Reflections on the charity sector: Scrutiny of charity leaders

Helen Stephenson’s fifth reflection at the recent Treasury Exchange speech, which she gave to mark the end of her term as CEO of the Charity Commission, touched on what she called the ‘disproportionately intense, unpleasant, and unfair personal scrutiny’ which charity leaders increasingly face, from both within their charities, and externally.

Tora Pickup and I have been considering this, following the discussion we had yesterday when we focussed on the Commission’s attempts to balance its regulatory function as between investigation and enforcement, and support and guidance.

Charity is engrained in the very fabric of our society, weaving together a tapestry of compassion, generosity, humanity, and social impact.? Particular causes, challenges, projects, individuals, and communities spark a passion in all of us which is personal to our background, circumstances, and beliefs.?

Central to the success of the sector is that the public, donors, stakeholders continue to have trust and confidence in what charities stand for, what they do, what they achieve.?

When people give, they give in the expectation that their time, money, or other resources will be used responsibly, effectively, and indeed ethically to achieve a positive outcome.? Similarly, beneficiaries of charities place their trust and confidence in charities to provide support, assistance, and to have an impact on their lives and their communities.

Sometimes this passion for what we believe in, can, if we feel charity is not meeting the high standards we expect of it, be directed negatively and vociferously at charity leaders.? Whilst Helen Stephenson was right to point out that as regulator the Commission’s position is not to spare charity leaders scrutiny for the decisions they make, or the way they work, the spotlight on them has as we have all seen intensified in recent years, particularly with the explosion of social media as a means for communicating without barriers.? At times this has, arguably, stretched beyond legitimate scrutiny and strayed into the very personal, or become overcharged and divisive.?

When we talk about charity leaders, we mean not only paid employees, particularly those in a senior management role, but also charity Trustees.

One should not forget that charity Trustees generally act in a voluntary capacity (and we will consider this in our next article).? They give of their time, their skills, their expertise, and experience for free.

Whilst not detracting from the need to hold charity leaders to account, we cannot risk putting off candidates from putting themselves forward for leadership of charities, not only in a management role, but also in a Trustee role.

Without question, most charity leaders (including Trustees) are driven by purely altruistic motives, but with a decrease in public trust and confidence in charities, they have seen an ever increasing focus on what they do and how they do it.?

Concerns around “excessive” pay of CEOs of charities is the source of endless debate (and not one for today), but the role of CEO of a large charity is far from straightforward, and involves overseeing complex operations, sensitive work, supporting some of the most disadvantaged people in our society, or operating in challenging environments here and around the world.

For (generally) volunteer Trustees, the greater focus on their duties and responsibilities, the ever increasing and complex regulatory burden not just from the Commission but other regulators, the potential risk of personal liability, and a perceived change in approach from the Commission which can sometimes feel as though the focus is on regulation rather than advice and support, means that now more than ever, the role is not one for the faint hearted. ?

Trustees need ever more to call on professional advice and support to enable them to operate effectively, efficiently and to ensure they continue to meet the expectations of the public and the regulator. The view from some of our clients is that the ‘voluntary’ world they operate in no longer looks or feels the same, and being a Trustee has had to become ever more “professional”. This means Trustees do come to us on a more regular basis, as specialist charity lawyers, to seek guidance on the increasingly complex regulatory and legal framework within which they operate, and we’re delighted to be able to provide that support.? ??

However, there is already a crisis in terms of Trustee recruitment, particularly for smaller or local organisations, with many Boards struggling to recruit, and this increased negative scrutiny does risk exacerbating this problem further.

The Charity & Not for Profit team at Higgs LLP see it every day with our clients and regularly provide support to them in terms of the recruitment, induction, and ongoing development of Trustees.? Often, we have to work with charities to change their constitutional structure to ensure Trustees are appropriately protected, for example from personal liability, or to change their governance structure where they cannot continue to operate as they are.

And so, whilst charity continues to ignite a passionate response in society, and with charity leaders rightly being held to account where things go wrong, what we need to ensure we do not do, is as Helen Stephenson comments, make charity leaders feel that they are “on trial, just for doing their job”.? And therein lies the inherent tension.

We’d be really interested to know whether you’ve experienced this struggle in practice, whether as a charity leader or from the outside. It feels like resolution of this difficulty is going to play a key part in the continued and successful development of this increasingly professionalised sector.?

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