Noisy Leadership

Are you a quiet or noisy leader? What works best? I was at one of our ACEVO regional meetings in Oxford last week, and we had a fascinating debate on this in the wake of recent controversies.

A key role for any social leader is 'speaking truth to power'. But how do you do this? There are some CEOs who believe you must never speak out in public and do all your lobbying behind closed doors. They fear that if they are publicly critical they will be cut off from access or 'got at' in some way. 

This is wrong. No politician or senior official will pay you much attention if they think you will never speak out. That would mean they can safely ignore you. They will pay attention if they think you might speak out publicly, and if they think that what they are proposing is going to be criticised in the public domain. We social leaders hold a vital weapon in our hands. The media love us and we are trusted. When a politician or government official is interviewed the public are inclined to be skeptical. When we appear, there is trust in what we say and claim. Ipsos MORI’s trust surveys (like this one usually indicate that around 15-20% of the public trust politicians, while more like 60-70% trust charities.

Being quiet, then, will not achieve what you want. Of course, the power to speak out must be used judiciously. You should be careful to modulate your criticisms with praise when it is due. Always slamming everything just doesn't work. But on occasion you must be noisy.

I'm certainly not regarded as a shrinking violet. On the Oxfam issue I have been very outspoken. Indeed my views featured in opposition to some backbench government MPs on Friday's BBC Radio 4 World at One. But I have tempered this with lots of work with government when there are issues we care about as a sector. I doubt I was asked by David Cameron to write the choice and competition report in the listening exercise because I'm a quiet leader, or to speak with him when he launched the Open Public Services White Paper because I was seen as docile.

An independent and robust civil society must not whisper but make itself heard. That is why we must avoid the temptation to keep quiet over the election period. CEOs and their trustees must determine to speak out when that is needed, and tell people if they feel they are being gagged. Lord Finkelstein, for one, as he said in Parliament last Thursday would like to hear if charities and campaigners feel gagged by the provisions of the Lobbying Act.

This may sometimes get uncomfortable. I didn't exactly enjoy the dirt heaped over me after my robust defence of professional salaries for CEOs or the sarcasm of Daily Mail columnists. But leadership is often uncomfortable. If you can't stand the heat, get out of the kitchen - as they say. And good leaders are able to juggle when backdoor diplomacy is best and when it isn't.

There are many leadership styles. As many as there are leaders I suspect. But being noisy has its place!

And on the subject of noisy leadership I guess you could add the recent example of the Prime Minister in Europe. I was interested in the interview with Jeremy Hunt MP on Today this morning. He made the point that "leadership can be lonely" and he is right. Leadership is not always about seeking or getting a consensus. Sometimes a decision needs to be taken that may not be universally popular - as we saw with the row over Junker. That may be a decision you have taken that may not be universally popular with your Board or your staff, and that's a lonely position.

I remember one of the early ACEVO posters which said (over the picture of a mountain) "it’s lonely at the top". That is exactly why an organisation like ACEVO exists; to support and advise CEOs and to provide a peer network that gives that support when difficult decisions have to be taken.

World at One and free speech

The debate on charities’ right to speak out lumbers on. It was a hot topic of conversation last night at three receptions I was at, not least the launch of the smart new Third Sector magazine which will now be published monthly.

I was pleased to be able to defend our historic right to campaign on issues of public concern on the BBC’s World at One this afternoon. One of the MPs interviewed is arguing that if charities have contracts for services we should not be allowed to speak out. This would drive a coach and horse through the governments attempts to reform public services, and would undermine good policy making and better legislation. Fundamentally, the whole argument is based on an impossible premise. Charities’ work to help the lives of the beneficiaries is inseparable from their work to speak out on their behalf.

This point was made far more eloquently in the House of Lords yesterday, in a debate on a motion moved by Baroness Scott of Needham Market noting the contribution of the voluntary and community sector. Speaking movingly about sector independence, Lord Judd said:

“I do not think that I am oversimplifying in saying—it was particularly during my time as director of Oxfam that this thought began to crystallise very clearly with me—that advocacy is not something that charities do in addition to their voluntary work; I became convinced that advocacy was an essential and inherent part of the voluntary service.”

And even better, statistics consistently show that the public are on our side too. They want us to speak out. The most revealing statistic here was from Ipsos MORI polling that Ben Page quoted at ACEVO’s Gathering of Social Leaders last month; more people thought we ought to be campaigning to change public policy (32%) than thought we currently are doing so (24%). So in fact we should be expanding our advocacy role rather than merely defending it against those who disagree with what we say.

And we shall carry on doing so. What I find surprising in all this coverage is that these anti-democratic views in fact come from a tiny minority of parliamentarians. The vast majority of MPs and Peers on all sides recognise that our advocacy role is vital to better law-making, and contributes to a vibrant democracy. Long may that last.

Ethical Investment

Time to pull our socks up.  The Panorama programme this evening, which in many aspects was rather thin, has nevertheless highlighted an issue the sector needs to grapple with.

When organisations have endowments (like many Foundations) or big reserves they must invest these both for the good of their beneficiaries, and ethically, for the wider good.

Charity Commission advice used to be too blunt and unhelpful: that trustees should only invest for the maximum return. Now their advice (CC 14 to be precise) is more nuanced and encourages 'mission driven' investment. Not enough charities are taking notice of this new more flexible approach. They need to.

Because, quite simply, it doesn’t seem right that charities invest in tobacco or arms companies.

We need more people in the sector looking seriously at ethically managed funds. The argument is that they don't give as good a return. But you might be surprised to learn the size and strength of the ethical investment industry. There is around $34 trillion under management in funds that subscribe to the UN’s Principles for Responsible Investment. That’s about a third of all money under managed funds anywhere in the world. So there’s plenty of choice and we expect that choice to grow.

Impact investment funds, though in their infancy now, may also become an investment option of choice for charities further down the line. Why shouldn't our sector be looking at how we can expand opportunities for social finance; for loans to develop and grow our sector

So, I'm giving our sector and those associated with it a call to action. I have two messages.

One is to the fund managers themselves. Why are you not alerting your charities to ethical problems with proposed investments?  Before you put our money into an investment you think raises issues then consult the charity trustees responsible. Fund management companies need to get their act together and understand the ethics of their investment decisions.

Secondly, to charities. Charities traditionally delegate their investment decisions to a sub committee and they in turn appoint fund managers. So many trustees simply do not know where their investments go. Time for the full board to review investment policy. The full board should review the Charity Commission advice and question whether they are investing in line with their mission and with their own ethos.

The sector needs to do more to engage with ethical investment principles. Ensuring that their investments conform to the particular and the wider good will help ensure that our sector remains true to our collective mission in all aspects of our work.

This is our wake up call.