The state of charity trusteeship today: recent research shines a welcome but sobering light on action still needed to improve trustee professionalism

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:

Copyright of Owen Morris Partnership

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The new 2017 Charity Governance Code: getting to grips with its key principles and major changes

The new Charity Governance Code is now in force.  Launched in July 2017, this valuable framework gives a well-crafted set of principles to guide and encourage good, progressive governance and Board leadership by all sizes of charity across England and Wales.  A document like this can never be perfect or complete to suit everyone (see my Feb 2017 post on this blog for some previous comments by me), but every trustee should read and follow the Code.  However, there’s quite a lot to read and remember in the Code itself.  So, as a way to help recall its contents, I use the acronym ‘PLIMBDO‘ (a bit inelegant, I know!) for the lead words of the Code’s seven principles and a list I’ve drawn up of the dozen, more significant changes that the Code contains.  Below is a checklist/summary of those points:

This new Code, although it is based on trustees’ basic legal duties, is not itself a formal mandatory code but rather a framework of recommended principles and good practice.  As such it invites charities to ‘apply’ rather than ‘comply’ with its recommendations but expects charities to ‘explain’ where/if their actual approach does differ (including a short overview in their annual report).  The Code’s ‘foundation’ is the assumption that a charity’s trustees are committed to their charity’s cause, know what is their charity’s ‘public benefit’ and, crucially, know and understand the legal duties and responsibilities of being a trustee (these points could perhaps have been better labelled as a ‘core’ principle alongside the other seven, as they are quite vital but often some trustees lack such knowledge).

Building on this ‘foundation’ are seven (other) principles.  Using my PLIMBDO acronym, they are, in brief, as follows (in the same order as they are described in the Code but with a bit of paraphrasing in a few places to make a few points clearer):

1.Purpose (organisational purpose):  The Board is clear about the charity’s aims/objects and ensures that these are being delivered effectively and sustainably.                       2.Leadership:  The Board provides strategic leadership for the charity to achieve its defined aims, including definition and promotion of vision, values and strategy.      3.Integrity:   The Board acts with integrity, adopting values and creating a culture which help achieve the organisation’s charitable purpose.  The Board notes the importance of the public’s confidence and trust in charities and trustees undertake their duties accordingly.   4.Management decision-making, risk and control:  The Board makes sure its decision-making processes are informed, rigorous and timely and that effective delegation, control and risk assessment and management systems are in place.                                        5.Board effectiveness:  The Board’s culture, behaviours and processes are effective and board members work well together as a team, strongly led by the Chair.                                 6.Diversity:  The Board comprises individuals who have a variety of skills, experiences, perspectives and ways of thinking. The charity overall promotes equality and diversity.                                                                                                                                           7.Openness and accountability:  The charity is open in its work and transparent and accountable to its various stakeholders and the public at large.

Within these principles, here’s a summary list of the dozen areas of specific practice recommended in the Code which struck me as particularly noteworthy in terms of being new or receiving greater emphasis compared to previous guidance.  I identify the relevant sections/clauses from the Code and quote close to the actual wordings used there:

More stress on measuring impact:  The Board should evaluate its charity’s impact by measuring and assessing results, outputs and outcomes  (1.4.2).                                            –Greater readiness to consider partnerships, mergers or closing down:  Trustees should consider the benefits and risks of partnership working, merger or dissolution if other organisations are fulfilling similar charitable purposes more effectively or if the charity’s viability is uncertain. (1.5.2)   (This is quite a challenge to the charity sector, I’d say!)                                                                                                                                     –More stress on the role of Chair (and vice chair) in ensuring Board effectiveness:   The Chair should provide leadership to the board with prime responsibility for ensuring it has agreed priorities, appropriate structures, processes and a productive culture and has trustees and senior staff who are able to govern well  (2.4.2).   Also, the Chair …… should plan the Board’s programme of work and its meetings, making sure trustees have the necessary information, time and space to explore key issues and reach well-considered decisions.  And the Board should have a vice chair or similar who can provide a ‘sounding board’ for the chair and serve as an ‘intermediary’ for the other trustees if needed  (5.5.2 and 5.5.3).                                                                                                  –Greater diversity in Board composition and Board viewpoints:  Boards should try to recruit people who think in different ways, as well as those who have different backgrounds (rationale for principle 6).  The Board should recognise, respect and welcome diverse, different and, at times, conflicting trustee views  (2.5.2).   The Board should make a positive effort to remove, reduce, or prevent obstacles to people being trustees….  (6.3.2)  –Recommended trustee board size and normal term limit of nine years:  A board of at least five but no more than 12 trustees should typically be seen as good practice (5.6.2).  A term limit of usually no more than 9 years is recommended:  any extension should be clearly justified and explained in the trustees’ annual report.  (5.7.4)  –Importance of boards reviewing their performance and that of individual trustees:  On a regular basis a Board should discuss its ongoing effectiveness and its ability to work together as a team …. trustees should take time to understand each other and build trust. (5.5.4).   More formally, every year the board should carry out a review/evaluation of its performance and that of individual trustees, including the Chair.   For large charities (those with an income of £1m+ p.a.) every three years this evaluation should be done by external advisers (5.8.2).  Trustees should explain how the Board’s performance is reviewed in their annual trustee report (5.8.3).                                    –Greater stress on consulting and communicating with all stakeholders:  The charity should identify the key stakeholders with an interest in its work and make sure there is a strategy for regular and effective communication with them about the charity’s purposes, values work and achievements.  (7.5.1 and 7.5.2).  In particular, the charity should make sure there is suitable consultation with stakeholders when there are significant changes to the charity’s services or policies  (7.5.5).  (Stakeholders are defined widely, including:  users/beneficiaries, staff, volunteers, members, donors, suppliers, local communities and others).                                                                                                               –Use of a code of conduct to guide trustees’ standards:  Trustees should adopt and follow a suitable ‘code of conduct’ that sets out expected standards of probity and behaviour (3.4.1).  This clause exists in both the Code for small charities and that for large charities.                                                                                                                                                 –Need for clear guidelines on delegation of powers between the Board and senior management:  The Board should describe its ‘delegations’ framework in a document which provides sufficient details and clear boundaries so that the delegations can be clearly understood and carried out.  (4.5.2).   Again, there is an expectation that both large and small charities should follow this practice.                                                     -Use of a performance management framework by the Board:   The Board should regularly monitor the performance of the charity using a consistent framework and check performance against delivery of the charity’s strategic aims, operational plans and budgets.  (4.6.2).                                                                                                                                  –Use of benchmarking against similar organisations:   The Board should regularly consider information from other similar organisations to compare or benchmark the organisation’s performance.  (4.6.4).  Again, this is intended to apply for all charities.      –Need for a formal, transparent process for selecting new trustees:   There should be a formal, rigorous and transparent procedure to appoint new trustees to the board, which includes advertising vacancies widely  (5.7.1).  (No more the board Chair just tapping the shoulder of a close friend!)                                                                                           –Stronger stress on Board attention to risk management and qualified audit committee chair:  The Board should regularly review the charity’s specific, significant risks and make plans to mitigate and manage these risks appropriately.  The Board should ensure and regularly review the charity’s processes for identifying, prioritising, escalating and managing risks.  And it should formally review the effectiveness of the charity’s approach to risk at least every year and also describe the approach in its annual report.  (4.7.2, 4.7.3 and 4.7.4).  For large charities, where there is an audit committee, its chair should have recent and relevant financial experience, and the committee itself should have at least two trustees.  (4.8.2).

