board size of between 5 and 12 trustees. Half of charities have less than 5 trustees, with 4% having 13 or more.
As you might expect, these figures vary greatly depending on the size of organisation. Smaller charities (as measured by their latest annual income) are much more likely to have fewer trustees. For charities with between £500k and £10m income, around 2/3rds have the recommended number of trustees.
Of course the number of trustees doesn't directly measure the "good" a charity does - it is just a proxy. But we can see some evidence that the number of trustees does have an impact on other indicators in the framework.
For example, we can see which charities have submitted their accounts on time, and compare it to the number of trustees they have.
Looking a charities with a positive score (between 5-12 trustees), 80% of this group returned their latest accounts on time, compared to 70% of those with a moderate and 65% of low scoring charities.
This correlation doesn't automatically mean that optimum board sizes cause better reporting, though. The relationship is stronger for smaller charities, suggesting that charity size plays a part in both. But a smaller relationship between board size and meeting submission deadlines does exist for larger charities too.
Get in touch with the Charizone team here. We endeavour to respond within 48 hours.
