7 'common sense' rules of governance from Morgan Hunt’s round table discussion
 

Morgan Hunt played host to charity CEO’s to discuss how charity boards can become a more effective and informed Trustee body.

Lead speaker Suzanne McCarthy outlined her 7 ‘common sense’ rules and led discussions on what is about to change that will affect how charities operate for good.

Change is in the air. A new code from the Independent Fundraiser Regulator will be published in July. And that’s not all. Down the line new legislation in data privacy will change the dynamics of fundraisers’ relationships with donors.   

In Morgan Hunt’s breakfast roundtable we heard that the donor’s voice got lost under the strong fortissimo of fundraisers’ orchestral needs but how that must change with consent up front.

Suzanne McCarthy, Chair of Depaul UK led an inclusive discussion with our charity CEO’s; we listened to her down to earth advice on the importance of priorities and Trustees responsibilities; why relationships matter, how boards need to ensure that they work as an effective and informed body, where charity boards need skills to function properly, and why empathy alone is sometimes not enough.

The seven rules of governance will become even more important as charities get set to overhaul their operations in line with the new code of practice and new regulation to follow:

 

Governance fit for purpose

The first of the seven rules is grounded in a common problem that all charities face, working with volunteer Trustees.

Difficulties arise from working with a board consisting of volunteer Trustees which is much harder than working with boards made up of paid employees. Charity boards may only meet up to 6 times a year for a few hours at a time, with Trustees removed from the day to day operations of the organisation.

Beneficiary Trustees may have great passion for the cause, but might not possess the functional skills and experience for the task. Yet a charity board must ensure that adequate governance is in place and that their Trustees are fully conversant with their wider responsibilities.

Furthermore Trustees need to realise that everything done in fundraising is now done in their name and that good practise in Governance also demands constant review.
 

The function of the Chair

The Chair’s main function is to set the Board’s tone and direction to ensure Trustees clearly understand their function. The success or failure of a Trustee can depend on this.

A key point made was everything that a charity organisation does must be tied to value. It’s not about the money but about value, and Trustees must have a feeling and a kinship for those values.

This is not the mission statement but about what a charitable organisation is there for. We heard that if this cannot be articulated clearly then the charity will have difficulties with Trustees focusing on what they are supposed to do.

Value driven Trustees are supposed to act in the interest of the charity and their beneficiaries; to protect and safeguard the charity’s assets, and act with reasonable care and skill. They need to understand what the charity is there to do; the charity’s purpose, what the charity does and what it wants to achieve.

 

Trustees – not just for Christmas

It was made clear that being a charity board Trustee is not a half-hearted occupation. We heard that it’s not something that you can pick up and leave, like a puppy. It’s not just for Christmas, but a very serious responsibility that requires long term commitment.

The appropriate mix of expertise to have on board depends on the skills required to function and does not need to be a client beneficiary, unless it is written into the constitution, but you do need their voice.

“We want Trustee boards to genuinely understand the challenges that beneficiaries face. But we also need to move to more professional boards - the two things have to go hand in hand” said McCarthy.

Participating charities discussed ways in which to get understanding. We heard that sending Trustees out in the field or on a beneficiary project so they could understand the values and see what it is they are delivering was a great way in which to build this understanding. Trustees can get the chance to bond together and meet with staff. So it’s possible to get professional boards closer and engaged with beneficiaries.

Common to a lot of charities is the difficulty in recruiting Trustees and often the reason why charities only have beneficiaries on boards of whom may not have the necessary skills required. We heard ideas of non-remunerating ways of engaging people and keeping in touch, indeed with younger members, a chance to acquire skills and experience that they could take with them to new employers.

 

Size matters

Charity boards of the right size matter, particularly when boards have a number of different committees. Trustees must appreciate the requirements of confidentiality, collective responsibility and behavioural standards even outside of meetings.

But it was emphasised that if it is a committee that is covering the issue the Trustee cannot think ‘oh that’s already done’, committees do not let Trustees off the hook.  They still have responsibility for what is going on.

