Opinion

Improving governance and board performance 4

Governance | Kevin Carey | 11 Nov 2009

This is the full text of RNIB chair Kevin Carey's speech to the Acevo annual conference on Thursday 5 November 2009.

"It says much for our culture that we really believe that the way people perform depends on whether they are paid or not. Even the Church of England designates its clergy as Stipendiary or non-Stipendiary; and it incongruously believes that the latter need lower qualifications than the former for the same job!

I start from the position that amateurs - people who love what they do - present slightly different challenges from professionals because, to put it bluntly, you can't put the boot in if a person is a volunteer. Or can you?

Let us clear some ground that should have been cleared long ago. Sound management principles hold for the boards of charities:

•    Specify what you want;
•    Recruit to match the need;
•    Provide necessary training;
•    Accord people equal concern and respect;
•    Act openly and fairly.

Of course, there are some important factors lurking behind this elegant facade:

•    Specify. Most people know what they don't want but are not so good at working out what they do want. This is important because we need an absolutely clear and open basis for telling board members they're not contributing. Some charities, including RNIB, don't have total board control over board membership; my advice is that all Boards should give themselves powers to specify recruitment requirements so that memberships can only vote for suitable candidates.

•    Match. There is no point being strict about the specification if you're going to be lax in applying it. I recommend that recruitment interview panels should include a qualified outsider.

•    Train. For reasons I can't understand, we seem to think there's something virtuous in training, or skills development; and we more or less believe that you can train anyone to do anything. You can't. You might want to give a board member with fantastic technical skills some coaching in presentation; but board training should not be a fix for poor recruitment.

•    Concern & respect. People who love things become very passionate; but passion isn't always what you want. Concern and respect does not mean avoiding issues, it means dealing with them honestly and sensitively; it isn't respectful to somebody to let them go on under-performing with no prospect of improvement.

•    Open. There are too many 'political' issues and niggles round charity governance; because people are passionate, they think that's enough; and they think they have the right to go on questioning a decision that has already been taken. The wrong way to deal with problems like this is to set up a committee; only do this when you genuinely don't know the answer. Of course there are times when chairs of boards have to take decisions off the table but there needs to be a very good reason for this.

All this is pretty obvious; but some other observations are not so, having cleared the ground, let me go on.

A chair is a chair, not a president nor a Prime Minister. I'm there to:

•     Deliver the board to the management and the management to the board;
•     Only speak when there is a danger that the business will be lost;
•     Ensure that all the relevant people contribute to a discussion ;
•     Act as a critical friend - and I mean that, it's not rhetoric - to the chief executive.

Of course, things would be much easier and more efficient if the Charity Commission allowed boards to combine execs and non execs in a co-creational process. The model which makes it difficult for beneficiaries to become Trustees and which puts non execs in a supervisory role over execs is bust. It should be obvious to anyone that the one thing non execs can't do is effectively monitor execs, particularly in the area of finance and budgeting. A good CEO always knows five reasons why something should have been done or not done which will leave the board with no option; and no director of finance is worth her salt if she can't run rings round the honorary treasurer!

I believe that boards should combine: non executive wisdom and strategic drive with executive expertise and implementation; but the hierarchical relationship which puts strategy above implementation is to confuse the correct process with the ultimate purpose; you can't do implementation without strategy but the most important thing for any organisation is implementation. One of the reasons why charities under perform so badly is that enthusiasm and passion isn't enough to compensate for an obsession with process over output. We have inherited the mid 19th Century Civil Service model of procedural perfection which has been given a vicious twist by corrosive mistrust. We need to free each other to make decisions but that is only possible if we all share the belief that each of us is deciding for the best; there is too much assumption of incompetence, or worse, and too much second guessing. We're back to love and passion which spawn the most grotesque forms of perversion and jealousy.

Related to this, if we really want enterprises to be driven forward, to prosper and to grow, we can no longer rely on free strategic expertise; we're going to have to pay for it, particularly in the area of financial control. Charities where the finance director can run rings round her honorary treasurer are running on their luck; and it won't last forever.

In fact, we might do a great deal better if we pitched all the governance jargon and most of the practice overboard. You don't actually control most problems through governance but through having the right people on board who don't need it. In a very real sense, I would not want to be a member of an organisation that needed an ethics code. We behave well because we should, not because a regulator tells us to. Charities in general are not full of venal and grasping people but they are prone to a level of vanity and grandstanding which commercial organisations could not tolerate. But governance isn't going to fix this. Blockhead journalists keep asking the government what it's going to do about crime; the only people who can do anything substantive about crime are criminals.

Finally, we need to review the whole regulatory framework of charities so that they can meet the challenges which await them, regardless of who wins the next General Election. The 20th Century settlement between the citizen and the state, made necessary by two world wars, is a thing of the past. People don't expect to give money to charities only to hear them say that government should do all the heavy lifting while charities provide the icing on the cake. Conversely, if government really does want charities to be cutting edge, fleet of foot and flexible, it will have to take its foot off the regulatory pedal. Sometimes small is beautiful but we need some national charities with the heft to compete in the commercial sector and to be taken seriously by government. The DWP would not be able to ignore a disability charity with an annual turnover of more than a billion pounds."

 Kevin Carey is chair of RNIB

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