Give charities a seat in the boardroom!

A startling intervention on the shallow approach of big companies to the charity world came as a welcome surprise this weekend. Britain’s biggest companies have a superficial relationship with charities and volunteering, the Bank of England’s new chief economist said, as reported in The Times and The Economist.

Speaking at the Pro Bono Economics lecture, at the charity he helped to found, he made a strong plea for greater interaction between the non-profit and for-profit sectors. The Times reported that:

Andy Haldane used his first speech since taking up the job to criticise companies for failing to recognise the full value of charities, which he believes contribute as much to the economy as the entire energy sector.

He singled out in particular the dearth of boardroom members drawn from charities. The presence of only one non-executive director from a charity in the entire FTSE 100 ‘is not consistent with volunteering having entered the corporate bloodstream’. There was also no excuse for one-third of FTSE 100 members having no volunteering programme for their staff, he said.

The only FTSE 100 board member from a charity is Jasmine Whitbread, the international chief executive of Save the Children, who is a non-executive director at BT. However, she spent much of her career in the corporate world before joining the charity sector.

Charity chief executives often preside over huge budgets, have to motivate people willing to work for nothing or very little, manage services all over the country or abroad, and have to build and protect their brand.

In the Pro Bono Economics lecture, Mr Haldane said that volunteering in the UK might amount to as much as 4.4 billion hours per year, not far off 10 per cent of the total hours put in by the paid workforce. In terms of value to the economy, it could be £50 billion per year, or about 3.5 per cent of GDP — similar to the size of the UK energy sector. However, too many companies failed to appreciate its value, he said.

‘My suspicion is that many companies are still not close to recognising fully the benefits from volunteering,’ Mr Haldane added.’And let me illustrate that with one startling fact. Among those FTSE 100 companies, how many board members are drawn explicitly from the voluntary sector? Precisely one. That is not consistent with volunteering having entered the corporate bloodstream.’

He predicted that companies would wake up to the value of charities and have far closer relationships with them, largely to recruit and retain the best staff.

Younger people have shown that it is a pre-requisite that the company they work for does more than just make money, he said. ‘Generation Y, born from the 1980s onwards, place a much greater weight on a diverse career experience, with a strong social dimension, than their predecessors. And generation Z, the millennials, are unlikely to buck that trend. Where they lead, companies will surely need to follow.’

Mr Haldane was formerly the Bank’s head of financial stability, a position he held during the banking crisis. The lack of diversity on banks’ boards was said to be a factor in the crisis. Critics said that it led to ‘group think’, a culture where no one challenged anyone else’s view.

An excellent way to start to tackle this problem of groupthink would be to bring in the talents of charity CEOs. 

Most big British companies have corporate social responsibility (CSR) programmes, which make donations to charities and encourage staff to volunteer their skills. Many now have special days where staff can take time off to do voluntary work. But this is generally superficial and may even just be patronising to the people whom staff go to work with. It makes board directors feel good but it neither helps them really understand the sector nor care for its future. I have met too many of them who think running voluntary organisations is ‘just a bit of charity work’.

Yet many of ACEVO Chief Executives run complex voluntary organisations,  where thousands of people operate in highly ethically-conscious environments. Their ‘bottom line’ is far more complicated than a mere profit/loss and investment calculation. They have learnt also to earn and keep the public’s trust, while managing some of the biggest brands in the world. As an aside, I’m pleased to see this theme is on parliamentarians’ radar at least; it crops up several times in our Red, Blue and Yellow Books of the Voluntary Sector, the first of which is launched at Labour Conference this Sunday.

It is time these good people were sitting on the boards of our top companies. Years ago I was asked to sit on the ‘Tyson Task Force’ which looked at board room diversity. A good report emerged but the recommendations were weak and amounted to little more than exhortations. That was a decade ago. Little has changed. Now it’s time more was done to reform boardroom governance in the City. And this won’t happen without legislative change. So I’m pleased that our party conference programme will start off one part of this debate; promoting greater dialogue between charity CEOs and politicians. Next it’s the turn of the boardrooms themselves…

Lunching in Cambridge and Eleanor Roosevelt

Lunch in the Master's Lodge at Emmanuel College, Cambridge today. Most agreeable, shame about the weather. One of ACEVO's brilliant regional events and this time hearing from Fiona Reynolds who is now Master of Emmanuel but known to us all in the third sector as the former CEO of the National Trust.

It was fascinating hearing Fiona talk about leadership and the challenges of implementing a vision and changing a culture against the odds and against the grain. She spoke about how she had worked to transform the NT culture of "closed arms conservation" to “open arms". Moving from “you shall not" touch, walk on grass, let kids shout etc to a welcoming and warm approach to people and places.

