Charity chief executives should be on the board of trustees

[Philip Benstead]

http://www.theguardian.com/voluntary-se ... ign=buffer

Charity chief executives should be on the board of trustees
By making senior management trustees, we will end up with a stronger and better governed voluntary sector
Men balanced on seesaw over globe
There would be a balance between the executive – who has detailed knowledge of the organisation – and the non-executive who can challenge and ask questions. Photograph: Gary Waters/Getty Images/Ikon Images
Supported by
About this content
Helena Wilkinson
Partner and head of charities at Price Bailey

Tuesday 19 April 2016 07.00 BST Last modified on Tuesday 19 April 2016 07.03 BST
Share on LinkedIn Share on Google+
Shares
59
Comments
7
Save for later
Most charity trustees are unpaid volunteers, but in many other organisations – such as academies, housing associations and commercial companies – there is is at least one member of paid staff on the board.

In many larger commercial companies the board is usually a balance of executive directors (senior management staff) and non-executive directors. The non-executive directors are seen to be independent and impartial and play a critical role – just as charity trustees do – in holding the executives to account. They take a lead in challenging the robustness of the organisation’s strategy and make sure it is on track to succeed.

The charity sector’s model of governance does not follow the normal business pattern, and I think this is problematic.


Why students should have a place on university boards
Read more
Regulators such as the Charity Commission have been concerned about the conflicts of interest that can arise from employees of the charity holding a position on the board. For example, if a charity board is considering a merger, employee board members might not act in the best interest of the charity if their job was at risk.

I think this is a flawed argument and, in fact, would argue the opposite. Having the senior executive team on the board of trustees would make them more aware of their own roles in the governance of the organisation. Simply blaming the board for poor decision-making would no longer be an easy excuse that charity chief executives could use as to why the charity was not successful. Instead, there would be a united front on governance as all decisions would be appropriately debated and agreed upon by the board, which included the executives.

I believe that every charity chief executive should be a trustee of their charity and organisations should seriously consider including the whole senior management team on their boards. Where governance in an organisation is working well – with the communication between the chief executive, their team and the board working in a collaborative fashion – then perhaps there is no need for them to be trustees. However, this is the exception rather than the norm.

The Charity Commission and ICAEW strategic review project last year concluded that “many trustee boards lacked both financial and general experience, particularly in developing strategies; that a number of charities appeared to suffer from a conflict between the CEO and trustees, and that few charities linked strategy to risk”. I echo these sentiments. Having worked in the sector for many years with a vast number of charities, I know that the strategic management in many charities is relatively poor, which in turn leads to poor governance, failings and inefficiencies. There is an obvious reason for this.


Top skill required on a housing association board? Juggling
Read more
Many trustee meetings are held on average four to six times a year, which if each meeting is even three hours, equates to between 12 and 18 hours a year. Even if trustees spend additional time preparing for the meetings, it is unlikely that the total time spent running a charity exceeds more than a few days in total. This is not a lot of time to spend leading and directing a complex organisation, usually with many different charitable activities using many staff and volunteers. This is why a growing number of larger charities are recognising the need for more time to be spent by the trustees outside of board meetings.

I think that with the chief executive on the board, and ideally perhaps the whole senior management team too, it would mean that the balance and roles on trustee boards could be changed. The unpaid trustees – being the equivalent of the non-executives – would then be able to take a step back and be much more of a critical, independent objective friend rather than having to take the lead in directing the strategy without much insider knowledge. There would be a balance between the executive – who has detailed knowledge of the organisation – and the non-executive who can can challenge and ask questions – no side will then dominate the board room or decision-making process.


Do charities expect too much of their trustees?
Read more
By making senior management trustees, I think we will end up with a stronger, better governed sector that is more focused on strategy and risk which in turn leads to more efficient, accountable and resilient organisations. We need to move away from the concept of trustees not being paid, but to one where they are paid – just not for being trustees.

[Philip Benstead]

