Organisations can look at many structures for joint working, but it is important to do due diligence whichever you choose, says Helen Verney.
In this climate of cutbacks, organisations are feeling the need to focus on core activities, reassess the 'nice to haves' and look at ways to achieve more with less. But how? Coming together with other organisations can be a fantastic way to meet these aims. And if you want some clues to potential strategies, you can find them in the behaviour of the parties after the general election. Consider this: George Osborne told his predecessor as Chancellor "move over Darling, we're staging a takeover", which is when one body assumes control over another. The Tories did so with the help of the Liberal Democrats, formed from the unification of two political parties that were once in an alliance (a group of organisations working together for a common goal), and now in a coalition (a temporary alliance). Alistair Darling must be wondering whether, over the next five years, the two organisations might carry out a merger (when two organisations become one) or even be able to collaborate (work together to achieve a goal) before separating. His party had hoped to create an association (a group organised for a joint purpose) with several other parties, but had not been willing to make a partnership (two organisations working in association) with the Conservatives, and will instead throw rotten tomatoes at the government from across the Commons.
How does this affect you?
The chances are that your organisation will have considered one if not more of these ways of working in the past couple of years. Even if it hasn't, it might well in the future. The list of possibilities shows that you don't need a full merger to be effective. As finance directors, we need to pay attention to the legal differences between these arrangements, not least to satisfy the regulators. But at the same time we should not get hung up on terminology. Instead, ask what is the substance of the arrangement being discussed and what due diligence is required. Due diligence is worthwhile, whichever arrangement you are pursuing - it's not only for mergers - and there is a useful due diligence checklist on the Charity Commission website at www.charity-commission.gov.uk/library/chkduedil.pdf
So let's not be afraid of words, let's not be the party pooper in the discussions, and let's get on with the due diligence and help to manage the risks so that we can embrace the opportunities. We need to press on, with care, to find the best way to take our sector forward - and to start soon, because George is repainting the horizon as we speak. - Helen Verney is finance director of Jewish Care. Click here for the original article.
