The year in management: 2013

The main developments of the past twelve months included the press furore over charity chief executive salaries, controversy over unpaid internships and zero-hours contracts, and evidence of an improvement in staff morale

Issues of pay dominated management stories over the past 12 months – from the subject of the earnings of senior management to the use of unpaid charity interns and "zero hours" contracts.

The pay packets of chief executives working for big charities became a news story in August when The Daily Telegraph newspaper ran articles criticising the salaries paid to the heads of the Disasters Emergency Committee group of charities. In response, the National Council for Voluntary Organisations and the Charity Commission announced that they had agreed to draw up joint guidelines to help charity trustees to decide on pay levels for senior staff.

MPs took an interest in the issue and the Public Administration Select Committee launched an inquiry into charity chief executive pay. Giving evidence at an oral hearing as part of the inquiry this month, Martyn Lewis, chair of the NCVO, told MPs that the charities named by the Telegraph had suffered a fall in donations as a result of the publicity.

Earlier in the year, research compiled by Third Sector into the highest paid 100 charity chief executives found that David Mobbs, head of Nuffield Health, the charity that runs a chain of hospitals and gyms, topped the list. He was paid an annual salary of up to £860,000 in 2011.

It later emerged that Philip Sugarman, chief executive of the mental healthcare charity St Andrew’s, received a pay increase of more than £100,000 to £653,000 in 2012/13. The charity subsequently said that Sugarman’s salary will drop to £325,000 in 2013/14 as part of a planned reorganisation of his duties.

At the other end of the salary spectrum, charities were criticised for allegedly exploiting internships. A report, Interns in the Voluntary Sector: time to end exploitation, published in May by the union Unite and the campaign group Intern Aware, called for unpaid internships to be abolished because of the risk of "creating a society that discriminates against those who are unable to intern for free for long periods of time".

The report recommended that large national charities with turnovers of millions of pounds should pay interns the minimum wage, and small charities with fewer than 10 staff should avoid recruiting interns and rely on volunteers instead.

In November, Unite wrote to HM Revenue & Customs asking it to investigate whether some of the UK’s largest charities were breaking the law by not paying the national minimum wage to interns.

Controversial "zero-hours" contracts – an arrangement where a person agrees to be available for work as and when required, but where no particular hours or times of work are specified – hit the headlines in the summer with a government review and calls from unions for such contracts to be made illegal.

Research from the Chartered Institute of Personnel and Development research found that a higher proportion of employers used zero-hours contracts in the voluntary sector in comparison with the public and private sectors. The Tate, the charity and art gallery in London, defended its use of such arrangements when it was revealed that its trading subsidiary, Tate Enterprises Ltd, employed staff on zero hours contracts.

Despite the continuing difficult financial environment, morale in the sector was up from an all-time low in 2012, according to the annual Charity Pulse survey, published in July.

The survey by Third Sector and Birdsong Charity Consulting found that the biggest changes among employees were a seven percentage point rise in the proportion who say they are well informed about what is happening in their charities and in the proportion who say their pay is competitive. There was also a five percentage point rise in the proportion of respondents who feel safe about challenging the way things are done in their charities.

Big appointments during the year included Mark Goldring, former head of the learning disability charity Mencap, joining Oxfam as chief executive, and Javed Khan, who will leave Victim Support in the spring to become chief executive of the children’s charity Barnardo’s.


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