10 Mar 2014
Chairman's Corner: Our chair thinks trustees are irrelevant
The Chairman asks Neal Green to respond to a worried company secretary whose chair is convinced that trustees are irrelevant.
I recently became company secretary of a small national charity based in my area. Its success is due to the vision, drive and charisma of its chairman. He is a successful businessman with a reputation for getting things done.
There are twelve trustees in all. The board meets every three months, but turnout is often low. The chairman sets the agenda and makes it clear what he thinks ought to be done. The other trustees don't question or disagree with his views. The agenda usually includes a report and ratification of the chair's actions: those decisions that have been made by the chair in between trustees meetings.
Relations between the chair and chief executive have been tense for a little while. Last week the chair sacked the chief executive for insubordination without consulting the other trustees. Two of the trustees were very concerned about this and asked for an emergency trustees meeting, but the chair said there was nothing further to discuss.
I am very concerned about the situation, and would welcome your advice.
A worried company secretary
Dear worried company secretary,
You're right to be concerned, particularly about the dismissal of the charity's chief executive. If employment procedures have not been followed, the chief executive may have a claim for unfair dismissal. It's important that the charity checks whether it has complied with its own employment procedures and gets good employment law advice.
You have a wider concern about the conduct of your chairman. Charismatic leaders play an essential role in establishing vision and driving an organisation forward, but no charity should be a one man (or woman) show. It is important for the trustees to understand that trustees have collective authority: individuals do not have authority unless authority has been delegated to them in some specific areas by the trustees. Trustees have a legal responsibility to work together and make decisions jointly, making use of any specialist skills or knowledge they have. If improper decisions are made, or actions taken, the trustees all share responsibility for this. The other trustees must get involved in making decisions about the charity and should not just rubber stamp the chairman's decisions and actions.
It's essential that you make the other trustees aware of their responsibility to attend meetings and get involved in decision making. You could use Charity Commission guidance such as The Essential Trustee (CC3) to explain their responsibilities or get a good charity lawyer to explain the duties and responsibilities of trustees. The trustees need to talk firmly to the chairman, explain the situation to him, and insist on him involving them more actively in decision-making processes. The first issue they will need to address, with appropriate professional advice, is the sacking of the chief executive. Check your governing instruments. Your trustees may have the power to call an emergency meeting even if the chairman says that one is unnecessary.
But it's not just about scaring people with their legal responsibilities; we want to encourage effective boards and charities. The Commission's publication The Hallmarks of an Effective Charity (CC60) may help; Good Governance: A code for the voluntary and community sector (available from the Governance Hub) sets out some key principles and practical suggestions. And keep reading governance!
Senior policy adviser for the Charity Commission
25 Mar 2014
Attending our one day courses is a highly effective way of ensuring new and existing trustees fully understand their role, responsibilities and liabilities.