Parent firms direct their foundations, says report

A third of corporate foundations admit they are controlled by their parent firms, according to new research.

The foundations could be contravening charity law on independence because Charity Commission guidance states that trustees must act solely in the interests of their charities.

In a survey commissioned by the Cabinet Office and the Charities Aid Foundation, 10 out of the 29 foundations asked said that the company that created them retained complete or nearly complete control over what they did.

Amanda Jordan, chair of corporate responsibility consultancy the Smart Company, which conducted the research, said: "By law, corporate foundations must be independent of their corporate founders.

"The level of independence varies significantly, from foundations whose activities are intricately linked with the founder firm's corporate responsibility strategy to those that are totally independent."

The survey also revealed that 52 per cent of foundations draw trustees from existing or previous employees and directors.

A Charity Commission spokeswoman said: "It is fundamental that directors' charitable foundations act solely in the best interests of the charity.

If a commercial parent receives any benefit from a foundation, it must be justifiable and incidental."

The independence of corporate foundations has been under the spotlight.

Last week, documents released under the Freedom of Information Act revealed that Kurt Hoffman, director of the Shell Foundation, had discussed Shell's controversial new Sahkalin-2 gas project in Russia with Hilary Benn, Secretary of State for International Development.

Hoffman told Third Sector: "We directly control what we do - the company has no say whatsoever."

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