The Governance Assessment Process
The Governance Assessment Process (GAP) is a cross-sector standard for monitoring the governance of third sector organisations validated by the Governance Forum. The process is regularly reviewed by the Council of the Governance Forum to ensure that it meets the requirements for compliance with relevant legislation, and they endorse the process. The GAP review and diagnostic assessment is suitable for all public and third sector organisations.
The process starts with a review and comprehensive diagnostic assessment of an organisation’s governance arrangements, focusing on the areas of the board’s resources, competency and execution. It also involves a high-level audit to determine whether essential documents exist and have been externally verified. A Governance Development Plan is then created which provides a list of priorities for action to ensure the continuous development and maintenance of the governance function. Following this stage, organisations are required to make a pledge to developing the board and associated governance systems.
At the completion of process a validated certificate is awarded to participating organisations with the opportunity to benefit from independent advice. During the GAP the organisation would have been supported in carrying out a self-assessment of their current level of governance compliance. A full external governance audit can be carried out at a later date, if required, to provide evidence of compliance to a funder, regulator or other third party.
- The GAP is a diagnostic driven process which will help organisations to clearly identify where they are and where they need to get in order to achieve good governance.
- As all organisations in the third sector work within a regulatory framework, the GAP will help to ensure they are complying with best practice and legislation whether the regulating body is the Charity Commission, the Tenant Services Authority, the Arts Council or their Local Authority.
- The competitive environment is such that the key differentiators are explicitly important and good governance is a pre-requisite for many funders.
- By taking part in the diagnostic process, the participating organisation will be able to benchmark themselves against other organisations that have completed the assessment.
The Governance Assessment Process will:
- Provide evidence of compliance with the highest of governance standards
- Improve the profile and reputation of the organisation
- Improve the quality of decision making, monitoring and control
- Provide an independent assessment of governance against a national standard
- Provide a clear, practical improvement plan
- Provide an opportunity to be part of a national benchmarking exercise
In order for a board to govern well, the following must be in place:
- Resources: Clarity of structures, processes and tools to ensure the board can organise itself effectively to discharge its functions.
- Competency: The collective board should have the right range of skills and experience to set the strategic direction and uphold values and objectives.
- Execution: the ability to ensure execution of the board’s strategy in a co-ordinated way. Making sure the required efficiencies and performance targets are achieved and the board is open, responsive and accountable.
The Governance Diagnostic Assessment is divided into three assessment levels of governance. These are the three key areas of governance which have been determined by the Governance Forum as essential for any organisation seeking to demonstrate effectiveness in this area. They are:
Level 1 – Compliance
This level has been designed to ensure the organisation is able to demonstrate legal and statutory compliance where applicable.-
Level 2 – Standard
The second level demonstrates that the organisation is being governed well, working above statutory requirements and that the governance tools and resources are an integral part of the planning processes of the organisation.
Level 3 – Enhanced
The highest and final level demonstrates that governance is more than compliance and the organisation is seeking to maximise its performance through the efficiency and the effectiveness of protocol, procedures and practice.
The Governance Diagnostic Assessment is a tool which enables the creation of a comprehensive development plan for the client organisation.
The assessment has been developed drawing upon extensive research in the field of UK governance across the third sector. The principles of corporate governance have been applied to third sector organisations, incorporating the unique characteristics and regulatory requirements for such organisations. The tool has been endorsed by:
- Birmingham City Council who were recipients of a specific programme of governance for faith based organisations
- The Tenant Services Authority – the independent regulator for affordable housing in England.
- Birmingham City University who were involved in consultations in developing the Governance Diagnostic Assessment questionnaire
- Sir Adrian Cadbury, (The Cadbury Code) who has reviewed and endorsed the process
We ask organisations that have undergone an assessment to sign a pledge. The pledge certificate states that the organisation’s board is accountable, transparent and open and will adhere to a set of governance protocols to ensure high standards of governance are maintained.
The pledge is an outward show of commitment by the organisation to achieving or maintaining a high standard in governance. The organisation may choose to display the pledge for public viewing as a testament to their commitment to excellence and to bolster public confidence in the organisations services.
To date, over 50 Governance Forum backed diagnostic assessments have been carried out with organisations in the third sector, ranging from large national charities, housing associations and social enterprises to local schools, trusts and foundations. The Governance Diagnostic Assessment tool is able to produce a set of statistics which can help to identify how well the organisation is performing. Participating organisations are also able to benchmark their performance against an industry standard as determined by the Governance Forum.
These statistics are fed into a national benchmarking exercise currently being carried out for organisations in the third sector.
The Governance Development Plan (GDP) is produced after the initial consultation and completion of the Governance Diagnostic Assessment. Having answered the comprehensive list of questions identified to establish gaps in governance it is then possible to produce the Governance Development Plan outlining all the areas for development in governance by the client organisation.
Once the organisation has completed the process and the board have approved the action plan, a GAP certificate is awarded. The award carries the Governance Forum’s kite mark which has been developed to offer organisations the opportunity to demonstrate best practice in governance, quality and reduced risk to its stakeholders.
The kite marked certificate awarded is evidence that the organisation has gone through a rigorous process of assessment and has met the required standards of governance.
The Council is the governing body for the endorsement, monitoring and development of the governance assessment process. It is an independent body and its members have a wealth of experience in Governance gained through many years in the most senior positions. A full list of members for the current Council , can be forwarded on request.
The role of the Council is as follows:
- To maintain the integrity, quality and relevance of the governance assessment process
- To provide guidance in technical, legal and regulatory issues in relation to the Governance Assessment Process
- To advise the governance forum on the content and development of any publications. In regards to the governance assessment process.
