Who governs our charities?

Today sees the release of the most systematic survey of charity trustees to date. The findings are at once concerning and encouraging. They highlight some significant shortfalls in charity governance but they also point to solutions that are, for once, very obvious and actionable – at least at the level of individual boards.

The report is based on analysis of the data that the Charity Commission holds on trustees and the results of a survey asking trustees about their perceptions.

Key findings are that:

Diversity is a big problem

Boards are typically ‘pale, male and stale': 92% white, two thirds are male and the average age is 55 – 64. Three quarters earn above the national median income.

There are some significant skills gaps

The lack of demographic diversity is echoed in terms of skills and professional experience. Boards have insufficient skills in key functional areas such as marketing and digital

There are fewer trustees than we thought

Previous estimates by the charity commission suggested that there are 850,000 trustees. In fact there are only 700,000. Many of these trustees serve on more than one board, and the average is 1.35 board positions per trustee

Most trustees are recruited informally

Over 70% of trustees are recruited through informal channels. This is really problematic: given the narrow background from which trustees are drawn, the fact that so many trustees are recruiting fellow board members from their own networks just perpetuates the lack of diversity and expertise on boards.

Why this matters

Being a trustee is a voluntary position, so perhaps we should just be grateful that anyone is putting their hand up for the job? But good governance is too important to leave it at this. Boards hold the executive team to account, and offer it much needed support; they ensure that the beneficiaries needs are prioritised, that charity is run sustainably and that it remains true to its purpose. A good board is key to any thriving charity, and conversely, a poor board can bring a good charity down.

Boards will only make good well rounded decisions if the trustees have a range of skills, experience and perspectives. When trustees share very similar backgrounds there is a:

Lack of legitimacy - charities work with marginalised communities who are often excluded from positions of power. If the boards of these very same charities do not include trustees from their communities, what legitimacy can they have?

Groupthink - it is well documented that diverse groups make better decisions. If everyone shares the same perspective they will also share the same blind spot

Lack of leadership - the world is changing fast, and charities need leaders with the right skills and expertise to help them seize opportunities and navigate difficulties. Digital is a good example of this. It emerges from the research as one of the functional skills most lacking at board level. Another recent research report found that over 70% charities say that their boards have low digital skills, and that this constrains the charity’s ability to develop.

Happily, the solution is within reach...

 Trustees enjoy their role

90% of trustees say that they find their role rewarding and 94% say that the role is important to them. Being a trustee brings personal and professional benefits so it should be possible to attract a wider group of people.

Open recruitment is effective

Our experience at Reach is that if you recruit purposively, and invest time and effort, even smaller charities can attract good trustees who will expand the range of skills, experience and diversity of their board. And once recruited, these trustees will have a very positive impact. 87% of charities who recruited through our service say that the new trustee strengthened their governance, and 95% say that the new trustee increased the diversity of skills and expertise on the board.

...but more charities need to up their game

So why do so few boards recruit openly? The survey does not ask this question. We find that it is often down to culture (the board has always recruited informally), confidence, or lack of time. Whilst lack of time may be a real constraint, it is not a good reason. The board chooses how it prioritises its time, and ensuring that they have the right team to carry out their role effectively is surely one of the most important things that they can do. And doing it well is likely to save time in the end. 

So what next?

There is not a one-size-fits-all solution. As the research shows, issues vary with size. 80% of charities have no staff at all, and the trustees do the (operational) work as well as the governance. Being a trustee for Oxfam is very different from being a ‘hands-on’ trustee of a local scout group or village hall and recruitment methods (and target audiences) will be different for both. This is one of the reasons I am unconvinced by some of the report’s recommendations – for example a national register of trustee vacancies.

However, a more joined up approach by those who support charities to recruit trustees could certainly pay dividends. Making it easier for charities and prospective trustees to find each other, via a more joined up marketplace would be start, and clearer more consistent advice on how to recruit would help too. Reach is part of a working group exploring how we can develop a more a collaborative approach to encourage and support more charities to take an open approach to recruiting trustees. This is not just possible, it is essential: charities need boards with a breadth of skills and experience, to earn legitimacy and to provide good leadership.

Read more 

The research: The full set of reports can be downloaded here

Reach Volunteering was a member of the research advisory group. The Charity Commission will also be giving free access to all the data sets soon.

Services:

 Reach Volunteering runs a trustee recruitment service that is free of charge to all charities with a turnover of under £1 million. Last year we recruited 450 trustees. Find out more here

 Reach also runs a programme to help boards recruit trustees with digital expertise - see Building boards for a digital age