Fiona began her career in campaigning charities; around the need to protect the environment and countryside. She argued passionately about the importance of charity campaigning and the role we have played over the centuries. She reminded us all that this is the bedrock of what we do and it just rekindled my own determination to be robust at the challenges we face, whether that might be the Lobbying Act or the Charity Commission trying to make us define and account for the so called campaigning we do. 

A rather wonderful quote from Eleanor Roosevelt Shows just what we mean by the way in which citizens who come together to campaign enrich our democracy and how essential civil society is to us all.

 

“Where, after all do universal human rights begin? In small places, close to home, the world of the individual person; the neighborhoods they live in; the school or college they attend; the factory, farm or office where they work...without concerted citizen action to uphold them close to home we shall look in vain for progress in the larger world."

Dolly Parton and the English countryside.

Driving up to Charlbury on Friday we had the latest Dolly Parton CD "Blue Water" on. Did you see her at Glastonbury?  I did - or at least virtually via the dear old BBC (too old to actually go to these things now!). She is not just a good singer but a source of wisdom. I remember wanting to use one of her homely homilies in a lecture I was writing but my then Director, one Ralph Michell, was disapproving. He's now at the Cabinet Office where I'm sure they don't do Dolly.

Here are some of my favourites.

"The way I see it, if you want the rainbow, you gotta put up with the rain".

"Storms make trees take deeper roots".

"We cannot direct the wind, but we can adjust the sails".

It was a pretty glorious weekend in Charlbury. It's such a delight to move from the pollution of London  to the purer air of the Cotswolds. Walking the Hound down the Mill Stream I was reminded of just how beautiful our English countryside is; the bird song was joined by the bells of Spelsbury Parish Church  and the sounds of the cricket over the fields. Of course we must never take this great inheritance for granted and so the work of bodies like the National Trust, the CPRE or the many environmental campaigning charities is crucial in stopping the depredations of over development. It's another reason why we must resist any attempt to curtail or silence our independent voice or any move by the Charity Commission to make us delineate our so called "campaigning" spend. After all, what are the "Campaign to Protect Rural England" to do in their accounts but say they spend 100% of their income on campaigning. Their official objective is to "campaign for a sustainable future for the English countryside [and to] highlight threats and promote positive solutions". It's what they do William!

And last week we had our annual Charlbury Beer Festival, quite an event these days with a vast array of boutique beers from around the Cotswolds. The proceeds go to international development charities - and no nonsense about  "every penny" as Charlburians are a sophisticated lot and understand the need for "overheads" in charities. You get an idea of the size from this photo. 

Progress is often good but sometimes bad. Our vicar in Charlbury has recently departed for the Archdeaconry of Dorchester. We have been told we are not to have a new vicar but a "priest in charge"; the Bishop of Oxford seems to be into control-freakery. The succession of Vicars and Rectors of Charlbury dates back to the 11th century. Unbroken till now. There have been some distinguished Vicars; notably one of the translators of the King James Bible. I'm afraid in such matters I'm a decided reactionary. When they do appoint a "priest in charge" I shall continue to call them Vicar. This is probably just part of a future plan to amalgamate us or turn the Church over to Carphone Warehouse.

Anyway, enough rant. I'm off to Cardiff.

Filming in Islington, Boris, pensions and yoof.

Up early for a spot of filming in Islington (where else) on pensions. And before you yawn, for many of us this is becoming a key issue. And it ought to be so for all my charity CEOs.

It's not just the "pensions revolution" that George Osborne announced this year, but also auto-enrolment that comes into force next year for all our staff.

  

These mean all charities have to review their existing schemes - some will not be approved for the future - and make arrangements for auto-enrolment. It has to be electronic and automatic when new staff join. There is also the question of how we tell staff about pensions and give them advice on choices.

ACEVO has worked with one of the country's top pension experts for over 14 years. Back before I came to ACEVO we chose Foster Denovo to provide our staff pensions and the experience was so good we asked them if they would work with member charities on their pension schemes. 14 years later we are now still working with them and are planning a new advisory offer, which covers both advice to us as employers and advice to staff. It's needed.

So this morning we were filming to provide a new web portal for use by employees and employers and explains key concepts and things to do and know. It stars yours truly and Ian Bird, the key guy at Foster Denovo.

Funnily enough I was having a chat on this theme with one of my newer members of staff - 23 and not enamoured with the idea of saving for a pension. I remonstrated with him! But it did show how we do need to do work with employees on why they should take an interest in pensions. As one gets nearer to that time (for me many years ahead!) pensions loom larger. But I intend to be wise and invest my pension pot rather than buying up a wine warehouse or blowing it on a round the world trip.

The film studio was in a gorgeous Georgian terrace and up the road was Boris Johnson's house. Just had to go and look!

And talking of feckless yoof, a new welfare package should be offered to young people in an attempt to slash youth unemployment, according to a report published yesterday by a leading think-tank, the Centre for Social Justice (CSJ).  It wants politicians to make a commitment that tackling youth unemployment will be a 'moral mission' in the next Parliament and calls for a fresh relationship between young people and the State. The ambitious four-stage blueprint outlines plans which will help and support young people develop work skills and training from primary school through to adulthood.

