The voluntary sector can amaze by its ability to bring the most unlikely
people together to achieve
extraordinary things. Where else would environmentalists, ex-prisoners,
some of the most excluded in society and some of the best connected, people
with a passion for music, for waterways, for heritage or health, campaigners
for disability rights and sellers of fair-traded craft come together?
Underpinning this vitality are people with skills in leadership, strategy,
accounting, the law and marketing; professionals with commercial acumen and the
capacity to stick to the mission, be accountable and to exploit opportunities
whilst engaging stakeholders, volunteers, paid staff, funders and the
beneficiaries of the charities. It may be amazing but it certainly isn’t
simple.
Being successful in the voluntary sector takes an
outstanding group of people who bring their skills and knowledge to the
governance and practice of the charities. Many of them work within the sector -
more than ¾ of a million people are employed in charities alone. In addition 22.7
million people volunteer, and of these around 580,000 are trustees
in UK voluntary organisations.There are actually 945,278 trustee roles in total,
this discrepancy is accounted for by the fact that some individuals hold more
than one trustee role.
Being on a Charity Board is one of the most satisfying, and frustrating,
experiences you can have. The
satisfactions come from playing a part in changing the world for the better,
from using skills - perhaps honed in
another sector - to contribute to governance, strategy, accountability and
managing risk. They also come from
experiencing leadership in a world that may be very different from the day job,
from making connections - both to the powerful and the powerless - and from
learning new skills, strategies and tactics that can be taken back into the
public and private sectors.
It’s a fantastic and, more importantly, a useful and energising place to
be. It may help you in your career but more importantly it will, if you get it
right, help you to use your skills to make a difference to the lives of others.
Trustees from the corporate sector can bring a business analysis that is
worth its weight in gold (though sadly it is not tax deductible, unlike
donations of the real thing). They bring an obsession with return on investment
that, especially when allied with a focus on measuring the social return on
investment, can bring huge dividends. They know the value of tangible assets
and can be at the heart of developing innovative and effective models for
leveraging finance.
In the way a NED at the corporate board table who asks the innocent
question can be revered, so too is the trustee who asks 'why do we do it this
way?’, especially if they are clear they are not assuming their own way is the
most effective.
They also have much to learn. A great Chair will help a new Trustee work
out how best to make their contribution, and how to use their expertise.
Sometimes the CEO (who will often themselves have worked in at least two of the
three sectors – public, private and charitable) may be able to ‘translate’
between the charity world and the trustee’s.
However it’s done, some learning, some clarification of expectations and
even some humility will be in order.
Charity governance can however be extremely frustrating and both the
executive and non-executive members often exhibit what I call irritable board
syndrome. People employed in charities, especially the Chief Executives, often
complain that charity trustees, despite bringing a range of commercial and
financial skills, “leave their brains on the hat stands” and support ideas
based more on emotion than analysis. The non-execs, i.e. trustees, will often
mutter that charities are amateur and more focused on process than outcomes and
less interested in routine business analysis than in participation and
engagement.
Neither view is true but both are repeated often enough to need some
examination.
I think the frustrations result from a misunderstanding of the
motivations and expertise of Board members, senior executives and volunteers.
They’re also caused by a failure to acknowledge the different models of
governance and good practice that people from different sectors carry in their
heads.
Having such a variety of people involved in charity governance ought to
be a marriage made in heaven - and it can be. It can also create the sort of
marital discord that results from a basic and fundamental refusal to see things
from the other’s perspective.
This was brought home to me when I recently interviewed a senior
executive from a FTSE100 to be a charity trustee. Their employer - one well
known for its commitment to CSR – had encouraged them to become a trustee.
There was an implicit message: it would be good for their career.
However, when we talked, it was clear there were many gaps in their
knowledge of the sector and in addition they weren’t really sure how it might
be helpful in what they called ‘the real world’.
The gaps were largely about governance and regulation but they were also
about good practice in intervention strategies. The person didn't know, for
example, that the Chief Executive is not a member of the Board. Charity
trustees have all the legal responsibilities and duties of governance and CEO’s
are not (except in rare circumstances) able to hold these. Certainly in many
well functioning, effective boards of large charities the CEO will, in effect
and with the support if the Chair, act as if they were part of a unitary board.
But they are not. And effective CEO's and Chairs never forget this. As such
it's a great experience for an incoming trustee: they will learn what it is
like to carry the full responsibilities of governance without the CEO as
intermediary.
They also didn’t know that trustees can’t profit from their trust and
that the reason the charity wasn’t going to pay them wasn’t because they were
mean or couldn’t afford it but that the regulatory framework generally
prohibits it.
There was an assumption that the focus on engagement and participation
was a distraction from a focus on the bottom line rather than the normal
practice that, together with a focus on outcomes and impact, is the goal of
many charities. The different emphasis arises from what those with a stake in
the organisation expect and want. In the business world, shareholder management
requires tangible results in the form of profit and dividends. In the charity
world, stakeholder management requires attention to process so that all
those who are involved are motivated to maximise the charity’s impact, to
invest in resources such as volunteers and to protect a charity’s most valuable
asset, its reputation.
So, given the potential for misunderstanding and frustration, is it
worth it? Is it useful for an executive on their way to the top in the
corporate sector to spend a significant part of their time as a charity
trustee? The answer has to be a resounding yes – but only if you develop the
skills of bridging between worlds, learning to respect difference and utilising
your skills in new fields - experiences that are, after all, particularly
helpful for people who are working in new and emerging markets, in customer
focused activities or where the management of reputation and risk are vital.
I’ve noticed recently that there has been a focus on gaining charity
governance experience by many who are under-represented on the Boards of the
corporate sector. The number of women, the spread of ages, the representation
of people from minority ethnic groups on the Boards of charities far exceeds
those in the FTSE 350, let alone the FTSE 100. It has along way to go but the
chances of gaining a position of influence are greater in the voluntary sector
for people from all backgrounds.
What will you learn? That not all charities are the same, that size does
matter (and even the largest charity will seem unfeasibly small to someone from
the corporate sector and hugely bureaucratic and process bound by an
entrepreneur). That charity governance and the demonstration of stakeholder
engagement, impact and the management of risk and reputation will complement a
focus on business outputs, investment ratios and efficiency. Neither trumps the
other, each is vital.
You might also meet some useful people. Many suggest it’s a good way to
meet senior people in different industries. That’s true and you will extend
your networks in surprising ways. You’ll learn how to motivate people without
financial reward, about reputation management, engagement, accountability and
delivery. You'll learn how to measure impact not just profit and return, you'll
develop a more nuanced understanding of costs and benefits, and you'll learn to
value above all else the experience and views of those who receive what ever
services and benefits your charity offers.
You’ll still need to work out how to ensure your bosses value your new
experiences as much as you now do. After all, they may still think it’s ‘just a
bit of charity work’. You know it’s made you a better leader and it’s up to you
to translate that experience back into the day job. You’ll also know your skills and expertise are needed. Just over
one in seven registered charities report they have a shortfall of trustees.
You’ll know that as well as giving your skills and expertise, you've developed. And yes,
you’ll get a warm glow from making a difference but you’ll also know you’ve
become a more skilled, more expert and a more valuable resource yourself.
Lynne Berry OBE
Commission on the Voluntary Sector and Ageing: Chair
Canal and River Trust: Deputy
Chair:
FT NED Advisory Board member
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