 

Trustee appraisals

Described by one delegate as a weak link many Trustees are still not appraised. We heard about the benefits that an appraisal system has in directing and in relationship building.

Yet a number of our participating charities already had appraisals in place. They were holding reviews and appraising Trustee performance with annual objectives for each member of the board, reviewed at the end of each year. Some participants were positive about how it was helping to professionalise chairs and boards. Others talked about the brick wall that they faced in trying to formalise their Trustee arrangements.

Rule number five is that Trustees should be regularly audited and appraised as individuals and as a collective – ideally on an annual basis.

 

It’s all about Priorities

Since Charity boards do not meet that often a meeting agenda needs to be focused on priorities.

The point was made that work is not done in committee meetings but afterwards. Charities were advised to work on getting decisions made at meetings. Important issues should be given sufficient time and space, commensurate with the level of decision taking required. For example large scale investment decisions should not be trumped by low level irritations.

And as not every Trustee will read every word of the agenda paper an Executive Summary has to be good enough to communicate the priorities. And that Executives and team members should be able to present their agenda to the board in a clear and concise manner.

The first hour of a charity board meeting is the most important. Board papers should be written in clear English, be accurate and contain good and timely performance management data. The requirement for the Trustee should be explained clearly from the beginning of the paper.

Finally always appraise meetings. Sit back and ask whether it went well. Question whether you covered everything that you intended to.
 

The partnership - Chair and CEO

The last of the seven rules was about the relationship between the Chair and the CEO. This must be a partnership and it requires trust, respect and openness. Chemistry counts and the relationship is crucial to get right.

The Chair and CEO must have a robust relationship and trust each other; working together towards strategic goals as a collective, effective and informed Trustee body.

For more information email our Senior Appointments team.

We ask, is this war time code for a post 16 education funding crisis?

Fragile in this context is what a business would call cash flow. In other words the finances are in a fragile state.

To get this ‘fragile’ situation sorted the Government wants all colleges to take part in area-based reviews.  Post 16 reviews will be taking place throughout the country with the overall aim to get them into better shape or ‘more robust’, less ‘fragile’.

What that shape will look like is yet to be decided but what is clear is that the government sees this as a money saving exercise and not as a funding crisis; any further money will not, at this stage, be coming from Government coffers.

To be fair the Government is not looking to cut current funding, although there have been cuts already; what is clear is that they want funding better managed with better education outcomes; they want cake.

What has been acknowledged so far is that post 16 colleges, in general, are in a pickle and the ‘fragile’ talks and area reviews give an indication to the strategic mind-set behind recent activities.

On the table as an outcome of the reviews is curriculum rationalisation; restructuring is not ruled out and bubbling in policy background is talk of a specific strategy for technology, more local control and an education emphasis that leads to employment. All good you say, but, here’s the big one, there will no doubt be compromises.

Outcomes may lead to Government intervention and that could be significant for some colleges.

Furthermore the ‘fragile’ focus is in truth about money and Government is not envisaging any more, this is not the purpose of the exercise but they do want support from businesses through local partnerships.

An overall assumption from the area reviews is that colleges will be saving money and thus any change will be funded from future surplus from the savings, local business partnerships and local authorities.

Local authorities will be expected to provide money too from their skills budgets so colleges can make the changes.
 

What could this mean for post 16 colleges

The overwhelming message taken from recent talks and announcements is ‘change’. That change will depend on the catchment area that the college is in, their combined curriculum and their student population.

If it involves curriculum rationalisation then compromise will have to be made here.

Some courses cost more than others and the combined effect of a rise in total cost can dramatically change the marginal cost of a student and college finances so the cost accountants will no doubt move in to look at the marginal cost of all student courses and how economies can be made.

Whole area strategies will be under discussion looking at how collective colleges can achieve synergies. The emphasis on technology will see technology specific institutions set up where economies of scale can be gained thus saving other colleges the huge investment in IT.

