At Work: Law and Governance - Regulation with Rosie

The Charity Commission's Rosie Chapman on chief executives being trustees.

Received wisdom says that chief executives can't become trustees, but this isn't the case.

However, it's worth thinking about why a chief executive wants to be a trustee. It might help the charity, but the underlying motives must be sound.

Trustees can't receive payment from their charity without an express legal authority, but we will give this authority if we're confident it's in the best interests of the charity. However, the charity's board will have to convince us that potential conflicts of interest are going to be managed well and openly.

It will need to be very clear about the advantage it sees in combining the roles of chief executive and trustee, as opposed to the chief executive simply attending trustee meetings to advise. There have to be good reasons, and the charity must be able to explain them - both to us and to anyone with an interest in the charity.

Perhaps the greatest guard against a conflict of interest is ensuring the chief executive doesn't represent the charity as well as him or herself, particularly when it comes to their own employment. We'll need to be confident that systems are in place to ensure this happens.

We would be looking for things like a genuinely objective and independent performance appraisal system, and a system for reviewing the chief executive's pay and conditions.

The reasons for combining the two roles may be strong, but this can change with time. You may want to end the employment of the chief executive, so think carefully about contractual arrangements for doing so, including the way it affects their position as a trustee. It's important to give special attention to any performance element that might be included in the chief executive's pay package.

Being above board is one thing, being seen to be so is quite another.

- Rosie Chapman is executive director of policy and effectiveness at the commission.

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