Blogs

Do I miss my shareholders?

Governance | Thomas Hughes-Hallett | 1 Jul 2005

Tom Hughes-Hallett on why board members need to have a stake in their charities.

Having moved from the world of commerce to that of charity, conversation that arises over dinner sometimes goes a bit like this:

"You must miss your bright colleagues and the cut and thrust of deal making."

"No my new colleagues are just as bright and if anything we cut and thrust harder and more passionately than the average city dealmaker."

"Ok what do you miss?"

"Sometimes I miss my shareholders."

What leads me to say this?

Maybe I miss clear ownership. Having lived in the most regulated of worlds with clear structures, I have joined a world full acronyms and diverse structures. Every charity seems to have a different language. I am chairman of a charity that has a board. I am chief executive of a charity that has a council. I am special trustee of another charity. But in all these who is the owner?

Board members of a PLC recognise the need to satisfy their shareholders. Failure to do so results in take over or dismissal. Ownership is clear. Who are the true owners of a charity? As a young lawyer, the mental image of a trustee was of a worthy professional, protecting family estates and minimising tax payments. He never seemed like an owner. A charity's commitment to pioneer and innovate fits uncomfortably with the picture of this tweed suited worthy.

Does your trustee body act as an owner or as custodian of somebody else's historic passion? If you don't act as owner, is there not a danger that the chief executive assumes the owner role and becomes better known than the charity itself.

What are the characteristics of a good owner?

• Passion. A clearly evidenced commitment to a vision of success.
• Investment. Being prepared to invest funds personally in their chosen passion.

In football terms, it is about recruiting the right manager to deliver to that passion and ensuring that their team deliver to a mutually agreed goal; supporting, advising and challenging them, but not trying to train the team themselves. But when three home games are lost in a row and relegation looms, it is also about having the courage to ensure that their team stays up whatever it takes.

Can this be different in a charity?

Passion. Does your trustee body have a shared passion for improving the arena identified by your charitable objects? What does each member of the trustee body do personally to demonstrate this? Have they volunteered in the soup kitchen, done a sponsored walk? Many owners have served on the shop floor. Have you?

Investment. Look through the accounts of any Footsie company; almost without exception board members will own shares in that company. Do you? It is always easier to ask when you have given yourself. Furthermore, you are bound to take greater interest in the effectiveness of a charity to which you have given a meaningful/painful commitment of money.

Delegation and challenge. This can be the area where ownership is most often missing from trustee bodies. There can be concern about treading on the executive's toes so that politeness prevents sufficient challenge of a well intentioned professional executive body who are about to make a strategic blunder.

If the reader of this piece is trustee of a charity ask this simple question: 'Would I play my part in this charity's future differently if I had bought 10% of the shares of this organisation?' Conversely, dear chief executive, before you next curse the passion of your trustees be humble and remember that you are the respected steward but they are the owners.
_______________________________________________

Profile

After 22 years in banking, Tom Hughes-Hallett joined Marie Curie Cancer Care as Chief Executive in 2000. He had personal experience of the help and care that Marie Curie Nurses provide when a close associate and friend died with cance. He has been the Chairman of the Michael Palin Centre for Stammering Children for many years and was recently appointed a Special Trustee of Great Ormond Street Hospital Childrens' Charity. Tom's West London home is filled with his renditions of opera favourites much to the delight and sometimes, dismay, of his wife Jules, their three children, two dogs and cat. What little free time he has is taken with tending his cattle in Suffolk, walking and avidly listening to his most recent acquisition, an iPod.

Tweet

Directory: Great Ormond Street Hospital | Marie Curie Cancer Care
Who's Who: Thomas Hughes-Hallett