Editorial: Remuneration and regulation are Acevo's most controversial ideas

At the heart of Acevo's commission of inquiry into governance, which reported last week, is the relationship between the chief executive and the board, especially the chair.

Stephen Cook
Stephen Cook

As the report makes clear, when things go wrong in a charity it's often because of deficiencies in that relationship: a chair getting too involved with day-to-day management, a chief executive neglecting to put the board in the picture, trustees going off on pet projects, a weak chair against a powerful chief officer - the list goes on. The chief executive is the most important figure - you can just about run a successful charity with a good chief and a poor chair, but the converse rarely works. Yet 80 per cent of serious disputes end up with the resignation of the chief executive rather than the chair, according to the Acevo report.

Some of the figures and their interpretation are not simple: 83 per cent of 418 chief executives who responded to a survey by the commission said they had good or very good relationships with their chairs. That can hardly mean everything in the garden is rosy, however, because 70 per cent also agreed or strongly agreed that improving governance was a priority for the sector. Forty per cent agreed or strongly agreed that their boards were highly effective in developing and reviewing strategy, and only 25 per cent disagreed, 5 per cent of them strongly. But the commission, chaired by Sir Rodney Brooke, gives most weight and space to the voices of the malcontent minority - which is understandable, given its focus on Acevo's constituency.

Many of the recommendations the commission has come up with are unexceptionable, and some of them are by now familiar: developing and applying the Code of Good Governance, conducting governance reviews, improving recruitment procedures and promoting and supporting trusteeship. It also comes out in favour of the appraisal of trustees, which is a little more controversial and quite likely to be resisted. But its most controversial proposals concern the payment of trustees and the way such payments are regulated by the Charity Commission.

Charities should consider seeking permission to pay trustees or remunerate them for loss of earnings, the report says, in order to attract young or working trustees, or simply to attract people with the necessary skills. This recommendation is made despite the fact that 80 per cent of respondents to the survey of chief executives said they did not anticipate a future need to remunerate trustees, and only 15 per cent said they did. But Acevo, backed by some of the bigger, service-delivering charities and anxious to advance the professionalisation of the sector, is on something of a mission on this subject.

The report also challenges the Charity Commission to be more "empowering and enabling", and to allow charities to choose the governance structures they want. At the moment, they have to gain the permission of the commission, working against some demanding criteria, if they want to pay trustees or compensate them for loss of earnings. The report's audacious final proposal, however, is that the burden of proof in such cases should shift from the charity to the regulator. It remains to be seen whether this is a just a bit of calculated cheek to Dame Suzi Leather or the start of a serious debate.

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