Overall, whilst this 2017 Code, as I commented in my previous post, does suffer some limitations and gaps (for example, it doesn’t consider alternative forms of governance structure like a ‘unitary’ board combining non-execs and exec directors, or the possible benefits of a charity paying trustees), it is set to become the key standard bearer for the charity sector.  I think it will make a powerful contribution to enhancing charity governance.

To read the full Code, visit the website:

I hope my above overview of key points is helpful.  As ever, if I can assist your charity in any way, do get in touch.

Mike Owen

Contact:      Office tel:  01886 881092

Copyright of Owen Morris Partnership

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14 ways to boost strategic planning in professional membership organisations, trade associations, and other member-based bodies

There was a time – not so long ago – when running a professional body, trade association or other member-based body was quite a peaceful life:  not much happened in the world that upset the reliable flow of annual subscriptions, running member activities, mailing out the magazine, and getting through the AGM.   No real need to think ‘strategically’.

No longer!  Most member-based bodies over recent years have struggled to keep up their historic membership levels and face a fast-changing environment with issues across many fronts – regulatory, political, economic, social, technological, and more.  Indeed, the actual role or survival of some bodies is being threatened as they face up to pressures like:  their profession or sector becoming much more international;  competition from other member bodies in the same sector;  how members can use social media and the internet to network and access free information; and technology threatening the future existence of many jobs.

Member bodies are needing increasingly to ‘re-position’ themselves to be of value to their members:  for example, providing lots more ongoing/life-time learning and vocational skills support (‘new’ professionalism);  providing specific online ‘communities of interest’;  promoting the values and goals of the body and involving members in campaigns, rather than just providing services to members;  acting as a curator of 3rd-party content;  and acting more as a facilitator for member-to-member (peer-to-peer) contact.

Unfortunately, the inherent nature of membership bodies can make dealing with such strategic issues hard-going.  Difficulties can include:  the very frequent changing of (elected) officers on an organisation’s board/executive committee (particularly the chair/president);  the lack of board-level experience often amongst many members of smaller associations’ boards;  a typical lack of outsiders on an association’s board which can cause conservative and insular thinking;  some board members seeing the association more as a ‘club’ or place to focus on boosting their own reputation;  and many associations not having enough time or skill amongst their staff to do much in the way of strategy.

Despite these difficulties, strategic planning is important to member bodies – not least because nowadays members and other stakeholders expect associations to be effective.  It’s important because, if done well, a strategic plan provides a stabilising anchor for managing the development of an association (useful for coping with those annual changes of board chairman, some of whom can sometimes have quite off-beam views!);  it can motivate and inspire people – from staff to members;  it ensures alignment across the different parts of the organisation;  it guides day-to-day operational decisions;  and it provides a basis for managing and appraising the performance of staff.

The problem is, although most member bodies today are aware of the notion of strategy and do some degree of planning, generally speaking, strategy is not an obvious strength of the membership/association sector.  This is partly understandable, of course, because such bodies are primarily in the business of representing and promoting a sector/profession, not being strategic paragons.  So, here’s a list of some particular ‘good-practice’ suggestions to help associations achieve stronger strategic planning, based on my 15 years in the sector as a CEO, director and facilitator/adviser:

1)Help your board members to be more familiar with strategy:- As members of association boards often have little experience of strategic planning, it’s a good idea, if you’re the CEO or board Chair, before a round of planning begins, to take proactive steps to boost directors’ understanding of the subject.  Provide some relevant reading, ‘talk’ them through the steps involved, point to the benefits, and answer questions they may have.  If handled in the right way, board members will love strategy-making and will find it an exciting and valuable exercise.

2)Medium-term strategic plans + annual operating plans:- The world changes so quickly nowadays, so gone are the days of 5-year strategic plans that tried to lay down definitive policy and precise actions for several years ahead.  Instead, best practice today is for organisations to define a broad ‘directional framework’  for the next few years ahead, spell out particular courses of action in a tactical/operational plan just for the immediate year ahead, and then do a review/update of the broader framework together with a fresh annual plan at the end of the year.  Organisations use various terms to refer to their medium-term framework, including ‘corporate plan’ and ‘strategic plan’, but the more apt term ‘strategic framework’ is gaining greater currency.

3)Hold off doing a strategic plan if your association is in a state of flux:-  If you’re waiting for a new CEO to start, are in the middle of a major re-structuring, or facing a cashflow crisis or a serious loss in membership or similar, wait until things are more settled.  Then people will be more at ease and can focus their minds more constructively.

4)Use a careful contents structure for your strategic plan:-  Every association is different, so there’s no single structure that suits every organisation.  However, core sections for a decent strategic plan will include, in brief:  i) Operating environment review (sector review, wider external review, internal association review, and summary of key issues and opportunities arising);  ii) Statement of purpose:  your Mission, 3-5 year Vision (for your sector/your association), and specific medium-term Goals (based on your Vision and key issues to be addressed);  iii) Summary of your association’s membership proposition and values;  iv) Strategic priorities:  list of 5-7 key areas of action (themes) for the next few years:  some outward/member-facing areas e.g. sector PR, new member services, and some internal to your association e.g. upgrading of IT system;  v) Overview of approach and key initiatives for each strategic priority area;     vi) 3-year financial overview;       vii) Organisation & governance arrangements;  viii) Key assumptions/risks/major contingency measures;  and  ix) Implementation & performance management approach.

5)Be clear/precise with the various planning terms you use:-   Unfortunately, with strategic planning certain key terms can mean different things across organisations.  For associations, to keep things simple, treat ‘purpose’ and ‘mission’ as meaning the same thing – the core role your organisation fulfils.  Vision (certainly in the commercial world) typically refers to how you would like to see your organisation looking in a few years’ time, but, amongst charities/non-profits, it usually refers to how you would like to see change in your (wider) external environment.  Goals usually mean high-level/broadly-defined aims, whilst objectives are usually more narrow and measurable aims.  To prevent confusion in your organisation, be sure to define what you want each term to mean, and stick to it!

6)Think about your sector, not just about your association:-  You can define goals and strategy narrowly just for your association itself (e.g. grow membership by X%) or you can ‘think big’ and define such things for your wider sector/profession as well as your organisation.  Arguably, any association today – if it’s of any significance in a sector – should be thinking big and seek to influence and lead its sector, not just manage itself well.  Furthermore, if you are a charity, the law expects you to think big and have a vision and mission that provide a ‘public benefit’, but this is often not reflected in the strategic plans of even large, national membership bodies.  For example, the Chartered Institute of Housing’s 2015/17 Corporate Plan does not have a society-based vision like perhaps “decent, well-planned housing for all” but a rather unclear mission and similar/internally-slanted purpose (mission: “a housing profession that demonstrates excellence”, and for purpose: “CIH is the independent voice for housing and home of professional standards”).

