Analysis: 'Caution should be paramount when recruiting trustees'

Sir James Crosby (right) has resigned as a trustee of Cancer Research UK after a critical report on HBOS, but Lord Stevenson is staying with mental health charity MQ

[L-R] Lord Stevenson and Sir James Crosby
[L-R] Lord Stevenson and Sir James Crosby

In the wake of heavy criticism from MPs for his role in the downfall of HBOS, Sir James Crosby, the bank’s former chief executive, announced his decision last week to resign from his role as a trustee of Cancer Research UK.

A report on HBOS by the Parliamentary Commission on Banking Standards had said that the responsibility for the bank’s failings should lie with its former chairman, Lord Stevenson, and its former chief executives, Crosby and Andy Hornby.

Crosby said he was resigning because he wanted to put the interests of the charity before his own; he had already given up his role as treasurer of CRUK in December 2012.

By contrast, the mental health charity MQ said that Lord Stevenson would retain his role as its chairman. It said it would stand by him and that it benefited from his expertise and insight.

Stella Smith, a strategy consultant working with not-for-profit organisations, says the difference between the two cases demonstrates how charities make their own judgements about the make-up of their boards.

"Who is on the board sends out a very strong message about what kind of organisation you are," she says.

"If you have bankers and ex-City people on your board, it sends out a very strong message. Every charity is going to come to a different decision."

Smith says the cases highlight the need for charities to think hard about who is on their boards: "Charities should always be reviewing their boards, looking at their trustees and thinking: ‘Are these the right people for our board at this time?’"

Dame Mary Marsh, director of the Clore Social Leadership Programme, agrees that charities should recruit to their boards carefully, but avoid excluding people because they come from a particular profession. "It’s really valuable for charity boards to be as diverse as possible, and that means you do want some people with corporate experience," she says.

Stephen Brooker, director of Trustees Unlimited, which helps charities find trustees, says it is important to be cautious when recruiting, especially if the person concerned is well known. "When a charity recruits a high-profile person to the board, it is taking on a personality risk," he says.

Brooker says most boards are careful when electing or appointing trustees.
"If someone is involved in something morally repugnant, but legal, a board would back away. However, it’s not always easy to spot where the risks lie."

He warns that some charities might be blinded by a potential trustee’s celebrity and forget to assess properly the potential risk to the charity.

"I have never been a member of a board where that has happened," says Brooker. "But you have only to look at the press to see that it does indeed happen. Not all charities take enough care."

Smith concludes that there is a tendency for the voluntary sector to have unrealistic expectations of City trustees. "We think they are going to come in with a silver bullet and fix everything, and I think we need to step away from that," she says. "They are undoubtedly bringing skills, but they are not the answer to all our prayers."

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