ARC minutes 2017-12-05

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ARC Meeting Notes, 5th December 2017 at Europoint, 5-11 Lavington Street

Attendees

Carol Campbell, Greyham Dawes, Jordan Landes, Lucy Crompton-Reid, Davina Johnson, Katie Crampton, Megan Griffith Gray, Susan Williams

Apologies

Alastair McCapra, Kate West

Notes of previous meeting and matters arising

The notes of the last meeting were agreed. Lucy to talk to the outcome of her email to former donors under AOB.

Quarter 3 QFMR, Year-end projections and commentary

Our overall position is a small deficit, but ahead of the budgeted deficit of £12,000. There is a major shortfall of our fundraising target. There has been overspend in current year on rent, but this is due to the move. There will be more leeway next year. There is an underspend in admin and fundraising. Donations have been overforcast. Major donors are at only a third of our target. We are doing well for gifts in kind, many of these are from Wikimedians in residence. We’re doing well getting donors to sign up for gift aid. When we forecast the budget in the new year, we budgeted on costs not on staff time. The £25000 underspend is because our partners found funding from other sources. We have massively reduced our attrition rates with more contact to donors. The foundation has granted the full grant we requested, but Lucy needs to strengthen message to the board that we should continue to look for alternative means of fundraising. Davina to include gifts in kind in the profit. Greyham noted this is a reassuring report for Q3.

Draft budget 2017/2018

We haven’t changed the budget from what was submitted to the Foundation as this year we have not had to find areas to cut following the FDC recommendation. Lucy is going on maternity leave and Davina is on leave next year, which will impact the budget; however to what extent will be determined by the board’s decisions about cover. We haven’t yet done the traffic light exercise on expenditure but will include this in the final version of the budget for approval at the March meeting. Lucy clarified that almost all of the direct fundraising costs are processing, i.e. Smart Debit. We will be looking at detailed staff budgeting in January, which Greyham emphasised was key to the board being able to make a decision on the budget in March. Action for Davina to separate Gifts in Kind from other fundraising.

Finance Policy

The draft updated Finance Policy was circulated to everyone before the meeting. Lucy noted that Greyham has come back with some minor changes and clarifications which will be incorporated into the version that goes out for community consultation; and that the policy would be going to the March board meeting for consideration and approval. Davina and Rich are also writing a document on Financial Procedures which will reflect our current good practices, for approval by ARC (not the full board). Greyham stressed the importance of checking the procedures with the auditors which Davina will do - and also mentioned how important these are for the annual review of financial controls now required by the Charity Commission. Davina is aiming to get the procedures completed by the end of this week.

Risk Register

Lucy reminded the committee that the risk register is discussed in full once every three meetings, with the Major Risk Register reviewed on a quarterly basis. She highlighted the risks where there has been a change to the overall rating since the last review (either up or down), as follows: SG1 - the risk of loss of trustee experience leading to an ineffective board. This is a risk as Carol and Greyham are stepping down in 2018. Given our lack of success in recruiting during 2017, this should be elevated to 3.5. Action for Lucy to send Greyham the updated combined role description for ARC Chair and Treasurer (which has already been seen by Josie and Carol). SG5 - lower number of members leading to a governance risk, which has been downgraded from red to amber because of the increase in membership numbers. SG6 - increased membership figures not matched by increased AGM turnout resulting in inquorate meeting(s) and inability to make decisions. This led to a lengthy discussion on the mitigating factors and there was some disagreement from members of ARC to the proposal from GovCom to reduce quorom from 10% to 5%, as it was felt this could alienate the community. Greyham stressed that it’s up to the board to manage the AGM, and need to make sure both in person attendance is high and that enough proxy votes are submitted to ensure quoracy. ARC agreed with the idea raised at GovCom to have a keynote speaker(s) for the AGM to draw a wider audience of membership. There was generally some concern about increasing membership numbers to 1000 and even further. Another option for the future is to have voting and non-voting members; however this would not resolve the governance risk. Lucy mentioned that Germany does something similar, however they have very high numbers of members of both types, and struggle to attract members to their AGM. We also need to consider our current capacity to manage a much higher number of members. It was agreed that there needs to be some serious consideration of the different risks involved in membership, and that Lucy would present a paper to the board on this in December 2018. ARC requested that the likelihood element of the risk be lowered from 4 to 3.5; however it was felt that the overall risk rating should be high enough to ensure that it comes to the consideration of the full board. F2 - reduction in our Annual Plan Grant due to changing strategic priorities of the Foundation or decreased revenue, has been decreased as a risk. This was agreed. F3 - a substantial loss of donor income as a result of damage to the charity’s public profile caused by an unforeseen wider movement crisis, has been decreased as crisis not seen as threat to donations. This was agreed. L1 - charity fails to keep abreast of changes in legislation and breaches GDPR (a new risk). Lucy talked through the mitigating factors and it was agreed that the impact rating should be reduced from 5 to 4. O1 - departure of key staff and loss of operational knowledge, expertise and relationships. A risk as two thirds of senior management are going on leave in 2018. Lucy will be presenting a paper on the options for cover at the board meeting. O3 - lack of the expected number of engaged, active and skilled volunteers based across the country. This has been downgraded from a red to amber risk in consultation with programmes team. O6 - Lack of effective internal communications and knowledge management, is linked with the risk of alienating the community with change of management rules.

Proposals for senior staff cover

Lucy has written a paper for the board which she talked through, highlighting the different potential options in terms of cover for her and Davina’s leave next year. Her preferred option is for a part time interim Chief Executive to cover key duties for both herself and Davina for the initial period of cover, and then just Lucy once Davina has returned from work. As part of this proposal, Lucy would work 10 Keeping in Touch days during this time, using them to plan and attend the away day, start developing the new long term strategy, and lead on our next funding application to the Foundation. Another key element is that Daria would take on some additional responsibilities, and Rich would work an additional day a week during Davina’s absence. There are other potential models for cover outlined in the paper however ARC were broadly in favour of the approach outlined above.

Petty cash

A shortfall in petty cash of £167 has been reported (in line with our procedures) to the Chair of ARC and to the Auditors. This is likely have occurred during staff changes and the office move. To stop the problem recurring and reflect usual practice we are no longer keeping a cash float in the office. Most staff now pay for (and reclaim via expenses) small items such as milk and coffee, and any larger expenditure goes on one of the company cards.

AOB

Davina had a meeting with Kingston Smith for the audit, which will take place during the week beginning 5th March. The auditors would like to see a draft of the trustee report however it was felt by the committee that only an outline report would be available at that stage. We need to agree whether we can claim FRS102 Section 1A, which Greyham things we can but Angali says we can’t. Angali (the partner from Kingston Smith( will come to the board meeting in June. The auditors flagged that because we are hiring in Scotland we may need to register with the Scottish charity regulator. Greyham asked when will we be reviewing our financial controls, using the CC8 checklist. From 2018, the Charity Commision will be asking much more invasive questions in the Annual Return which we will need to be prepared for; presenting the questions and our draft responses to ARC at the September meeting. Lucy spoke briefly about individual donations and a reduced attrition rate this year following renewed contact with donors, which will be included in her CEO Report for the full board meeting.

Date of the next meeting

2.30 - 4.30pm on Thursday 1st March 2018