7)Use research and analysis and heaps of consultation in the development of your plan:-  A strategic plan needs to be based on careful analysis of your association’s recent performance and your external environment, together with – crucially – generous consultation with all key stakeholders.  If you neglect this consultation, your plan will have limited ‘buy-in’ and will go nowhere.  The three key stakeholder groups are obviously members, the Board, and staff, whilst other groups are likely to include clients of services provided (if not also members), partner/supplier organisations, major funders/sponsors, and influential media and industry contacts.  A detailed, updated survey of your members is a must.  Consultation with stakeholders can be done via a range of alternative methods, but some use of face-to-face meetings is wise as they will be the most revealing.

8)Limit your number of action priorities and ensure they are really strategic:- If your strategic plan has 49 strategic actions, I’m sorry, but that is not really a strategic plan!  Sadly, though, association plans are sometimes like this – stuffed full of various lists of actions across the organisation, indicating no real focus, joined-up thinking or prioritisation at all.  Particularly sad is the fact that often in such plans most of the actions  cover just the next year ahead and then intentions/details given fizzle out after that or just repeat selected, ongoing or general aims from the association’s governing documents!  The key point to remember is that a strategic plan is meant only to give an overall summary of the focus for each of your strategic themes, together with just a small number (ideally just 5-7) major initiatives/projects for each area.  Leave full details of actions for each year’s annual operating plan.

9)Integrate financial budgeting and risk management with your strategic planning:-       I am always amazed to see a lack of any head-line financials or key assumptions/risk issues identified in some strategic plans:  this is not good.  A strategic plan gives a broad framework for the future, yes, but at the same time should indicate some key financial parameters for the next few years and so drive/connect with operational budgeting for at least the next year ahead.  The same applies regarding risk issues, so the organisation can proactively steward and safeguard its assets and resources with care.  Otherwise, a strategic plan is just an exercise in detached ‘wishful-thinking’!

10)Don’t start your planning with financials and do focus your thinking:-  Good strategy is much more about applying insight, ideas, judgement and bold thinking, rather than just calculating numbers.  Taking last year’s budget and simply adding a notional 5% is not strategy!  Develop first your agenda of key issues and relevant ideas and initiatives and, after some consultation, then go back through these and do some financial assessment and target setting.  When you do your thinking, remember any organisation can’t be all things to all people, of course:  you must be prepared to make some clear and proactive trade-offs – particularly in terms of issues and projects your association can take on.

11)Think how you will organise and monitor implementation of your strategic plan:- Be sure to include in your plan not only an indication of which part of your organisation will be responsible for which strategic measures but also some key milestones and headline metrics you will use to monitor your plan’s implementation.   A good way of keeping track is to use a quarterly strategic ‘performance scorecard’, which tracks results in key operational result areas (e.g. membership numbers) and progress in specific strategic projects (e.g. new IT system or reach of a major lobbying campaign).  Such a scorecard should be accompanied by a suitable narrative report from your CEO and be discussed by your association’s board/executive committee on a regular basis.

12)Communicate your strategic plan well once finished:-  After your strategic plan has been approved by your Board and they are committed to it, turn to communicating outwardly to your various stakeholders.  Start particularly with your organisation’s staff and lead officers/volunteers on all your association’s main committees and groups.  Not all stakeholders need to receive a copy of the complete plan (for example, full details of all financials and risk matters won’t be of interest to everyone), so draft and make use of a summary version – for posting on your association’s website, mailing to members, reporting in the association’s magazine/newsletter and such like.  If your strategic plan contains a lot of change, it’s good practice to back-up written summaries with tactics like regional ‘road-shows’ and social media coverage, where members have the chance to raise questions.

13)Use a dedicated project team and prepare a project plan to develop your strategic plan:-  Preparing a strategic plan is quite an intricate and absorbing project, which can easily cause a lot of frustration and wasted effort if not handled well.  Although the board has to decide on the plan in the end, a very effective approach is to delegate the detailed drawing up of the draft plan to a dedicated committee/task group (including typically a few board members, some senior staff, and a few member representatives) and to ensure a project plan is prepared for the overall planning process that includes an adequate budget and schedule (allow for at least 4-5 months from start to finish to enable enough consultation).  No matter how the process is managed, the association’s CEO as well as the Chair or President have critical roles to play – especially in helping to balance and marry different viewpoints and ensuring the Board ultimately agrees on a plan.

14)Use a facilitator to support your planning process:- Since association board members and staff often have limited time to think about strategic issues facing the organisation or lack experience in strategic planning, it can be valuable to engage an external strategic facilitator to work closely with and assist the project team.  He/she can act as project co-ordinator, provide that vital challenging/external/objective perspective, and assist with tasks like consultation, analysis and workshops.  The bringing of an external viewpoint is, in my experience, particularly valuable, as association boards are so often made up of individuals who are very alike with similar backgrounds and similar views of the world:  a facilitator can do so much to help reduce poor or biased thinking (particularly groupthink).

Altogether , strategic planning can be quite a challenging exercise for membership bodies, especially given their political nature and the crucial need to involve many stakeholders.  However, if handled well, the exercise brings a host of strong benefits to associations, as I referred to above.  So, I hope the above range of practical pointers and suggestions will be of help to strategy-making in your association.

If I can be of any help with your organisation’s strategic planning, do get in touch.

Mike Owen, CEO at Owen Morris Strategic Partnership

Tel:  01886 881092                 E:

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Fat-cat charities vs tiddler charities? The “double-ended” problem that endangers the UK charity sector’s credibility and impact.

The UK charity sector does such great things – from funding most of this country’s cancer research to helping so many needy individuals.  But I wonder if the sector needs to take greater heed of threats at both ends of its structure.  At one end, it has super-sized, super-paying charities and, at the other, a long, long tail of micro charities.  The situation threatens the overall credibility and efficiency of the sector.

Recent evidence about high pay levels at top charities came from the 2017 review by Third Sector magazine of the accounts of the UK’s largest charities.  Amongst the top 100 charities it studied it found the average (mean) pay level for top-earners was £255k (a rise from £212k in 2015).  That quarter of a million salary is about £75,000 more than what the UK’s Prime Minister gets for running the whole country, not just one charity!

Thirty-seven of the top 100 charities pay their highest earner more than £300,000 a year.  Fourteen out of the hundred pay more than £200,00 a year.  What amazed me, though, is the whopping size of the pay-outs amongst the very top of the pile – all packets worth above £400,000 a year:

Wellcome Trust – £3m;  Nuffield Health – £1.25m;  Royal Opera House – £730k;  London Clinic – £540k;  Consumers’ Association – £490k;  Anchor Trust – £480k;  Church Commissioners for England – £460k;  St Andrew’s Healthcare – £430k;  City & Guilds – £430k;  and Marie Stopes International – £420k.

It’s not just a question of singling out the top earners, though.  The survey also identified the overall number of people paid more than £60k in income:  they included as many as 300 at Wellcome Trust.  The figures for all ten of the top charities are as follows, also noting the charitable income of each organisation (in brackets):

Wellcome Trust – 300 (£390m);  Nuffield – 275 (£768m);  Royal Opera House – 115 (£142m); London Clinic – 77 (£142m);  Consumers’ Association – 107 (£103m);  Anchor Trust – 95 (£367m);  Church Commissioners (CoE employees excluded) – 17 (£148m);      St Andrew’s Healthcare – 144 (£199m);  C & G – 185 (£141m);  Marie Stopes – 95 (£266m).

