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Research is needed to assess effectiveness of paying trustees, says law group

Research is needed to assess effectiveness of paying trustees, says law group
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Research is needed to assess effectiveness of paying trustees, says law group

Governance | Tania Mason | 18 May 2012

Funders with an interest in governance should pay for research to establish whether paying trustees does help to improve charity governance, an influential group of charity law experts have recommended.

The recommendation is contained in the NCVO charity law advisory group’s submission to Lord Hodgson’s Charities Act review.

The group considered whether the statutory power for charities to pay their trustees should be changed or extended in some way. It outlined the arguments for and against paying trustees and cited some research on US charities and UK housing associations, which was, on balance, inconclusive.  

The group concluded that no amendment to the law is required, but added: “The issue of what benefits paying trustees can bring is an area ripe for further research and it is therefore recommended that future research is undertaken in order to shed more light on whether payment helps with recruitment, diversity and improved governance.

“Funders with an interest in governance are strongly encouraged to fund further research into whether payment of trustees has an impact on the delivery of effective governance.”

The Group also recommended that the Charity Commission should publish annual statistics about the numbers of individual trustees who have been required to make payments to their charities as a result of breaches of trustee duties. This should help to reassure prospective trustees about the reality of the financial risks they face.

Elsewhere, Stephen Lloyd, a senior partner at Bates Wells and Braithwaite who is advising Lord Hodgson during the Charities Act review, has said payment of trustees will not be "a major issue again".

Speaking yesterday at the Charity Law Conference on the Charities Act review, Lloyd said:

"I will be very surprised if payment of trustees is a major issue again - rest assured on that one."

Debra Allcock Tyler, chief executive of the Directory of Social Change, who also spoke at the conference, said she had spoken to Lord Hodgson this week at Civil Society Question Time and he had been very clear that "the voluntary nature of the charity endeavour was critical".

This suggests a u-turn in Lord Hodgson's views on the payment of trustees. Last year, at the annual Charity Commission board meeting, he said that "payment of trustees is coming whether we like it or not."

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