Every year, the trustees behind the UK's 170,000 registered charities make thousands of decisions that shape services, safeguard funds and steer organisations through uncertainty. While the charity sector has produced a rich body of guidance on board effectiveness and composition, less attention has been paid to how composition shapes the quality of a board's decisions.
New research from the University of Bath School of Management, supported by Nigel Kippax and Charity Finance Group (CFG), sets out to address that gap. Unlike many studies, it combines charity sector data with established academic research on decision-making and behavioural science, drawing lessons from theory and practice to identify what helps boards make better decisions.
The study – ‘Composition, process and quality: understanding board decision-making in the UK charity sector’ – follows up on earlier research on trustee motivations and shifts the focus from the individual trustee to the board as a collective.
The team’s study joins two simple questions: what is a good decision and what is the composition of a board that makes good decisions?
The findings
The research reached three central conclusions: good decisions are driven by good processes; good processes depend on the people around the board table; and boards must actively create psychological safety to challenge assumptions, reduce bias and improve decision-making.
Through interviews and a survey, the research team drew up a list of five measurable traits that trustees associate with high-quality decisions. The research reveals that mission alignment topped trustees' priorities (97%), followed by consideration of risk (85%) and evidence (76%).
Completing the five, over half of trustees flagged the surfacing of alternatives before deciding (56%) and balancing the short and long term (50%).
Notably, the two criteria trustees ranked lowest are also the ones the study found most vulnerable to behavioural biases, including confirmation bias, authority bias, status quo bias and anchoring bias, highlighting the importance of board cultures that encourage constructive challenge.
The DREAM framework for better board decisions
From these findings, the researchers developed the DREAM framework, a practical tool that boards can use to assess decision-making quality, board development needs and recruitment priorities.
- Duration-aware – balancing the short and long term goals
- Risk-considered – weighing risks and downsides, and opportunities
- Evidence-based – grounded in adequate information
- Alternatives genuinely considered – surfacing real options before deciding
- Mission-aligned – serving beneficiaries’ interests first
Underpinning all five traits is psychological safety. The researchers argue that boards must create environments where trustees can question assumptions, challenge senior voices and surface alternative perspectives without fear of criticism or exclusion. The study also shows that cognitive diversity only strengthens governance when it is matched by diversity of voice.
Practical applications
The DREAM framework can be immediately used as a board development diagnostic and a recruitment tool, helping organisations assess whether their board composition, culture and practices support high-quality decision-making. Recommendations are organised into practical 'musts', 'shoulds' and 'coulds'.
Nigel Kippax, charity governance and risk advisor and CFG Associate, comments: “In the first research phase, the student team looked at the link between board effectiveness and trustee motivations. In this second phase, the team investigated the decision-making process and how boards should be comprised so that they can make high-quality decisions.
“Not only has the team unearthed fascinating insights into what optimises and undermines good decisions, they have developed a practical framework for boards to ask where their composition, recruitment or culture might be letting quality slip. The DREAM framework is designed as a practical diagnostic tool for boards and those who recruit them.
"Perhaps the most interesting implication is that good decision-making is ultimately a culture issue as much as a governance issue. The same conditions that support better board decisions, such as constructive challenge, diverse perspectives and psychological safety, are equally important within leadership teams and throughout the wider organisation."
Dr Richard Fairchild, Senior Lecturer at the School of Management, University of Bath comments: “The student team has produced an impressive piece of research and have developed a helpful diagnostic tool for charities to use when recruiting trustees. Interestingly, the team’s research surfaces two paradoxes.
“The first is around mission alignment and, consistent with phase one, it's the single most important trait when recruiting trustees. Yet while boards see their current trustees as mission-aligned, few actively recruit for it. The findings indicate boards may be overlooking a characteristic that trustees themselves associate strongly with high-quality decision-making.
“The second is around skills: larger boards with broader skills coverage can deepen behavioural biases such as groupthink, authority bias and deference to seniority, while weakening psychological safety. Overall, this is a highly impactful and novel piece of research that should help promote better trustee recruitment.”
The research team is clear about the limitations of the study, and it is hoped the findings mark the start of a wider conversation among charity leaders, chairs, trustees and recruiters about how charity boards can be optimised for quality decision-making.
If you would like to take part in further research in this area, have any feedback or would like to discuss the DREAM framework and how it might support your organisation, please email the CFG team.
About the research
This study is the second phase of a collaboration between the University of Bath School of Management and Charity Finance Group (phase 1 of the research). It used a mixed-methods design, combining six in-depth interviews with charity trustees, spanning organisations from a £600,000 campaigning charity with four trustees to a £15 million housing and youth services charity with 12, and a 41-item survey of 34 trustees. The survey deliberately used scenario-based questions, asking trustees what they would realistically do rather than whether they believed themselves prone to bias, a method shown to surface behavioural tendencies more accurately. Findings were triangulated across five sources: existing literature, the earlier phase of research, expert input from a senior experimental psychologist at Bath, the interviews and the survey. Participants were reached largely through CFG's own networks. The project received ethical approval from the University of Bath and all responses were anonymised.
About University of Bath School of Management
The University of Bath School of Management is one of the UK's leading business schools, renowned for its academic excellence, innovative teaching, and world-class research. Ranked 1st in the UK for Marketing, 3rd for Accounting and Finance, and 6th for Business and Management Studies in The Complete University Guide 2027, the School equips students with the knowledge, skills, and experience needed to thrive in successful global careers. As a leading centre for business research, 56% of its research submissions were rated 4* – the highest possible standard – in the latest Research Excellence Framework (REF). The School also holds the prestigious five-year EQUIS accreditation, recognising its international standing and commitment to excellence in management education.”
About CFG
CFG is the charity and membership organisation that supports other charitable organisations to make the biggest difference possible. We do this by helping them to make their money and resources go further, by putting financial leadership at the heart of their decision-making. Since CFG was founded in 1987, we have evolved to welcome all finance professionals working for charitable and social change organisations.
We also welcome non-finance professionals who recognise that we deliver greater impact when we are financially confident, trustworthy and dynamic. Today, CFG’s vibrant community manages around one third of the UK’s entire charity sector income. We are a diverse and inclusive community of people who are passionate about delivering impact through financial leadership. Together, we lead the way for charity finance.
Contacts
Emma Abbott, Head of Communications and Content, CFG: emma.abbott@cfg.org.uk
Glyn Sheldon, Communications Coordinator, CFG: glyn.sheldon@cfg.org.uk
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