I noted too the pattern amongst these top charities that they come not from household name charities but from philanthropic foundations, charitable private hospitals and arts bodies.  None of them are fundraising-based charities.  This suggests two thoughts….

On the one hand, it’s possible to argue that the general public perhaps doesn’t appreciate enough the wide range of services and activities that today’s charities are actually engaged in and so the sector (simply) needs to work harder to ‘educate’ the public more about the true scope and variety of today’s charity sector.

On the other hand, one could argue that some of the charities in the above list should not really be considered to be ‘true’ charities at all and they are simply exploiting the ‘star dust’/virtuous image and valuable range of tax perks and privileges that go with charities and they could/should be made to convert to a different form of non-profit or even commercial organisation.  They could then be free to pay super-high salaries but they wouldn’t be able to do so on the back of any charitable tax breaks.

The overriding problem here is the simple but well-established fact that the general public do not like or support high salaries being paid by charities.  A poll of 1,000 people by the consultancy nfpSynergy in 2016  found a majority (27%) thought that a charity CEO should be paid less than £30k a year!  Only 5% felt that a charity with an income of more than £100m a year should pay its CEO £150k or more a year.  In another survey – this year’s annual Donating Trends survey on behalf of Third Sector – found that “spending large amounts on senior executive pay”was the top issue that would reduce consumers’ trust in charities.  That survey also found that only 10% of respondents consider that a charity’s CEO should ever receive more than £100k a year.

So, I am sure, if more of the general public really knew about the above sort of high pay levels actually being paid at many top charities, they would be shocked and very disapproving.   Their trust in and support for the sector would be dented severely.

It seems to make no impression at all on Mr and Mrs Joe Public that many charities do need to pay to attract decent talent to be able to run their organisations – some of which, of course, are complex and large and come with many types of risk.   The big gulf remains between what the public expects of charities and what charities themselves are doing today with pay levels.

Even if some of today’s super charities were to stop being charities, the core problem would not go away as consumers would still think charities should pay a lot less than they do.  I agree with sector commentators like Craig Dearden-Phillips who believe that, if charities worked harder at explaining how they operate and how they need to pay for talent, then the general public will be able to accept moderately high salary levels for charity CEOs – up to about £100k (or even £150k a year), BUT the public will quite rightly continue to balk at super-high salaries.  He believes that it’s time to for the Charity Commission to get tough on those paying silly money and stop them.  I would agree entirely.

Alongside this issue of some very high salary levels, some large charities, arguably, also deserve the label ‘fat cat’ because of their high level of unused reserves or their low dispersal rate of income on charitable expenditure.  Altogether UK charities have about £50 billion – yes that’s billion! – in their reserves:  that’s a lot of spare money sitting around, even allowing for some buffer cash reserves needed by all charities.  A study at the end of 2015 by the True and Fair Foundation (A Hornet’s Nest) found, for example, that the Wellcome Trust alone sits on long-term assets worth £19 billion and that the Church Commissioners has similar reserves of over £6 billion!  That study also calculated that one in five of Britain’s biggest charities spend less than 50% of their total income on good works:  for example, it found a rate of just 48% for Age UK, 46% for the British Heart Foundation, 46% for Sue Ryder, and just 24% for the Consumers’ Association.

There’s no space here to delve into that study, but it does raise the thought that some well-known charity names are holding onto their cash rather too much and/or are having to cover rather high overheads out of their income which is limiting what they can spend on good works.  Furthermore, it is altogether rather a black hole because the sector lacks a consistent measure that donors and funders can apply across all charities to compare and appraise individual charities’ income to expenditure effectiveness.

Now let’s look at the other end of the UK charity sector – the tiddler end.

On this front, I think the following table says it all:  it’s taken from the Charity Commission’s own website and shows the breakdown of the sector based on its records at the end of December 2016:

Annual income band         No of charities         %            Annual income £bn        %            

£0 – £10,000                             65,842               39.4%              0.218                       0.3%         £10,001 to £100,000              56,853               34%                2.007                       2.7% £100,001 to £500,000            21,956               13.1%              4.826                      6.6%                 £500,001 to £5m                       8,972                5.4%              13.409                    18.4%                 £5m +                                           2,201                1.3%              52.647                     72.0%           Not yet classified                      11,285               6.8%                   0                            0                     TOTAL:                                      167,109             100%              73.107                    100%

The startling figure for me is that nearly 40% of all charities have an income of less than just £10,000.  Furthermore, almost three quarters (73.4%) – yes three quarters – have an income of less than £100,000.  But altogether from those two income bands – a mighty 122,695 charities – their total annual income represents just 3% of the overall sector’s income.  In contrast, if you’re a charity with an income of just half a million pounds or more, you’re in the top 6.7% of all charities in terms of size!

Only 1.3% of all charities have an income of £5 million or more.  Within this category (based on the NCVO’s 2016 ‘almanac’ review of the sector) just 40 charities have an income of more than £100 million but they, as a ‘super-group’, account for nearly a fifth of the sector’s entire income.  What’s more, the clear trend for several years now is that the sector’s growth has been highly concentrated amongst these very largest charities, with the UK’s smallest charities that exist on under £1 m a year having seen their incomes decline.  The extreme dominance of the biggest charities is getting more pronounced, not less.

Of course, any market or industry has its big boys and its minnows.  But no business sector could have so high a proportion of its firms with a turnover of £10k (or even £100k) or less like the UK charity sector and actually survive.  Such organisations would simply not be viable – an income of less than £10k is hardly enough to pay a part-time salary and a small weekly rent!  Of course, in the commercial sector there is a ready inclination and market incentive for inefficient small players to be taken over by their more effective rivals.  In the UK charity sector, though, such economic reality and an inclination for mergers seem to be really lacking.  Whilst an increasing number of local, small charities are realizing they have to at least collaborate with other small charities to stand any chance of winning public contracts against national charities, the sector overall still sees many more new charities created each month than it does mergers or closures.

Ah, but we are ‘values-driven’ and quite different from those ‘grubby’ profit-seekers in the commercial world, I can hear many in the charity sector claim!   But this is just defensive self-talk.  There are thousands and thousands of ‘for-profit’ businesses that serve communities and the wider public and make valuable contributions to society – not just providing employment to millions, providing various public services, and paying oodles of tax into the nation’s coffers,but more modest things like the local café providing a meeting point for local residents!  There are also thousands of non-profit ‘social enterprises’, of course, that are making more obviously direct social contributions, but they are not set up or run specifically in the form of a charity.

It’s just not credible to argue that it’s fine for the UK charity sector to have loads of small, micro organisations like the UK grocery sector has loads of micro/local shops alongside the large supermarkets.  Obviously, those micro retailers do not enjoy the many and various tax perks that small charities do and they have to pay-out real-life, economic expenses to survive.  On the high street, think of the many small local businesses (e.g. café owners, bookshops, clothes shops, bric-a-brac shops) that face the unequal, ‘subsidised’ competition from the many charity shops.  Take away the crop of tax savings (e.g. no business rates to pay) and then see how many small charities would survive!

The most significant problem with too many small charities, though, is the compromised levels of efficiency and impact they bring about overall.

