A new study entitled ‘Taken on Trust’, published late 2017, provides an excellent, up-to-date profile of charity trustees in this country. Produced for the Charity Commission and the Office for Civil Society by a consortium led by Cass Business School and the Cranfield Trust, the report is based on a national survey of a random sample of 19,064 trustees. The survey centred on asking trustees how they felt about their role, their awareness of their responsibilities, how effectively they thought they fulfilled their role, and what support and guidance they used to help them perform their role. The findings were rather mixed, sadly. Here’s my summary of a dozen or so of the main points that I noted:
–Numbers of trustees:- Just under a quarter of trustees sit on more than one charity board, with the overall average being 1.35 boards per trustee. Allowing for this multiple holding of positions, there are probably a grand total of about 750k trustees in England and Wales – which is a slightly lower figure than the estimate of nearer 850k trustees previously indicated by the Charity Commission. 80% of charities have an income of under £100k and their trustees make up 70% of all trustees in total. The clear picture is that this country has an army of trustees but most of them – more than half a million people – are spending their time on tiny or very small charities.
–Number of trustees to employees (and volunteers):- Amplifying the last point, the survey identified that at about 80% of all charities trustees have no staff or volunteers at all to support them in the work of the charity. In such cases the trustees play both a governance role and an executive (operational) role. I think this is a hugely significant statistic and rather makes a mockery of there being one fixed definition of a trustee for all sizes of charity and the central notion in traditional charity governance that stresses a separation between trustees and employed executives. Also, I hope it suggests that many in the sector should perhaps not be so against some charities in future possibly switching to a ‘unitary’ style of board combining non-execs with some executive staff (as used by many other types of non-profit bodies e.g. housing associations).
–Trustee demographics:- No real surprises here. Trustees were found to be overwhelmingly male (64% vs 35% female); ethnicity is almost completely white (92%); average age is 60-62 years (older than the UK population as a whole, but similar to that for listed company directors); most are professional/well-educated – 30% have a postgraduate qualification and 60% a professional qualification; and most are financially well-off – 75% have an income above the national median. The gender profile for charity board officers is even more skewed to males: 71% of chairs and 68% for treasurers.
–Board size, meeting frequency and trustee length of service:- Most boards comprise 4-10 trustees (73%), with smaller charities typically having 3-5 trustees and larger charities having 6-10 trustees. Two thirds of boards (66%) meet between four and six times a year, with four times a year being the most common frequency (31%). Charities are evenly split in terms of the use of a fixed term of office for trustees (49% using, 47% not using): this high proportion of non-users surprised me as they are certainly not in accordance with the new 2017 Charity Governance Code which prescribes a limited term and not usually more than nine years.
–Length of service and turnover of trustees:- Just under half of all trustees have held their role for over five years, with the proportion being higher for smaller charities and steadily decreasing as charities get larger. The numbers of trustee roles taken up and those relinquished are roughly in balance at about 120k a year: this is a welcome finding as it suggests that overall there is a healthy inflow of new people taking on new trustee roles.
–Payment of trustees:- Just 1.6% of all charities were found to pay their trustees for their role. Unsurprisingly, the incidence of making payment rose as charities get larger, with 7.4% of larger charities (above £5m income) reporting some use of trustee payment.
–Motivation for being a trustee:- The biggest driver for becoming a trustee (57%) is having some form of ‘personal interest in the charity’ – which, for a large minority, is based on their being a current or previous user of the services provided by their charity. Two other key motivators are possessing relevant skills to help the charity (50%) and a desire to give something back to society (45%). After appointment, a full 90% of trustees find their role as a trustee ‘very rewarding’ or ‘rewarding’ – which is a very positive finding.
–Recruitment approach followed by trustees:- A telling, worrying statistic that came from the survey is that a full 71% of all trustees reported that they were recruited through an informal, rather than formal / open process – usually consisting of a direct approach by the chair of the board or other existing board members. Amongst small charities, fewer than 20% of trustees were recruited through a formal process and even amongst the largest charities still just 50% of trustees gain their roles through a formal process.
–Time spent on trustee work:- On average trustees were found to devote 4.8 hours a week to their roles – with similar results for chairs and treasurers (but this does not include time spent by trustees on operational activities which may be significant for trustees of smaller charities, as referred to above).
–Awareness of responsibilities of a trustee:- When recruited, the vast majority of trustees across all sizes of charity believed they were ‘fully’ or ‘mainly’ aware of the duties and responsibilities of being a trustee. This is a surprisingly healthy figure, but the statistic is based on trustees’ self-belief rather than objective testing: when the survey probed trustees’ awareness of some more particular legal responsibilities – for example, whether the board as a whole or just the chair has responsibility for submission of their charity’s annual return – a significant minority got the answer wrong. Just 34% of trustees were provided with a job description that set out the duties of being a trustee. Ignorance is deepest amongst smaller charities, amongst whom a significant minority of trustees – nearly one in five – admitted to being only partially aware or not aware at all of their legal responsibilities when taking up their role: this clearly suggests the need for stronger education and training programmes aimed at and tailored for smaller charities.
–Guidance sources used by trustees:- For guidance in exercising their duties, trustees mostly turn inwardly to their fellow trustees or chair (72%), or they consult the Charity Commission’s website (71%) or its publications (60%). Interestingly, trustees don’t look much to their charity’s CEO (just 19% consider the CEO to be a very important source versus 37% for the chair). Only 12% reported receiving any kind of formal induction training and just 6% reported receiving any training from any external professional provider (including sector infrastructure bodies like the NCVO or ACEVO). This strong reliance on internal guidance sources is disturbing and creates the serious risk that trustees develop a parochial, inward-looking mindset with a lack of independent thinking or external challenge.
