In the current charity landscape, financial resilience and compliance pressures often dominate the headlines. Yet one of the most critical (and frequently underestimated) risks facing many charities today lies closer to home: people. My blog on recruiting trustees earlier this year recognised this when it looked at how charities can build stronger, more inclusive boards.
Charities rely heavily on the commitment and capability of their trustees, senior leaders, staff and volunteers. However, many organisations are struggling to attract and retain individuals with the right mix of financial, governance, digital and strategic skills. At the same time, experienced trustees are stepping down, and stretched finance teams are being asked to do more with less.
The growing risk
The Charity Commission and audit firms have both highlighted trustee succession and skills shortages as a top governance risk. When key people leave or when boards lack critical expertise, the organisation can quickly lose control over decision-making, compliance and strategy. This is particularly evident in:
- Financial oversight: Inadequate financial literacy at board level can lead to poor budgetary control, weak reserves management or late filing of accounts.
- Internal controls: A small or inexperienced finance team increases the risk of error, fraud or missed regulatory deadlines.
- Strategic direction: Without diverse skills and fresh perspectives, boards can become static, missing opportunities for innovation or partnership.
- Regulatory compliance: A lack of governance or safeguarding knowledge can expose charities to reputational or legal risks.
Why it matters now
The environment in which charities operate is more complex than ever, with new reporting requirements, cyber threats and funding pressures. Trustees and staff need not only commitment to the cause but also competence in governance, finance and digital strategy.
What charities can do
- Plan ahead for trustee succession: identify skill gaps early and recruit strategically
- Invest in training: ensure trustees and senior leaders understand charity finance, risk and compliance obligations
- Review board composition: diversity of experience, age and background brings resilience and challenge
- Support your finance and operations teams: ensure workloads and systems are sustainable
- Consider mentoring or advisory support: external advisers can temporarily bridge skill gaps while capacity builds internally.
Final thought
Strong governance begins with strong people. Trustees and staff are the backbone of a charity’s success - but without deliberate investment in skills, succession and support, even the most financially stable organisation can falter.
Now is the time for charities to prioritise people resilience alongside financial resilience.
The next step
If you require any advice regarding the above, please get in touch with Allan Hickie or your usual UHY charity adviser.
