Is the time right for paid trustees and unitary boards? Dorothy Dalton reports.
Money is short. Charities labour to make ends meet. Trustees struggle with the dilemma of cutting core costs or axing frontline services.
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.
Sir Richard Greenbury, who championed the unitary board against executive excesses, has changed his mind and is advising large companies to introduce the two tier board i.e. a separate board consisting purely of non-executive directors to whom the executive board is accountable.
NHS boards have long had unitary boards with paid non-executives. Nevertheless Mid-Staffordshire Hospital and Basildon University Hospital have hit the headlines because of poor hygiene and medical practices putting lives at risk. Many non-executives of NHS trusts complain that decision-making is dominated by the executive with non-executives neglecting to scrutinise major proposals properly and failing to monitor performance.
Not a time, you might think, for raising the issue of paying trustees for trustee services and introducing unitary boards. Not so. Kevin Carey, the new chair of RNIB, advocates both. Acevo has taken up the cause and launched the ironically named Progressive Governance Association. Progressive or regressive?
Presumably, not only will the association support paid trustees and unitary boards but also, Kevin Carey’s desire to concentrate on performance. Good governance consists of three key strands of governance- corporate/fiduciary, strategic and impact (governance September’07). As boards, we must do all three equally well while holding our executive to account (and supporting them).
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.
Dorothy Dalton is the editor of governance