https://www.linkedin.com/pulse/should-m ... ublished=t


Sam Ma'ayan
Senior Consultant - Chief Executive, Director, Trustee, Chair and Non-Executive Director Recruitment at Morgan Hunt
Follow
Should money ever go to charity board members (In response to Helen Wilkinson)
Apr 20, 2016
• 85 views
• 7 Likes
•
0 Comments
• Share on LinkedIn
• Share on Facebook
• Share on Twitter
On Tuesday morning the Guardian put forward an opinion piece by Helen Wilkinson making a case for Senior Management Team members, particularly the Chief Executive, to be included on the charity board of trustees. Despite a good argument, I strongly disagree and believe that the suggestion would be a dangerous one for the sector.
To begin, I believe Wilkinson confused two fundamental issues:
1. That Trustees (or some trustees) should be paid positions.
2. That Senior Management should sit on the board.
Although related, the discussion points are different ones – all SMT members on the board must be paid, but paid trustees might not be SMT members. I will be focusing on the first issue raised i.e. paid trustees as these apply across both points.
Wilkinson does lay out some good points. In a number of charities there is a clear disconnect between the trustees and the people actually running of the charities, leading to conflicting opinions on strategy. There is also an ongoing struggle for talent on boards, and using the existing ability within a limited number of organisations might help fill gaps in skill in some cases.
The basis of her argument however seems to be that it is ‘problematic’ that charities are not following what in every other sector is considered ‘normal business practice’ – in other words, a rehash of the ‘Fifty Million Frenchmen Can’t be Wrong’ argument/song Raskin, Rose and Fisher lent us nearly a century ago. She might be correct in most cases – the commercial world and even the public sector hold a lot of lessons that the charity sector needs to learn. But in this particular one she has forgotten a crucial point – the charity sector exists for a different reason than any other.
The private sector has no particular intention of folding up any time soon soon – in a free market economy longevity and profits are hallmarks of success. The public sector is broadly the same; I cannot see the Department for Education deciding that everyone is responsible for their own education and shutting shop any time soon. They want to survive in order to provide their vital service or product to as many people as possible for as long as possible. Even social enterprises are a business first and a force for social good second!
Charities on the other hand should exist for no other reason than to voluntarily close as soon as possible. Cancer Research UK's mission is to make itself redundant by making cancer an easily curable illness. Shelter is fighting to ensure that UK homelessness reaches a sustainable 0% so they can pass in peace. Save the Children wants to shut down because every child in the world is safe and education. As long as it’s in the right way, every strategic decision a charity makes should be shutting it down, meaning that everyone in the sector is working towards being made redundant!
Whilst everyone in the sector agrees (consciously or subconsciously) to work in that context, it is vital to have a completely independent safeguard against self preservation on strategic decisions being made, and provision of income does not help this aim. In other sectors income is a tangible demonstration that what is good for the mission is good for the trustees. However, it forms the opposite function on charity boards – it reinforced the message that what’s good for the mission may be very bad for the trustee. For this reason, being paid to be on a charity board must remain an automatic conflict of interest if charities are to retain any hope that one day they will no longer be needed.
To her credit, Wilkinson does make some attempt to identify this issue in her article. However, she fails to link this to the core aim of charities and instead discusses it in relation to other practical business concerns i.e. mergers. This means that she is not focusing on the core of the issue whilst discussing it – instead choosing to deal with problems which are common to all sectors (as far as I’m aware, commercial companies still merge (or get bought) and public sector organisations are still combined for efficiency. Despite her previous work in the sector, she has failed to identify what really makes it unique.
At this point it may be redundant, but it’s worth a quick examination of the second issue i.e. SMT on boards. While it is possible that it would be a workable solution for some organisations, there are a number of issues with the concept and a less than satisfactory answer to any one would be devastating. To name a few of them:
• Should the practice apply to executives who would not normally be considered to have appropriate skills or experience?
• How can you guarantee proper scrutiny of the SMT if they are the ones with detailed skill and knowledge in the area on the board? Should a Finance Director audit their own accounts?
• Can decisions still be made if they form a majority at meetings? If so, have safeguarding measures really been taken and if not, in what sense are they board members and not non-voting speakers?
• Should it be required when boards are heavily engaged (some may be present for as much as one or two days a week)?

In reality, it is very difficult to run a collegiate board without over-complicating the roles of individuals. To try and up skill or improve knowledge on a board by simply by adding people from the operational side of the charity is a shortcut (the kind that leads to long delays). The movement to improve governance is a slow one but one that must be allowed to work. To change the situation we must focus on:
1. External auditing of board skills.
2. Open recruitment processes to encourage diverse applicants and attract specific skills.
3. Regular reviewing of governance processes against best practice.
4. Processes implemented to allow quick actions against unengaged trustees.
5. Proper training of board members in their responsibilities.
Flashing the cash in front of boards will not help our issues and there is no substitute – so let’s not remove the best safeguarding practice currently in place in the sector in hopes of a quick fix!

[dodger]

Charity CEOs are employed by the Board of Trustees. It is therefore an ambiguous position for them to be on that board.
It is normal for the Chairman to be the one who appraises the CEO's performance and discusses this with other trustees.
However, CEOs should attend and report to the Board, make recommendations, provide feedback and advice and be the main link between the Executive and Trustees. Additionally, other staff can be invited for all or parts of board meetings, as necessary.
CEOs should not take part in decision-making and might at times need to leave the meeting if, for example, senior officers' pay (including them) is discussed.

[Philip Benstead]

I totally agree, the trustees are the decision maker and the staff including CEO should put it into operation.
Unfortunately, some on the council and staff have forgotten that.
The council is not in charge even now, if you vote for motion 5, the CEO will gain total control via the nominations committee.

CTC Membership regain control of the control and CTC.