This is a good report. It shows the value of think tanks in adding to the political debate and generating good ideas, as IPPR did with their Condition of Britain report. Such a shame a number of politicians have got in such a lather over IPPR. We need organisations like them and the CSJ.

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.

Wrong way for Charity Commission.

The Charity Commission's new consultation, released last week, includes a proposal from MPs that will increase the administrative burden on charities and increase what many think is over-regulation in our sector.

In September the Government accepted "in principle" a recommendation from the Public Administration Select Committee that charities' annual returns to the Commission should state how much they spend on campaigning. It said it would first ask charities to take the initiative themselves in being more transparent about their political activities, and then explore with the Commission the possibility for extra information "to be captured and disclosed in a proportionate way through existing processes."

But now the Charity Commission – with its announcement this week of the proposal, subject to consultation, that charities should indeed from next year have to say in their returns how much they spend on campaigning (and how much they receive from government sources) – has ignored this and gone ahead with a blunderbuss approach. What happened to the "first step" and the use of existing processes? Clearly the Commission are not interested in that.

The Commission is pushing ahead with the Select Committee’s recommendation more forcefully than the Cabinet Office envisaged or is desirable.

Looking at the Public Administration Select Committee’s minutes it is clear this recommendation may have stemmed more from the opinions of some of its own members than from the evidence presented to it by witnesses. It goes further even than Christopher Snowdon of the Institute of Economic Affairs, hardly the greatest supporter of charity campaigning. He concedes that it is ‘fairly arbitrary’ to distinguish campaigning from other charity activities.

The Committee’s report also seems to confuse ‘campaigning’ and ‘political and communications work’, which suggests that they treat the terms as interchangeable.

Let's be very clear as a sector about what is going on here. There is a clear element in the Commission who believe that we need to 'stick to the knitting'. The fact that the campaigning and advocacy work of charities is inextricably linked to our work at the front line appears to escape them. To take one obvious example, look at RNIB's fantastic work for almost 150 years, both supplying a wide range of services for people with sight loss and agitating for numerous government policies to make their lives better. It is illogical and unnecessary to separate the two functions.

And what is worse is that this intervention into a political debate detracts from the work the Commission should be doing on sector regulation. With Paula Sussex starting as their new Chief Executive next week they have an excellent opportunity for new energy in pursuing this goal.

But for now, perhaps the Commission themselves should stick to the knitting, and avoid clamping down on the historic role and duty of charities to speak truth to power.

Bad food and MPs...

Well done to Michael Gove MP for the new guidelines on food in schools, cutting out fries and sugary drinks. High time too, as obesity among kids soars and the rise in cases of diabetes and pre-diabetes is increasing significantly. And what may you ask is our health service doing about it? 

Well, in hospitals, sweet nothing as they say. Walk into most hospitals and the tempting offers on chocs and coke from vending machines and cafes are all around. Why, Guys hospital even has a McDonalds on the premises. And at Tommies you walk in past an array of retail outlets piled to the gunwales with unhealthy food options. It's time hospitals got on message. I realise they are turning a fast buck on these outlets but I thought they were about improving our health! Could Jeremy Hunt take a leaf out of Michael Gove's book on this? And let's face it. Most elderly people in hospital for a long period emerge malnourished - Age UK has run their excellent campaign against malnutrition in hospitals for almost 10 years now. Hospitals just don't get good food, let alone healthy food. End of rant. 

We had a Social Investment Business reception at the House of Commons this week (more sticky buns on offer there; I said no!). We were introducing some of our investees to MPs and we had a good cross-section of Members from all parties, as well as Ministers and their Shadows. Nick Hurd MP gave a great speech and emphasised the point I had made about how social finance is one of those subjects where you do find cross-party consensus. The Big Society Capital started off as a Labour idea, but was taken up enthusiastically by the Conservatives, and David Cameron is a great advocate of social investment. And Minister for Civil Society Nick Hurd has been a great champion for our sector. He has a lovely approach to the role which combines an oft laconic style with wit and passion for the sector. He even went so far as to describe me as ‘an institution’. Obviously kind comments by him about me simply reinforce my view he is a perceptive chap.

The event was sponsored by Crispin Blunt MP, a former Prisons Minister and a non-exec on my Social Investment Business Board. His comments on a range of issues make great common sense, as I told him, now that he has been freed from the cares of office! But the fun of this event was in meeting the many charities and social enterprises that have taken loans to promote their ambitions. 

SIB has made over £350m worth of social investment to over 1000 organisations. This makes us the UK's largest social investor. I'm chuffed to be their Chair. And in the spirit of keeping fit I can report I spent an hour in the Brixton gym last night. Needed to after that rather splendid dinner at the Cass Business School on Wednesday.