Trustee recruitment ‘opaque’ says top Commission accountant

06 Jun 2014 News

The process of recruiting charity trustees is “too opaque” and needs reform, the outgoing head of accountancy policy at the Charity Commission has said in an interview with Charity Finance magazine.

Ray Jones

The process of recruiting charity trustees is “too opaque” and needs reform, the outgoing head of accountancy policy at the Charity Commission has said in an interview with Charity Finance magazine.

Ray Jones (pictured), who led the development of the charities Statement of Recommended Practice, approved for publication this week by the Financial Reporting Council, was speaking about his work setting the standards over 20 years.

He said in previous Sorps he had attempted to develop measures to make charities give more information in their annual report about how they recruited their trustees, but that this had had limited success.

“There’s still a very opaque process for recruiting trustees,” he told Charity Finance magazine. “The purpose of accounts is stewardship of everything you do. To have stewardship you have to have transparency around governance.”

However he defended the level of transparency in charity accounts around chief executive pay.

He said the current level of disclosure was adequate, and that charities were now required to explain how they set pay.

“I think most charities will be able to put forward a coherent logic about their remuneration strategy,” he said.

Jones also said charities need to communicate much better about how they operate, or face being judged for the wrong things, such as how much they spend on administration.

“I hate the concept of administration costs,” he says. “In the end you can make administration costs any number you like; it’s a function of the creativeness of your FD and the tolerance of your auditor.”

Charities “frightened” of impact measurement

Jones also said he had been surprised that charities had seemed “frightened” of impact measurement.

“The push back against it has really surprised me,” he said.

“We thought this would be the next generation of accounting development, but there’s been a lot of resistance. People have said ‘we can’t do it because it’s not properly defined’.

“There are all sorts of metrics and frameworks and terminologies for impact reporting. But I think you can make it too scientific. I just think you should try to measure whether you’re succeeding in what you’re doing.”

Backing for international standard

Jones also gave his backing to an international accounting standard for not-for-profit bodies, as promoted recently by the Consultative Committee of Accountancy Bodies.
“I think a lot of international charities would like this to happen,” he says, “particularly in countries where there is no framework.”

Read David Ainsworth full interview with Ray Jones in this month's Charity Finance magazine

More on