This report on governance provides a framework for thinking about how policy makers, funders,regulators and advisers can all work with Board members and staff to enhance the effectiveness of nonprofit organisations. It was commissioned by the Active Community Unit (ACU) of the Home Office, in parallel with other reviews designed to improve the capacity of the voluntary and community sector, at a time when the sector plays an increasingly important role in the delivery of services using public funds. That role has recently been investigated in two Government reports, the Cross Cutting Review carried out by the Treasury, and the Strategy Unit review of charities and nonprofits. Our report proposes actions of three types: some that can be taken immediately, some that require further discussion with key interests, and some integration with the other ACU reviews. Taken together they provide the starting point for an evolving strategy to improve governance across the sector. We recommend ACU chairs a group charged with the responsibility for planning and implementing this. Our focus is on governance as 'the systems and processes concerned with ensuring the overall direction, supervision and accountability of an organisation'. This is often taken to mean the way that a Board, management committee or other governing body steers the overall development of an organisation, where day-to-day management is in the hands of staff or volunteers. Sometimes, of course, the committee and volunteers are the same. They – like all governing bodies – have to balance the interests of the organisation and those they are trying to serve, while being conscious of financial and legal responsibilities, and the requirements of funders and other supporters
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