Experts map governance lessons around Kids Company demise

Collapsed charity Kids Company may not have survived even it it had robustly followed governance standards, a report has concluded.

The assessment of the defunct children’s charity follows a High Court judgement earlier this year clearing its former trustees of being unfit to be company directors.

This case had been brought by the Official Receiver against the trustees and ex-chief executive Camila Batmanghelidjh of Kids Company, which folded in 2015.

The latest ICSA: Chartered Governance Institute research looks into the degree in which Kids Company adhered to good governance practice before its demise.

It brings together publicly available information and aims to provide trustees, governance professionals and others in the charity sector with an overview of lessons to learn.

This suggests even if the charity had strictly adhered to the Charity Governance Code, it may not have survived.

The report concludes that “as with other examples of organisational failure and poor governance, it would be difficult to state that Kids Company could have
avoided its sad fate if it had followed a governance standard such as the Charity Governance Code”.

Areas where governance standards at the charity fell short include trustees confusing their organisational and personal positions in public statements.

Other governance areas looked at, include ensuring effective trustee, board and chief executive relations and avoiding conflicts of interest.

The Institute’s head of policy (not for profit) Louise Thomson said: “The story of Kids Company has kept charity governance observers enthralled for many years. Following its closure in 2015, the organisation’s impact on charity law, regulation, governance and the wider public’s perception of the sector has been profound.”

She added: “This research paper attempts to assimilate publicly available information about the governance of Kids Company and apply the principles and practices of charity governance as espoused in two versions of the Charity Governance Code.

“It is hoped that charities will be able to draw valuable lessons from a study of governance practices at Kids Company in order to improve governance within the sector.”