Our aspirations for the performance of boards in the not-for-profit sector must equal or surpass the calibre of boards in any other sector, says Judith Davey.
The critical role of not-for-profit organizations in civic society and the importance of a healthy civic society to democracy mean that this is an imperative for the sector.
I’m searching for new trustees and a chair in two organizations currently – an international federation and a mid-sized local charity. Unsurprisingly, given the external environment, both organizations are searching for non-executives with proven expertise in managing business and fundraising.
These searches have thrown into sharp focus the challenges of a voluntary board, and even with "top notch” trustees, how hard it is to achieve these aspirations for high performing boards in the sector.
The case for the role of the board in terms of oversight and independent challenge has been made time and time again, particularly in terms of some high profile failures of both public and private sector organizations over the last couple of years. The nub of the matter is how to get the board of a voluntary organization to work given the inherent difficulties and constraints that confront it.
It's a matter of time
Non-executive directors or trustees only spend a very limited amount of time working together as a board – in many cases they spend less than one working week together each year. Paradoxically, in my experience, the smaller organizations often need the greater time and focus from the board because of executive capacity and shoestring resourcing. The role of the trustee non-executive director takes time, and even given enormous commitment to the organisation and its’ mission, it is difficult for people to find the time that’s needed.
Just like the debate over allowances for local authority councillors, it is easier for people to participate fully in voluntary boards who are retired or who have enough personal wealth that they don’t need to juggle voluntary commitments with a need to work. Yet we all know that diverse backgrounds, skills sets and life experiences create environments where insight and innovation can flourish.
Time is an issue because we need effective team working, insightful analysis and challenge. It’s just not possible to create a high performing board that goes beyond oversight and solvency to strategic and generative thinking that guides the organization to achieve its mission.
A number of mitigations have been developed in terms of the modus operandi of the board: We make sure that board papers are sent out in plenty of time. We strive to ensure that board papers are concise with appendices containing background detail. We come to agreement about whether evening or day-time board and sub-committee meetings work best. We have “away days” and board retreats. All these things help mitigate the situation, but in my experience the core issue remains.
Should we pay our trustees?
I know that Kevin Carey’s views as chair of RNIB, about current governance mechanisms being ‘bust’ and suggesting that trustees should be paid met with a mixed reception last year. Charity Commission guidance on payment of trustees for their role of being a trustee is permitted in very limited circumstances (CC11). But I do think that this area could be explored further to see if it helps address the issue of time as a major impediment to high performing boards. Members of NHS boards are paid modest salaries for their work, and public roles like Mental Health Act Hospital managers get paid for attending each meeting and for every tribunal on which they serve.
Would modest payment for being a trustee of a charity solve the issue of lack of time? I wonder whether any research has been undertaken which compares the functioning of NHS boards and not-for-profit boards? This is certainly an area I’m going to investigate further. Would appreciate your views and pointers…
(And an interesting postscript – my friend Jan who runs a social enterprise delivering HR services to CSO's in the UK, has just told me that of the 48 new clients that she has taken on this year, only one of them has a formal selection process for recruiting board members! I’ll explore trustee recruitment in a subsequent article…)
Judith Davey (pictured) is director or performance & accountability at ActionAid and is currently studying leadership and governance at the Harvard Kennedy School of Government