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FDs...Get on the trustee train!

Finance | John Low | 1 Apr 2011

John Low urges FDs to become trustees, and reap the benefits.

It’s a well kept secret that many trustees feel they get as much out of being a trustee as they give to the charity they support. In my chief executive roles I have always encouraged finance directors, and others within my executive teams, to become trustees of other charities. It is an investment well-worth making, with the return far exceeding the ‘lost time’.

I’ve found through personal experience that it gives an invaluable alternative perspective which is helpful in a wide range of decision-making situations. The experience gained by the directors concerned has really strengthened my senior management teams, to their benefit and mine.

Sir Gus O’Donnell, when he was permanent secretary in the Treasury in Gordon Brown’s day, developed what was then a revolutionary mantra for staff development – “If you want to get on, get out” – and he practised what he preached. If it’s good enough for the head of the Civil Service, then I’m sure it’s good enough for finance directors in the sector.

As a trustee you are responsible for the overall governance of a charity, setting the strategy, holding the executive to account for delivering that strategy, supporting them through the inevitable challenges and travails, as well as the fiduciary responsibilities as a trustee.

It is always a salutary experience for a finance director to be forced to take decisions based on the figures and forecasts presented by someone else – after all other people depend on your figures every day and the boot is on the other foot. Without being able to dive into the figures as you might like, it is necessary to make key decisions for which you are legally responsible, without being close to operations.

Occasionally other CEOs tell me that their finance directors struggle to see beyond the numbers to the practical realities of running an organisation, let alone the strategic context. As a trustee you are forced to consider the wider impact of financial decisions. Will cutting back in one area lead to a reduction in the service the charity provides to beneficiaries? Might it lead to a reduction in staff numbers, or will external factors force a greater focus on generating voluntary income to compensate?

It’s only when faced with the practical realities of these difficult decisions that we can truly appreciate the impact of our decisions, both as a trustee responsible for the life and work of others and inevitably in our day job. Our perspective subtly changes for the better.

On a professional level there are a range of benefits that being a member of a board of trustees can bring. It’s not only about ‘stepping outside the finance box’ but also about understanding additional aspects of charity management. As a trustee you gain a new network of contacts and may learn about a new part of the sector, assuming the charity supports a different cause to the one you are employed by, which is normally the case to avoid conflicts of interest.

There is a constant need for people with good financial experience on trustee boards, yet sadly there is a dearth of people coming forward to serve. Nevertheless, those who do volunteer often end up having a pivotal role on the board and have a big impact for good on the charity. Their experience is invaluable because they bring a confident scrutiny and balanced perspective which is helpful to other trustees whose strengths lie elsewhere. Their ability to recommend best practice, manage risk and share ideas based on up-to-date experience is vital in times of crisis when difficult decisions about reserves, cuts and investments have to be made.

Multiple rewards

The giving of time, skills and expertise is precious. The emotional reward you get from helping a small charity to punch above its weight cannot be overstated. If you are considering becoming a trustee but still need another reason, it’s worth considering that many finance directors go on to become chief executives of charities. The experience of being a trustee undoubtedly helps you to prepare for that. Managing your own chair and board of trustees is so much easier if you’ve been one yourself, and appointment panels know that.

At CAF we have a first-class finance director who is a trustee of an addiction charity and is on their audit committee, as well as sitting on the board of an NHS trust. He enjoys his non-executive roles immensely, finding it helps put the day-to-day challenges of CAF into perspective. Without doubt, the benefit to CAF far exceeds the investment of his time. We have a positive gain, not a loss, and so will your organisation when you take up that trusteeship. 

John Low is chief executive of the Charities Aid Foundation 

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