The Governance Forum has developed a formal licence agreement which grants the licensee permission to carry out the Governance Assessment Process (GAP) In order to protect the integrity and credibility of the GAP the Governance Forum has set in place a number of measures to try to ensure that suitably qualified individuals deliver the process.
A licensed assessor will have the right to deliver the Governance Assessment Process to clients that they have attracted or who have been provided by The Governance Forum. The Governance Forum licensed status means that the assessor has demonstrated a commitment to providing a high quality of consultancy to support organisations wishing to carry out a governance review. This is evidenced by the fact that (s)he has completed three days of training provided by The Governance Forum.
The resultant Governance Development Plan will be authenticated by a unique code issued by The Governance Forum. The code demonstrates that there has been a client evaluation process and all the relevant forms have been completed to ensure that the diagnostic results can be included in the benchmarking programme.
The governance forum has developed a robust procedure of diagnostic assessment, planning and actions. Organisations that follow this process will benefit from its comprehensive and practical applications.”
Sir Adrian Cadbury – Cadbury Code
The forum’s diagnostic process and its experience of working with a range of agencies should offer both the methodology and the understanding to provide a clear analysis of an organisation’s performance.”
Roger De La Mare, Assistant Director Risk and Assurance – Tenant Services Authority
This process of assessment is both thorough and unique in its three tier approach. It seems well researched, meeting the requirements of key regulatory bodies. Organisations will receive practical benefits from going through a process such as this which can protect them from the potential pitfalls of poor governance and help to improve overall performance.”
Dr Mirza Ahmad, Corporate Director of Governance - Birmingham City Council
The social housing sector is very diverse and each board is at a different stage in its development, with different aspirations for the future. This comprehensive and transparent diagnostic process, identifies priorities for governance improvement in a realistic and focused way.”
Patricia McCabe, Managing Director - Central Consultancy and Training
The effective application of the diagnostic assessment process would represent an effective means of self-assessment in relation to meeting new TSA Standards and governance in the social Housing Sector.”
Professor Robin Pritchard, Head of the Centre for Internal Audit, Risk Management and Governance - Birmingham City University
BVSC sees excellence in governance as essential to the successful work of any organisation in the third sector. We have recently evaluated the Governance Assessment Process (GAP) by applying it ourselves, and found it extremely beneficial. The GAP provides a reliable means by which the trustees of voluntary and community organisations can benchmark the effectiveness of all aspects of their governance. The process can provide confidence in the strength of existing governance arrangements and give practical suggestions for improvements where gaps have been identified. It will be of great benefit to any organisation wishing to convey strong evidence of compliance with the highest governance standards.”
Brian Carr, CEO, Birmingham Voluntary Service Council
The process was so easy to use. I think it has great potential for organisations of all size, whether they have governance experts or not in their team, as the assessment is based on what you currently have/do and helps you identify areas to develop and enhance your governance arrangements. It’s a very good health check process, to ensure that your organisation’s governance is in working order”
Jules Mason, Interim Director of Strategy/Head of Governance Support - British Red Cross
I have just read the diagnostic report produced by the Governance Forum as part of the governance assessment process: the implementation plan is excellent – exactly what we needed. I think this will help us to focus our efforts on the gaps identified under the initial assessment and enable the board to build on the high standards of governance that we are already demonstrating as an Association; this will bode well with the TSA; the audit commission and other principal stakeholders. Thank you for a job well done”
Mike Bent, Board Member - Nottingham Community Housing Association
The governance programme developed by the governance forum was straight forward and easy to implement for the organisations that they worked with. The self-assessment diagnostic is a comprehensive and unique governance tool. It successfully helped focus the attention and support of our pilot organisations by developing a realistic and practical plan of action.”
Dr Mashuq Ally, Head of Equalities - Birmingham City Council
Sense is a large charity and it is important for us to have effective governance arrangements. We have recently undertaken a detailed governance review and found the diagnostic assessment to be a very useful tool in this process. It offers a comprehensive framework for analysis and the resultant action plan gave us a clear way forward. We would recommend this process to any charity that wants to check their existing level of governance or identify areas for improvement.
Jacqui Penalver, Company Secretary - Sense
This programme was a real opportunity to revisit our governance arrangements to develop our Board, our leadership and become even more effective in the services that we deliver.
Locksley Brown, Chief Executive - Zone Housing and Resettlement
This entire process of diagnosis, action planning and support in implementation has fast tracked and focused the organisation’s governance development over the past two years. We have been provided monitoring tools that have proved paramount in the successful management of the overall process.
Llewellyn Graham, Chief Executive - Nehemiah United Churches Housing Association
We found the diagnostic process to be clear and logical and it gave us the ability to drill down into the parts that are really important. Although the process was essential the quality of conversation derived from the questioning was where we benefited and helped us to focus.
Linda Gregory, Chief Executive - University of the First Age
The governance diagnostic process has made me think about how we manage this organisation. We have learned that we have a competent board, but we could improve on the system and how it manages itself, it has been a cooperative and effective process.
Gill Coffin, Chair – St Paul’s Community Trust
This is a really effective exercise to go through to properly benchmark where governance is in your organisation. A lot of organisations think they are more advanced with their governance arrangements than they are and this process helps you to check against a pre-determined framework and pick up any gaps.
Jonathan Driffill, Chief Executive - Friendship Care and Housing
The approach taken by Central Consultancy & Training, on behalf of the Governance Forum has assisted us greatly not only by identifying key areas for improvement but also by raising members’ awareness of good governance and generating enthusiasm for a Board development programme.
Walis George, Chief Executive - Cymdeithas Tai Eryri