Tuesday, 10 February 2009

Governance and the Charity Commission

The Charity Commission have published a report into the way Age Concern set up a membership body ," Heyday" which has made losses. It has commented on how the governance worked in Age Concern . One of the issues raised was whether it was appropriate to have such a large Board. Other charities with similar Board arrangements need to reflect on this now.And in a recession charities should not shirk reform .

Age Concern have had a Board of 36 ; far too large I believe , and a substantial number were in fact employees drawn from the various independent Age Concerns around the country . Age Concern is in fact a federated charity , made up of all the excellent local Age Concerns that we know and love. Of course this matter is being dealt with in a sense because Age Concern and Help the Aged are merging and already have a new Chair and CEO of the proposed merged body who take over from !st April. I am confident they will take on Board any lessons in a good way . However we must not think that charities should not explore innovative ways to make money or to trade . Indeed , in a recession that will be imoortant .

But I think the Charity Commission itself must reflect on how they approach governance issues in larger charities. I do not think that a "one size fits all" approach to governance works. Whilst a totally unpaid trustee Board of volunteers works for the vast majority, I believe there is scope for those charities who want this to make payments to trustees . I also think different governance structures should be more common . For example , a common form of governance in the public sector is for a Board of non execs and execs , with a non exec Chair.

The Charity Commission need to be more welcoming to new approaches and make it easier for Boards to pay their trustees.Not large sums . Or bonuses! But reasonable amounts that recognise they are responsible for charities that have turnover the size of many large businesses. Members tell me that the Commission does not always appear welcoming to such proposals . However they have agreed some proposals for change It has not always been easy . And it has been time consuming and costly for those that seek change. The Commission now need to take a more permissive approach and give advice and support to those that want change. To be clear , there is no legal restraint that bars charities applying to pay trustees or change arrangements . Some have . But it needs to be made easier for this to happen by the CC. And charities need to be clear that they can approach the CC to get change .

After all , there is a very obvious point arising out of the CC report on Age Concern . If trustees are to carry out their duties effectively in an increasingly complicated and financially diverse economy , there must be a case for paid trustees . These days the public sector recognises that non execs need to be paid if they are to be expected to oversee the spending of large sums of money .Our sector becomes ever more diverse with social enterprises that do not shy away from non exec pay . Of course this must be down to individual charities . They must decide. With a growing sector different governance forms are becoming more appropriate.

ACEVO has always taken a keen interest in good governance . It is crucial to a Chief executive. And crucial to effectiveness in organisations . The recession should be a stimulas to governance reform .

Let the debate begin .

1 comment:

carlcecilallen@aol.com said...

Money is not the problem when it comes to Trustees and Directors.

The disaster that is the financial system aptly demonstrates the point.

Performance problems in governance begin with the mistaken assumption in organisations that the chair and chief executive officer must have a degree of discretion that borders on being dictatorial or sole ownership.

Thus most chairs and CEO’s surround themselves with people who will not challenge or bring different thinking or new information to the board meeting.

Or the governance processes discourage, intentionally or not, any challenges or diversity of thinking or production of a proper contradistinction with its identification of contradictions, paradigms shifts, dilemmas and differences( useful or not).

So governance culture is the much more intractable part of the performance issue in governance than payments to Trustees and Directors.