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Dalton comes out against paid trustees and unitary boards 4

Governance | Tania Mason | 12 Jan 2010

Governance expert Dorothy Dalton has stormed into the debate over whether trustees should sit on unitary boards alongside the executive and be paid for their work.

In her leader in this month’s edition of Governance magazine, which she edits, Dalton refers to RNIB chair Kevin Carey’s speech to the Acevo conference late last year when he said that the current model of governance, where executive teams are accountable to unpaid, non-executive boards, is “bust”.

Carey advocated unitary boards comprising both executives and trustees. “It should be obvious to anyone that the one thing non-execs can’t do is effectively monitor execs, especially in the area of finance and budgeting," he told the conference.  "No director of finance is worth her salt if she can’t run rings around the honorary treasurer.”

But Dalton argues that the reputation of unitary boards has been tarnished by the failure of paid non-executive directors of banks to control the excessive risk-taking of their executive who, with them, are directors of the company.

She points out that Sir Richard Greenbury, who championed the unitary board against executive excesses, is now advising large companies to introduce two-tier boards. And she contends that the record of unitary NHS boards, in place for many years now, is no advertisement for the model.

Trustee remuneration

In an interview with Civil Society last December, Carey said that the sector should be able to pay its trustee boards without needing permission from the regulator.

“I am not telling all charities they have to pay their trustees,” he said.  “I am not telling any charity how to run itself – but there are certain things I want done.

“Charities that wish to pay for non-executive expertise should publish what they pay and let donors make up their own mind about whether they want to support the charity.  Caveat emptor is good enough the retail sector, why is it not good enough for charity?”

But Dalton concludes: “If the very large charities want unitary boards and paid trustees then let them have them as long as they do so purely in the interests of their beneficiaries and not in the interests of their trustees or executive.

“All we ask is that they stop trying to impose on others their model of governance on the grounds of good practice when most of us believe this model is wholly inappropriate.”

See here for Dalton's leader.

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Directory: Association of Chief Executives of Voluntary Organisations (ACEVO) | Governance | Royal National Institute of Blind People (RNIB)
Who's Who: Dorothy Dalton | Kevin Carey