Remember that donors and funders give money to charities with the expectation that those charities will operate as efficiently as possible – that their donated money will be spent as well as possible.  But high levels of efficiency are, of course, compromised where there are loads of micro-charities all lacking enough critical mass or joined-up integration to achieve maximum effectiveness.  In a similar vein, commissioners of public service contracts require/expect charity bidders to offer adequate size and scale of experience, resources and capability, but if a sector suffers from loads of small uneconomic charities, that level of efficiency is not going to be possible:  in which case the charity sector is ill-serving the beneficiaries it exists to serve and will widely lose out – as happens all over the country today – to larger, more economically-sound commercial organisations.

Unfortunately, the cause of a lack of mergers between charities is down, to a large degree, to the attitudes or hesitant/defensive leadership of their trustees themselves.  Too often trustees do not want to give up their ‘little empire’ or they worry about losing a role to occupy their time in their retirement, or they worry about losing status if they become part of a larger organisation.  Alternatively, some trustees are put off by the perceived complexity of carrying out a merger or fear of embarrassment should the merger not be successful.  It does not help matters that the UK has approaching a million trustees – about as many as the actual number of paid employees working for charities – and very many trustees in small charities lack decent skills in governance or business management.

If charities want to carry on attracting grants and donations and continue claiming their current bag of tax privileges, they need – as well as increasing their overall efficiency as a sector – to explain, show and justify much better what they do and the beneficial impact they are making on society or in communities.    The struggling café owner next door to the charity shop needs to understand what is different or special about what the charity shop is doing to make him ineligible for the same tax privileges.  Just declaring that you are a charity is surely no longer enough to make people accept that you’re really doing something good or wonderful in the world.  Charities need to work harder at measuring, explaining and communicating the actual outcomes they are bringing about for the ‘public benefit’.

The Charity Commission should be expected to use its weight and power to promote, or require, change by charities in a lot of the ways identified in this article.  I would agree with the outgoing chair of the Charity Finance Group, Ian Theodoreson, that whilst the body perhaps should not actively dissuade or prevent people from starting charities, it should encourage such people – from the very time of registration – to co-operate with other organisations that already exist in the same field or are doing something similar.

But, of course, it’s not just a case of guiding new charities to be more collaborative.  The Commission – together with the sector’s infrastructure and representative bodies (ideally showing the way be merging themselves along the way?!) – should be doing a lot more to push existing charities to either combine or collaborate with (the typically, at least, hundreds) of other bodies that are doing similar things in their field.  I noted recently, for example, that this country has over 2,000 charities for veterans:  why on earth does there need to be so many as that?  (no wonder the government felt it necessary recently to set up a dedicated website portal to help the public actually to navigate their way around all those charities!). 

Sure, many small charities are small because they serve a very local area or because they are driven passionately by a founder whose energy and devotion it would be wrong to stop.  That’s fine and splendid, but one needs to balance that argument with the need to consider the overall efficiency and effectiveness ‘in the round’ for charity sub-sectors.  Do so many parents really need to set up their own charity in memory of their son or daughter who tragically died of cancer?  There’s a balance to be struck  here, of course, but the pendulum seems to have swung too far towards too many tiny, charity minnows.  Surely many of those minnows would be more effective if they weren’t so small and independent and worked more in conjunction with other similar charities ?

Mergers are not the only way, of course, for small charities to gain greater benefits of scale and efficiency.  Alternatives include setting up a joint venture company together to run a joint activity;  a joint venture project where two charities bring their respective skills and resources together and act together on a focussed initiative;  shared ‘back-room’ functions e.g. HR, IT, telecoms services;  and informal staff networking and co-operation.

Another approach – at a higher level – is for several charities operating in a specific field to form a collective ‘alliance’ or working partnership together whereby they jointly plan/share/co-operate on activities like fundraising, PR, marketing or lobbying.  In this vein, an argument could be made that large charities should be expected to reach out to the many smaller charities operating in their field and set up semi-formal ‘support’ structures and services (e.g. HR, IT).  What a transformation that could be!

Altogether, the “double-ended” problem I’ve outlined in this post is a major challenge to the UK charity as a whole.   At its heart it raises the basic question of what exactly is a charity and what the public has a right to expect of charities if they are to keep their valuable range of tax privileges.  Charities do indeed wonderful things for society, but they mustn’t over-reach themselves in thinking they’re too special that they can escape scrutiny.  More modesty (and transparency) in pay levels amongst the largest charities would certainly help, at one end, as would more collaboration and mergers, in the long tail at the other end of the sector.  Otherwise, both the credibility and overall effectiveness of the sector will really be in danger.

Written by Mike Owen, CEO & Principal Consultant at Owen Morris Strategy Group.

If you have any thoughts or comments on the issues raised above, do let us know.

If Mike can assist your organisation with any of the issues or challenges discussed in this post, please get in touch too.

T:  01886 881092       E:

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What’s so special about ‘values’ in charities? How to choose and embed values in a charity for maximum effect.

Values are commonly seen as a central driving force – indeed a defining feature – of charities.  But why is this?  Values are also used in many for-profit organisations.  More significantly, though, many charities, whilst keen to say they have values, appear to leave them as lofty words hidden in internal strategy or HR documents and hardly mention them externally – as I found in a quick survey I did for this post.  To be worthwhile, though, values must not only be linked to a charity’s wider strategy and be developed openly with stakeholders, most crucially, they need to be strongly embedded in a charity’s culture and be actively promoted.  The key issue is how to make these things happen?

What actually are values?  They are the major beliefs, attitudes or principles that guide how an organisation should be run or what it seeks to achieve.  A value shouldn’t be seen as just a word because words have different meanings to different people.  For guiding the running of an organisation, a value should represent a specific, preferred behaviour, so it’s important to define each value with a longer explanation and to give examples of the behaviour expected.

Values are part of the wider trend over the last decade or so for all types of organisation to embrace a more ‘purpose-driven’ approach to leadership.  Purpose means an organisation having a core, aspirational reason for being that connects with wider society or the public at large.  The idea is that, by acting on this purpose, organisations can achieve more for their owners and stakeholders over the long-term than just by pursuing financial or other goals based on narrow self-interest.   Most FTSE companies nowadays, for instance, declare some form of statement of values and publicly report several non-financial as well as financial measures.

Very interesting research on values is produced by The Great Place to Work Institute UK, who compile each year an overall list – across all sectors – of the UK’s ‘Best Workplaces’, based on a survey of companies’ employees and managers.  According to a follow-up survey of the 100 organisations of the UK’s list from 2014, 97% of Best Workplaces said they have ‘values statements’, they put their values at the heart of everything they do, and they attribute their business success to them.

Also interesting from this research was the list of particular values that were found to be the top 20, most common across all the organisations surveyed.  They were:  integrity, passion, teamwork, customer, respect, people, fun, learning, creativity, excellence, accountability, quality, courage, collaboration, honesty, commitment, expertise, innovative, professional and service.  Notable too was how certain values tend to predominate in certain sectors.  Thus, for example, integrity was found to be the most commonly stated value in the professional sector, whilst ‘fun’ was the top value amongst media firms!   Sadly, I couldn’t see a summary just relating to the charity sector.

