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It's not what you know but who you know - apparently

It's not what you know but who you know - apparently
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It's not what you know but who you know - apparently

Governance | Anne Moynihan | 1 Jul 2012

Anne Moynihan asks whether its not what trustees know but who they know that counts. 

There appears to be a worrying trend, backed up by considerable anecdotal evidence and published reports, which suggests that trustees should be expected to donate or actively raise funds each year for their charity. Closely related to this is the idea that a trustee’s usefulness is inextricably linked to the number of high net worth individuals they are ‘plugged into’.

While ‘fundraising boards’ are commonplace in countries such as the USA, do we really think that it is good idea for a trustee to receive a letter annually from their charity asking them how much they wish to donate? Do we not already ask an inordinate amount of our trustees who, on the whole, give their time voluntarily with many not even claiming legitimate expenses for fear of adding to the financial burden on the charity they support? A trustee’s responsibilities remain with them 365 days per year (366 in leap years) and not, as many are told when they are recruited, ”only four meetings a year and a couple of away days”. Trustees are ultimately responsible for the success of their organisation and held accountable if it fails. Although extremely rare, being held accountable can also mean that a trustee could be held personally liable for their actions or inactions.

Given the challenges faced by many voluntary and community sector organisations it is perhaps not surprising that many of us cannot help but wish for a benevolent benefactor or two to ‘wave their magic wands’ and make everything better. It is however hard to square this view with the one that we are all grown-ups now, embracing the contract culture with professional boards and staff that can compete in even the toughest environments.

If we are serious about diversity – and there is an enormous amount of evidence that suggests we should be – do we really think this will be achieved by recruiting trustees on the basis of how much money they or their friends and contacts can provide? While there have always been boards where the trustees were predominantly from – what is euphemistically called – “the great and the good” it is universally held that the quality of boardroom decision-making is improved and enhanced when there is ”a rich and diverse set of experiences, views and voices” around a boardroom table.

If as a recent report suggests there are four key reasons to be a trustee and they include:

  • trusteeship matters to charities and to society;
  • the charity sector needs more trustees; and
  • many boards would benefit from greater diversity, then surely a trustee’s worth must not be determined by the wealth they have or the company they keep.

Trustees should be recruited so that they collectively provide a mixture of skills, experience, qualities and knowledge appropriate to the organisation and its beneficiaries’ needs while taking an active and intelligent approach towards diversity³. How to improve board effectiveness is a very live issue for all sectors and, according to the Financial Reporting Council in its Guidance on Board Effectiveness of March 2011, “An effective board should not necessarily be a comfortable place. Challenge, as well as teamwork, is an essential feature. Diversity in board composition is an important driver of a board’s effectiveness, creating a breadth of perspective among directors, and breaking down a tendency towards group think.“

We need to concentrate in the first instance on getting diversity of skills, abilities, experience, personalities, backgrounds etc on our boards.

Anne Moynihan is a governance consultant 

 

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