–Skills on trustee boards:- The biggest skill gaps were found to be in the areas of legal knowledge, marketing, digital/online skills, detecting/avoiding fraud, fundraising/campaigning and trading/commercial acumen. The strongest skills were found to centre around financial/accounting skills, governance, knowledge of clients’ needs, and service delivery skills. Unsurprisingly, amongst smaller charities the strongest skills tend to lie around service expertise with the weakest skills being the specialist functional areas like law, marketing and commercial skills.
Overall, from all these findings, it was great to see some definite positives about trusteeship – not least, the healthy numbers of people wanting to be trustees and the personal enthusiasm with which trustees generally perform their role. But, on the other hand, the research confirmed many serious issues, of which the main ones which struck me included: how the sector is so dominated by very small charities with so many trustees having no staff or volunteers to work with them; the shocking lack of demographic diversity amongst trustees; the informal/casual way in which most trustees are recruited and the limited induction training most receive; the incomplete awareness of most trustees regarding their legal duties; most trustee boards lacking several functional skills to do their job; and trustees mostly relying on internal and informal reference sources. As mentioned many times, these problems are most acute amongst smaller charities.
None of these points, though, are surely news to the charity sector and many areas of needed action are obvious – both in the hands of charities themselves and at an aggregate level by the government and/or institutions serving the sector (who need to work together more collaboratively). This report itself posited some two dozen recommendations. Nothing earth-shattering, but examples of some of its more significant proposals are: for boosting trusteeship and diversity, creation of a widespread, multi-stakeholder campaign ‘selling’ trusteeship to more sections of society, and creation of national and regional registers of trustee vacancies. To boost trustee advice and support, the report recommended: a cross-stakeholder review – led by the Charity Commission itself no less – of the specific support needs of each size category of the charity sector; the creation of ‘ready-made’ guidance templates for charities’ policies and procedures; and encouraging professional bodies to support their members to offer more support to trustee boards.
The report also – significantly – stressed that the Charity Commission should review, enhance and expand its own look-up range of digitally-based content for reference by trustees (based on joint design and development with sector infrastructure groups and professional bodies) and, specifically, should encourage the sector to look at investigating new channels of information support for trustees, including apps and e-learning media. The Charity Commission was also urged to look at collecting email addresses for all trustees across all charities, so it could begin a national direct information service with trustees everywhere (good luck with that idea!).
These proposals join other surveys and reports on the same subject which have been done over recent years. Not least, of course, in February 2017 there was a review by the House of Lords’ Select Committee on Charities (Stronger charities for a stronger society). That came up with 100 conclusions and 42 recommendations covering a wide range of issues about UK charities. In the area of trustee skills and training it echoed much of what the latest Charity Commission report said, including stressing the need for cross-stakeholder review of the specific support gaps for smaller charities and ensuring charities develop stronger induction processes for new trustees. For helping to boost the diversity of trustees, a strong recommendation was that the government should look at introducing a statutory right for employees of larger organisations to take time off work to be a trustee: this specific idea was also supported more recently in Sir Stuart Etherington’s policy ideas for the future of the UK’s third sector (Voluntary action: a way forward) published with the Cass Centre for Charity Effectiveness, but no matter, because also recently the government indicated that it does not support this idea.
Trusteeship is a truly wonderful strength of this country (I’m proud myself to have 20+ combined years’ trustee experience across several charities over recent years) but, as the Commission’s Taken on Trust study reminds us, it still suffers a lack of professionalism in several areas. The new 2017 Charity Governance Code will itself – hopefully – do a lot to help raise professionalism, but we also need to take note of the findings from both the Commission’s latest report and that of the House of Lords Select Committee.
However, it’s a pity (in my view) that there weren’t more radical or wide-ranging ideas in those reports: for example, both studies hung on to the old conventions of not mixing trustees with any employed executives on a board and opposing payment to trustees (which could help to attract a wider range of people to be trustees). There was not enough stress on certain obvious requirements like improved signposting or kite-marking of external advice sources available to trustees or major opportunities like developing a basic/national online training course and national (basic) ‘expected’ qualification for new trustees, and setting up a dedicated professional cum networking association to serve trustees. Never mind even more radical ideas like promoting guideline ‘quotas’ or positive discrimination on charity boards in favour of new trustees from under-represented demographic groups; defining a less onerous legal role for a trustee of a very small charity compared to a trustee of a large charity (for example, just requiring a couple of lead/accountable ‘officers’, rather than half a dozen fully-fledged trustees); and the Charity Commission acting more strongly to promote the collaboration or actual merger of micro charities serving the same cause.
The ‘Taken on Trust’ report was a very welcome and very illuminating study but, at the same time, the Commission surely unleashed even greater expectations by people for it to step up and do more to help address the weaknesses about trustees. Unfortunately, with its budget frozen at £20.3 m until 2020, the Commission appears not to have enough resources to be able to deliver on this stronger role: so I do hope the sector – particularly large charities – will support the recent call from the Commission’s new chief, Helen Stephenson, for a small levy to boost her budget. If not, try a tax on many large charities’ high levels of ‘unused’ reserves: that would yield a lot more than the modest £7m Stephenson hopes from from her planned levy! Otherwise, I fear we will still be here talking about the same problems of trustees in another five years’ time !
I wish you well with achieving professional trusteeship in your charity! As ever, if I can be of any professional assistance (for example, planning, recruitment or development of your trustee board, or its effectiveness) – do get in touch with me.
Mike Owen, CEO of Owen Morris Strategic
Contact: Tel: 01886 881092 or Email me at: firstname.lastname@example.org
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