The new governance model at St Andrew’s Group of Hospitals is thought to be unprecedented in the sector, and has the backing of the Charity Commission and chief executives’ body Acevo.
Sir John Brigstocke, chief executive of St Andrew’s Group, said the new governance system was the logical step for a large service-delivery charity that needed to operate like a business.
An “unwieldy” board of 37 trustees has been replaced with a board of 10, comprising five paid executives and five unpaid trustees. Executives on the board are the group chief executive, the finance director, the general manager, the marketing director and the personnel director. The chair is a trustee.
Brigstocke said: “Nowadays, to be a listed company on the London Stock Exchange you’ve got to sign up to the Combined Code on Corporate Governance. The code covers the need for a remuneration committee and nomination committee, conflicts of interest, and auditing. It is far more demanding than charity law.”
St Andrew’s remains a registered charity and has no shareholders, but will use the same governance. The reform follows calls by former health secretary and Charities Bill scrutiny committee chairman Alan Milburn for service delivery charities to improve governance and accountability.
Sir John added: “Our income is £90m, so there is no way St Andrew’s is suggesting that our model is suitable for everyone.”
Sue Ryder and Leonard Cheshire are big service providers that could move in a similar direction, Brigstocke said, “but we are not putting ourselves up as a model”. The NCVO said it hoped St Andrew’s did not become a trendsetter for the sector. “We believe that the separation of management from the board of trustees is inherent to the value that charities bring,” said an NCVO spokesman. “St Andrew’s is not necessarily paving the way for broader changes to governance in the voluntary sector.”
Geraldine Peacock, chair designate of the Charity Commission, said: “Moving to a business model of governance makes sense in this case and the commission is satisfied that any potential conflicts of interest have been addressed.”
Stephen Bubb, chief executive of Acevo, said it was “terrific to see a charity break with the old conventions on corporate governance. We hope this will lead to other major trading charities learning from these lessons.”
Bubb said Acevo had urged the commission to take a bigger role in enabling charities to change their governance and to issue guidance.