Getting the relationship between executive and board is a key part of securing the success of any charity and for trustees to be confident they are fulfilling their duties.
The chief executive is a professional engaged to dedicate their time and particular skills to ensuring the charity functions efficiently and effectively. But when the buck stops, it stops with the board, whose trustees are ultimately responsible for running the charity. The relationship between board and the chief executive therefore needs to strike a balance between the latitude needed by the chief executive to make things work, free of micro-management, and the need for the board to have strategic control and effective oversight of the work.
In terms of strategic control, there will be a core of decisions that board will want to reserve to itself. It is the board that sets the ethos or mission within the scope of the objects and the board who initiate the processes to effect change to the charity's constitution. It is the board who decide to buy or sell land, to charge or mortgage it. The board sets targets and budgets, sign-off accounts and approve the annual return. It is the board who settle the division of responsibility between it and the chief executive, establishing the policies and procedures that protect the charity, its assets, its beneficiaries, staff and public. Ultimately the board oversees the work of the chief executive and the staff.
Of course, even these reserved decisions are not taken in splendid isolation. They are taken with the benefit of a flow of information, recommendations and reports from the charity's staff, through the chief executive. Ensuring management information and the reports needed by the board keep flowing is part of the chief executive's wider role managing and seeing to the general running of the charity, in accordance with the board's policies and budgets.
For maximum effectiveness, the board and the chief executive need to know where the lines between roles and functions lie. Sometimes the scope of the role of the chief executive will be set out in detail in a service agreement, but that is only part of the picture. As a more usable day-to day resource, charities should consider compiling a scheme of governance. The best examples contain much more than an explanation of the role, function, duties and responsibilities of the board and the chief executive. Ideally, it is a go-to primer on the charity's governance, covering its structure, strategy for compliance with law and regulation, a library of polices, formal delegations and committee terms of reference.
Detail is all well and good, but a trustee code of conduct can help explain how board standards are lived in practice. It is here that the deeper insights about the relationship between board and chief executive are often found. A code of conduct can describe the standards for engaging constructively and pro-actively with the chief executive and senior management and for holding them to account - something which is as much about being an approachable sounding-board for ideas and advice as it is about constructive challenge and asking questions. As the Charity Governance Code says, the relationship is not just about regular and consistent monitoring of performance but also about providing the support needed to meet goals.
Although the aim and function of the relationship to be fostered between the board and the chief executive is typically the same for all charities and shares common features, in practice the detail will be unique to each charity's particular work and resources.
Con Alexander is a partner at Veale Wasbrough Vizards
Civil Society Media would like to thank VWV for its support with this article.