Examples are already being made across the country; in North East Norfolk and North Suffolk five colleges are collaborating following a review earlier this summer. Between them they were facing a deficit of over £1.3m. The financial challenge was clear but when this was combined with a falling college age population in the area it became a ‘no brainer’ decision to merge.

The same with three colleges in east London that were facing £3m in cuts and accumulated annual losses of £4m they too decided to join forces.

Change is always unsettling; for staff, for students, for parents and for the local community who rely on their college. Often decisions are taken within a vacuum without taking into account the impact on travel, access, accommodation and recruitment. The latter as Morgan Hunt knows only too well, being a major consideration for any college.

As all reviews need to be in by March 2017 there is much to think about and debate on how the ‘fragile’ nature of colleges can be resolved and the compromises to be made. Collaboration is what is being sought and a vision on what the area needs as a whole, and as a review can be triggered by a proactive proposal it’s worth getting involved.

The bar is being raised as employers compete to get the best people on board

Organisations and their suppliers are coming up with all kinds of benefits to entice candidates to join them and to encourage employees to stay. But since different benefits have different perceived values across diverse working groups, organisations now have to respond to their varying needs.

One such phenomenon is up to four generations of individuals now working together with varying roles and responsibilities in their management and operations. These employees will have uniquely different needs and wants in the workplace that employers should ideally address across the board.

So if the bar is being raised what then can employees expect from their employers. As recruiters we see quite a lot of different packages being offered and after a quick scoot around our different industry sectors we’ve gathered together some of the more standard and some non-standard benefits being offered. What’s clear to us is that across the sectors, industries have different norms so before you request any perk, make sure it is appropriate.

Standard Employee Benefits

At the basic level you should expect a workplace environment that rewards its workers for hard work and success and for this to be commensurate with the job, level and industry. You should have the opportunity to expand your personal and professional capabilities, advance in your career, and enjoy the resulting benefits of this.

In our standard group of benefits you should expect at least one or a number of these:

• Insurance, health and wellness including private medical and dental insurance, vision insurance and eyesight testing, occupation accident insurance, and accidental death and dismemberment insurance, specs voucher;
• Financial and retirement benefits, such as pension and retirement plan, performance bonus, equity incentive plan, profit share, and stock options;
• Family and parenting including maternity or paternity leave, childcare vouchers and elder-care assistance, and reduced flexible hours;
• Vacation and time off, such as paid holidays, sabbatical leave, and sick days;
• Discounts, such as employee discounts, company car, and employee assistance program;
• Professional support including diversity program, job training, and tuition assistance for graduate studies

Of course, each employer will have specific salary and benefits packages for its different groups of employees. You should consider the whole package being offered by the prospective employer before accepting a job and compare this with a similar company.

Tip: Look at jobs through recruiters like Morgan Hunt for the benefits packages offered by the employers.
 

Non-standard Employee Perks

Many organisations are also providing their employees, from senior executives and managers through to administrators, with workplace-specific perks. These non-standard perks are usually designed to address the unique workplace conditions, thus, providing the employer with the opportunity to increase its retention rate.

In Morgan Hunt’s non-standard group of benefits we came across these more than once:

• Fresh fruit days
• Birthday day holiday
• Mortgage savings fund
• Early release on Friday
• Christmas party
• Summer BBQ
• Free beverage
• Free breakfast
• Final salary or above statutory contribution pension scheme
• Charity fund raising days
• In-service insurance, income protection, and death benefits
• Gym membership
• Travel loans

Some of our perks are law-mandated benefits which means that the employer must provide this and you are within your right to demand these benefits as part of your contract of employment i.e. pension. Some work-specific perks may be part of your employment package others will be discretionary.

Also remember that some perks are subject to P11D, which means you may need to pay tax on the value of the benefit so you need to think carefully on these before accepting the perk.

If you know what other organisations are offering you can lobby yours to consider offering these too but before going through this process it is always worth sparing some thought to the benefit that the employer would get from offering you the additional perk. That way it will be easier for them to justify the additional expenditure for example for reasons of; safety, productivity, and enjoyment factors.