So, I did a very quick (yes, very unscientific!) ‘micro’ survey of the websites of ten national, well-regarded charities to see what coverage and range of values they had.  I was shocked to find very little mention at all of things labelled ‘values’:  furthermore, I had to dig deep into the ‘about us’ section of sites to see the few references I did find.  The charities in question might be mentioning values in their strategic plans or other ‘internal’ management documents, but they’re clearly not detailing or promoting them openly in their outward-facing communications.

The National Trust was one of the first charities I looked at – one I have always admired.  At a seminar recently in Bristol I was able to ask their CEO (Dame Helen Ghosh) what she made of charity values:  she said they are very important indicators of behaviour and they were clearly on the Trust’s website.  But, I’m afraid, Dame Helen, they are not clearly promoted on your website:  I had to put the term ‘values’ into the website’s search facility and nothing came up, as far as I could see!  The nearest I could find was a reference to something called The National Trust’s “cause” – which is obviously related but not quite the same thing as a set of organisational values.  This was despite Dame Helen also saying her charity has “lots of HR people embedding the Trust’s values across the organisation”.

On The British Heart Foundation’s website I could only find a single line reference to ‘values’ on the third page of a strategy document under ‘About us’ (“brave, compassionate, driven and informed – in our fight for every heartbeat”).  I visited a local BHF shop in Worcester and couldn’t find any leaflets that stated what the charity’s values were and when I asked the shop manager she didn’t know what they were.  Likewise, when I looked at the website of Blue Cross I couldn’t see any reference to things called values – not on the home page or under ‘About us’.  I found summaries of the charity’s vision and mission, but no values:  this was despite my seeing ads on the site for jobs that boasted “Blue Cross is a values-driven organisation” and their having a ‘Supporter Charter’ that also said nothing about any organisational values.  I also visited a local Blue Cross shop and – you guessed it – found no leaflets or information that declared anything about values.

On a more positive note, on The Samaritans’ website, I readily found that their values are “listening, confidentiality, people making their own decisions, being non-judgemental, and human contact” – and each value had a summary explanation next to it.  On Oxfam’s website, there were three values declared: “empowerment, accountability, and inclusiveness” and there was also a brief explanation for each.  On the Sue Ryder website I found under the ‘About us’ tab a short summary section identifying three corporate values (“make the future together, do the right thing, and push the boundaries”), with an explanation against each too.

On the Barnado’s website I couldn’t find any distinct section about values – merely a sentence under ‘Our Mission’ that said “we value and embrace diversity and are committed to creating a society for our staff …. that is free from discrimination, victimisation and harassment”.  Volunteering Matters’ website declared five values but with no accompanying explanations:  “valuing staff and volunteers, working as a team, being agile, being ambitious, and demonstrating mutual respect”.  On the Cancer Research UK website I couldn’t find any section identifying any values:  I turned to their strategy summary document and gave up!  Likewise, on The Dogs Trust’s website, I couldn’t find any mention of values – a simple mission description, yes, but nothing called values.

Despite these mixed findings here, in theory at least, the use of values is meant to offer a string of benefits to charities.  In particular, they can support vision and mission statements in instilling a sense of strategic clarity; they can provide a deeper bond and source of motivation for employees and volunteers;  they can guide the definition of organisational policies and processes;  they can help act as a steer and selection screen for new projects and innovations; and they can help attract and motivate donors and funders.

The problem is, though, simply crafting and declaring a set of values does not automatically lead to better organisational performance (or winning a contract from a local or national public authority!).  In a US academic study of The Great Place to Work data and organisational performance covering the period 2007 to 2011 there was found to be no correlation between an organisation’s publicised values and its performance.  However, there was found to be a positive relationship when there was “a culture of strong values as perceived by employees” – in other words – and this is the crucial point – where the values of the organisation are actually embedded properly and ‘lived’ throughout the organisation, performance improves.

But ahead of effectively embedding values, a charity should make sure first it has integrated those values with the rest of its medium to long-term ‘strategic framework’ and developed and shaped the values openly and collaboratively across its stakeholder groups.

Values are often seen as sitting alongside a charity’s vision and mission to act, together, as the guiding ‘North star’ for the future of the charity.  The three elements are meant to be mutually supportive, shining an overall light for the future and indicating what type of character or culture the charity is to have.

A problem, though, is that sometimes Vision (how a charity wants the external world to change) and Mission (the charity’s role in supporting that vision) are themselves poorly defined – for example, they say almost the same things, they are too internally-focused on the organisation itself, are too bland, or are too unrealistic – so then values cannot be integrated meaningfully with them.  A second problem is that values should be – but often are not – reviewed and updated regularly – at least every two years or so – to check they are in tune with and supporting the charity’s latest strategies and activities.

When you develop your charity’s values it is vital to actively consult and involve all your key stakeholders, rather than the Board or senior management team select them by themselves in a closed room!  This is to both gain a good cross-section of informed opinion to help shape the values and increase the chances of widespread support when the values are adopted.  The usual, key stakeholders to consider obviously include:  trustees, senior managers, other employees, volunteers, beneficiaries/service users, major funders, donors, and major partners/supplier organisations.

Choosing values should start with surveying how stakeholders currently view the charity and what range of words/emotions/attitudes they use to describe how the charity ‘comes across’ and what it is perceived to stand for.  These need to be compared to current value statements and related to the existing heritage, history and wider brand image of the charity and the image and branding of rival charities and other main players operating in the sector.  A good, external facilitator can help a Board/senior team with these tasks.

Stakeholders then need to be asked what type and range of key values they would think appropriate for the future – as part of a wider briefing/discussion about the future direction (vision, mission and key strategies/goals) of the charity.  Current values/feelings can be mapped against people’s future feelings and key differences identified.  Objective findings from a quantitative survey may be needed  – if affordable – to help or inform discussions.  The final part of the process is usually best handled by a dedicated cross-stakeholder task-group to review all the findings and choose/define a particular set of future values (or modifications to current values).  These then need to be tested out on further samples of stakeholders, with a final choice confirmed by the trustees.  It’s usually best to go for no more than about half a dozen or so values.

Finally, once values have been carefully selected, the important issue is making sure they are ‘lived’ and encouraged day-to-day in the organisation.  How to do this?  Here’s a quick list of ten key measures I would urge:

a) Senior management should take time to brief and explain to employees, volunteers and other key stakeholders the background (strategic) reasons and aims for adoption of a charity’s latest values.  People won’t embrace values unless they understand the context and have had some opportunity to raise any questions first.                                                 b) Organisational values need to be reflected in the local mission statement of every department or team and everyone’s individual job description, including definition of appropriate behaviours, attitudes and standards they will be expected to adopt.                   c)Training and support must be provided to people, where needed, to help them adopt the behaviours and standards expected.  At the same time, some operating policies may need to be adjusted:  for example, if  ’empowerment’ is a value, it won’t help if customer service policies insist on no refund being given without prior approval from a director!                   d) Departments and teams in an organisation need to be well-integrated to support their collective values.  So, it’s very helpful to arrange cross-team ‘get-togethers’ for people to discuss values together and check how everyone is going to work in support of each other.  e) Employees’ performance reviews should include discussion about how they have acted and performed against the specific attitudes, behaviours and standards defined in relation to organisational values.  Where volunteers are used, their managers’ informal reviews must cover similar ground.                                                                                                                  f) Managers’ salary reviews should partly be based on how well they have personally displayed and – crucially – encouraged and promoted in others the organisation’s values.  g) Organisations should use numerous ways to publicly thank, recognise, celebrate and generally reinforce people’s adoption of organisational values.  Techniques range from coverage in the staff newsletter to various type of award scheme.                                             h) There should be regular Boardroom discussions to consider and reflect on the culture, values and ethics in the charity (in my experience this doesn’t happen much).  And, critically, trustees and senior staff need to act as suitable ‘role models’ for the organisational values.                                                                                                                           i) Recruitment processes and selection decisions need to include consideration of how well candidates match up against defined value behaviours and attitudes.                         j)  A charity’s main communications tools and media – externally as well as internally-facing – must be widely used to help explain and promote its organisational values.  This includes, of course, social media.

