Monday 23 July 2012

Paying trustees; diversity or one size fits all?

The ink was hardly dry on the Hodgson report before a number of umbrella bodies were writing to Hurd to demand he rejects the recommendation to allow charities over 1m to pay their trustees. In a sector that values diversity, is it not strange to adopt a position that tells individual charities what they can and cannot do? Clearly there are many charities who do not want to pay their trustees. The majority. And no one should force them to do so. But why should those charities that do want to pay trustees be told they can't ? We are asking our ACEVO members whether they would want to take up such a freedom - the survey is still open  but it is clear that there is a real diversity of views.

There has always been a significant minority who would like to pay trustees. They do so for various reasons. Some believe that they cannot recruit enough diversity ; younger people or women and ethnic minorities so pay will help attract them. Others want to recruit top class commercial and financial skills and have found this problematic. Some of my members report general difficulties in recruitment and retention.

Some make another argument for a form of payment: one can then make clear there is a contract which requires something in return ; training , attendance at meetings , reading papers and putting time into the task. We get some superb trustees who make a tremendous contribution. We also have trustees who do not. This was one of the reasons the public sector went for remuneration. So now it is clear for non execs what is expected in return , including regular performance appraisal.

Hodgson came to an entirely sensible conclusion - not pro payment, nor anti payment - but rather that it should be up to individual charities what they do rather than the regulator. To demand charities not be allowed to exercise their own judgment strikes me as contrary to the very notion of a diverse sector where we value and applaud different approaches.

It is interesting to note that over the last decade all public sector bodies have moved to paying their non execs. And the record on diversity on public bodies has improved dramatically. The record is significantly better than our own.
And there is an interesting historical parallel ; the payment of MPs. Believe it or not there was a fierce debate in Victorian times around the idea that you should pay MPs. It was held to be a public service and people should put themselves forward for selfless and public spirited reasons. Which was why the Commons was dominated by the rich and landed . Pay enabled working people to stand. Nowadays no one would argue against that!

For many of the larger and better known charities there is less of a problem in securing good trustees. But for a range of middle income charities, where much of the business is in contracts, getting good commercial skills is more of a problem and payment could help. Some charities may also take the view that it is only key trustee positions that need payment. Perhaps the Chair or a treasurer, rather than the entire board.

This is, of course, legal already - if you have weeks to spare and unlimited patience you may just be able to persuade the Charity Commission to allow pay. But it is a major hassle.

Of course many will put forward contrary arguments to those above. They are valid arguments, and the debate is healthy. But why not direct that debate at individual charities, rather than the regulator or government? Why not, as Hodgson suggested, let them be the ones who, having listened to the arguments for and against, make up their own minds?

As my Director of Policy Ralph Michell  pertinently puts it in his first blog post for Third Sector , “in each individual case, when a charity considers paying its trustees, who is best placed to make the judgement on whether it should – the charity whose money it is, or the Charity Commission?” Read his blog for Third Sector in full here.

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