If your charity is a membership-based body where members have definite powers in the governance of the organisation, that wider accountability may usefully boost concern for a healthy culture and sound ethics.  Furthermore, if the charity is a professional association or trade body, values and ethics can be powerfully reflected and bolstered by the ‘codes’ of professional standards or conduct that such organisations often have.

My overall take from all the above is that, whilst values are, of course, valuable for charities, they are not something uniquely special to the sector.  I was surprised not to see the charities I looked at referring to their values more fully and outwardly as part of their descriptions of their purpose/cause.  If values are left mostly just as an ‘internal’ strategic concept rather than be actively used as part of an open and external leadership and mission-promoting aid, that is sad – because values can indeed play a powerful, engaging role in charities.  So, I hope the above range of ‘how-to’ suggestions in this post are helpful in pointing how to go about applying values for full effect.

What is your opinion on the significance / role of values in charities?  I would be interested to hear.  As always, if I can assist your organisation, do get in touch.

Mike Owen

E:      T:  01886 881092

Copyright of Owen Morris Strategic Partnership

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The new 2017 Charity Governance Code: a very welcome initiative to help raise standards, but wider action still needed

A higher standard for UK charity governance: that’s the aim of the new ‘Charity Governance Code’.  Recently developed by a steering group of some of the sector’s leading bodies, it’s aimed at the UK’s 850,000 trustees and replaces the old 2005 Code (Good Governance: A Code for the Voluntary & Community Sector) last updated in 2010The new Code echoes much of what was in that previous code but there is a fresh, updated feel to it and it does include a wider, more stretching set of expectations of trustees in several areas – which will help to elevate the leadership effectiveness of many UK charities.

It’s reassuring and pleasing too that the new Code – whose final version will appear soon after its recent consultation period – received positive support across the charity sector.  But that’s not to say the Code doesn’t have some gaps or issues!

The first thing I was struck by from reading the draft was the intention that the Code “is not simply another piece of guidance …. Instead, it draws on a range of legal requirements, guidance and established practice and is designed to push and challenge boards …. in the spirit of continuous improvement”.  Moreover, the Code adopts the position that trustees – especially at large charities –  should ‘apply or explain’ i.e. follow what is in the Code or explain why not!  This is a bold, but welcome stance.

It’s impressive that the Code is particularly supported by the Charity Commission – including the ‘apply or explain’ call – because it has said it will now be withdrawing its own, current guidance document ‘The Hallmarks of an Effective Charity’ (CC10).  So, this Code is clearly intended to be the standard of principles for all charity trustees to follow.  It will also be very helpful to other types of non-profit bodies, even where they also need to follow their own sector-specific code (e.g. housing associations).

The Code starts with a general ‘foundation’ principle that all trustees should be committed to their charity’s cause, understand their role and legal obligations and are committed to good governance.   Building on that foundation are seven other principles:  organisational purpose/direction; leadership; integrity; decision-making/risk/control; diversity; board effectiveness; and openness/accountability.  The section for each principle includes a summary explanation and a set of indicators of recommended good practice (though these range from the quite broad to the very specific for some principles).

As well as echoing the six principles of the previous 2005 Code, the new Code chimes with the well-established Nolan Principles – the seven ethical standards expected of office holders in the public sector and of people who work in other sectors where they are delivering public services (e.g. health, education, housing, social and care services).  Those principles are: selfishness;  integrity;  objectivity;  accountability; openness; honesty; and leadership.  Altogether, then, quite an extensive framework of guidance for trustees!

So, what are some of the fresh, new expectations set out in the new Code?  Here’s a selection of some of the main points, with some concerns and issues that struck me.

-The new foundation principle that all trustees should be committed to their charity’s cause and understand their legal duties obviously makes good sense and nobody is going to dispute its importance:  the issue is rather making sure the charity sector steps up to provide more extensive reference resources, training, peer networking, courses and qualifications to support trustees.  Except in larger, national charities, there simply is no deep inclination amongst most trustees to gem up on charity governance/law.  A higher, general standard of trusteeship will only develop if the Code lays down firmer, minimum (even mandatory) requirements for governance training of all trustees –  especially for chairs and senior trustees at large and mid-sized charities – and the sector does a lot more to ensure wider provision of relevant training and resources.

-The new Code expects trustee boards to undertake regular strategic reviews – including checking the sustainability of current business models and income sources, evaluating the charity’s impact and checking their charitable purposes are still relevant.  Larger charities will be expected to benchmark their performance against other suitable organisations.  These are sensible expectations, but I was surprised that the Code did not say more about impact assessment, including measuring and assessing outcomes and results rather than just considering charities’ purposes, which can often be quite vague and general.

-More significantly, the Code will now require charity boards to consider mergers, partnerships or – yes – even winding up their charity, if other organisations can be seen to be fulfilling similar charitable purposes more effectively.  This is a big, welcome push in the right direction, given the massively ‘long tail’ composition of the UK’s 165,000 charity base and the heavy level of duplication and the need to do something to improve sheer lack of efficient scale of tens of thousands of small charities.  However, of course, nobody should really expect much to change anytime soon:  only about 100 charity mergers happen each year in the UK compared to about 1,000 new charities that are started-up each year!  Given the conservative thinking of many small charities’ trustees with their typical concern for keeping their charity independent and protecting their own role, the Code will need to be boosted by a range of legal or other obligations forced upon trustees  for the sector to see a radical increase in the number of mergers or even collaborations!

-The Code says more about ensuring sound leadership and board effectiveness.  Points include more emphasis on the chair’s role in promoting good governance;  the view that a board should have a least five but no more than 12 members;  the need for strong arrangements for managing the CEO and relationships between him/her and the board; and – yes – the encouragement for board trustees to have different, diverse views between themselves as a healthy sign of good governance!  The Code also recommends that trustees should be appointed for limited terms (with nine years being the usual maximum) and that larger charities should externally assess the performance of their board on an annual basis.  All good points – but I think a maximum term for trustees of just six or seven years would be slightly better than nine years (to be similar to many commercial boards).

-The Code has a lot more to say too about decision-making, control and risk – certainly compared to the equivalent principle 4 in the 2005 Code.  It usefully outlines a broad range of recommended practices – ranging from the fairly basic like a call for a detailed document that sets out all delegated areas of authority and defined terms of reference for board committees to several specific points about risk management, including how the board should promote a culture of “prudence but not over-caution” with resources; that the charity’s approach to risk management should be described in its annual report and that a charity’s audit committee should consist of at least three trustees and be chaired by a person who actually has some financial knowledge.  Again, all very welcome points.

-The Code has a new section stressing the importance of diversity on charity boards.  This is an important section because, although the charity sector is assumed to promote diversity, it is actually a weak feature in terms of the make-up of the average UK charity board.  What impressed me is how the section calls for diversity in its widest sense: “diversity includes the seven protected characteristics of the Equality Act 2010 (e.g. gender, sexual orientation) as well as different social-economic backgrounds and diversity of thought”.  Included in the section are a dozen or so recommended good practices, including the expectation that the board will ensure that “trustee vacancies are widely advertised and it looks at best how to attract a diverse pool of candidates”.   So, I hope board chairs will do less tapping on the shoulders of friends to find recruits and trustee recruitment agencies will be more open-minded in their approach and put forward more diverse candidate profiles to clients – especially younger people or individuals who have had more unusual careers or think differently.  Certainly, for charities that are membership-based bodies, there is a crucial need to ensure their boards don’t just consist of individuals who come from amongst their member base.

-There is an expectation that charities – especially larger ones – should be more open and accountable to their various stakeholdersThis was the subject of principle 6 in the previous Code, but there are additional best practices recommended in the new Code – including how large charities should publish an annual statement of the steps they have taken to address the diversity of their leadership and how they have applied the Code to help run and develop their organisation.  More fundamentally, I would suggest the Code could say more about requiring trustees to report in some detail each year about how efficiently they have managed the charity’s operations and what (ideally measurable) impact they have made on the world.

So, there’s a definite mix of good and some weak points in the new Code.  But I also think the Code has missed commenting on a few quite fundamental issues about the nature of trusteeship itself and the need to adapt to match the more commercial world today and the more varied structures that are increasingly seen by not-for-profit bodies today.

Most fundamentally, the draft Code, as it stands currently, does not question or raise a doubt about the traditional trustee board as the optimum form of modern governance for non-profit organisations.  It assumes – by default – that the philanthropic model of the 19th century (a volunteer trustee board alongside a separate executive team) is still appropriate for all charities today.  But this is no longer a reasonable assumption – for a number of reasons, as I covered in my October 2016 post here:  for large, complex charities relying on 12 volunteers meeting only occasionally is not a modern, safe form of leadership;  the executive team does not share in equal liability if things go wrong; having two leadership teams is obviously more complicated, time-consuming and costly than a unitary board;  and the total number of trustees required in the UK under the present system is too large (about 100,000 trustee vacancies are unfilled at any one time!).

Equally, the Code does not question or raise a doubt about a charity being the right form of legal entity to serve a social or community benefit.  But, of course, beneficiary-mission serving bodies don’t have to be set up as charities:  there are Community Interest Companies and ordinary companies backed by shares or guarantee, for example.   What’s more, non-charitable social enterprises come with several key benefits, including simpler governance and reporting requirements, fewer restrictions on their range of activities, more flexibility in how they can be funded, they can pay their directors, they have a unitary governing body, and they can be freer to act in policy areas where charities are restricted.

Finally, three other particular observations about the Code are worth mentioning.

-The Code says surprisingly little about governance issues involved with a group structure, dealing with trading subsidiaries, managing relationships with commercial partners/sponsors, or working as part of a joint venture or alliance.  But such wider organisational/operational arrangements are going to be more significant in the future, of course, as charities adapt to a more connected, complex environment to serve their missions.  I also thought the Code should say something about ‘closed member’ companies where the trustee board members are also the members of the charitable company:  where none of the trustees are openly elected or appointed by an external constituency (e.g. service users, general membership, funders or partners), there is a risk sometimes of a rather conservative, inward-looking perspective pervading.

-The Code avoids commenting on the question of payment of trustees.  I think the Code should have recognised that some bodies in the sector (e.g. NPC) and some charities themselves would support making payments (it can help to recruit more disadvantaged individuals to be trustees, for example).  The Code should at least endorse the right for each charity to decide on the matter and be able to pay trustees, if it judges this helpful.

-The Code could usefully include some pointers regarding good practice for the hiring and engagement of charity CEOs, since they work so closely with the board, even though they are not normally an actual member of the board itself.  In particular, echoing the expectation that trustees should have fixed terms, I think the Code should similarly prescribe fixed (renewable) terms for the CEO.  After all, a CEO who overstays can stifle fresh thinking and change a lot more significantly than an individual trustee!

Overall, I would say ‘congratulations’ to everyone who contributed to the new Code!  There are always opportunities to improve such a document, of course, but it is a most valuable step forward for the UK charity sector.  I do hope it will be supported across the sector, but also that it will be reinforced and boosted by necessary, wider action on other fronts.

To read the full draft Code, visit:


/witten by Mike Owen, CEO at Owen Morris Strategic Partnership

E:               T: 01886 881092

Copyright of Owen Morris Partnership

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The problem of poorly-skilled charity/nonprofit Board chairs: research suggests it’s perhaps time to share-out the role, not just boost their training and support

Charity and not-for-profit board chairs are expected to provide significant leadership to their boards and their organisations.  But recent research – from both sides of the Atlantic – reminds us that too often board chairs are ill-prepared and ill-equipped to fulfil the role effectively.  It’s a serious issue that calls for thinking about the role itself and overall board leadership, not just the (recognised but neglected) need for better training and support for chairs themselves.

The US research in question – a survey of 635 American non-profit chairs carried out earlier in 2016 by the Alliance for Nonprofit Management (entitled “Voices of Board Chairs”) – produced the following stark findings:

-More than half (51%) of board chairs said they had not done anything specific to prepare for their role, with just 19% viewing their appointment as part of a planned “natural progression”.   Having been the chair of a Board committee within the organisation was the most common past experience (65%), rather than vice chair (48%), secretary (22%) or treasurer (19%).  Just 56% had been at their organisation for at least three years.

-In the absence of a formalised preparation process, the main sources of advice for preparing for the role were talking with the CEO (58%) or talking with the outgoing chair (50%) – even if they had been weak in their role!

-The top three duties of a chair in relation to the board were seen as keeping the board’s focus on strategic direction, ensuring the board fulfils its governance duties and chairing board meetings.  However, despite recognising these valid duties, chairs identified these same areas as where they needed most advice on:  guidance about boards and governance (77%), guidance about leadership (69%) and guidance on how to manage meetings (65%).

-Most chairs (56%) felt that their leadership style was/should be that of a “team builder who cultivates others and delegates responsibility”.  Just 25% saw it as their role to try to   ” build consensus before action is taken” and only 8% thought their role was to “take charge, forge ahead as a decisive leader”.

-70% of chairs said they sometimes feel frustrated in their role, with 9% often feeling so.

Echoing some of these disturbing findings was the smaller member survey carried out by the UK’s Association of Chairs (AoC) in February 2016.  Based on a respondent base of 439 chairs, vice chairs and some prospective chairs, that study’s key findings included:

-only 19% of chairs said their organisation had an allocated budget for board development.  Just 34% of chairs had had an induction for their role.

-the main support chairs received was access to publications, conferences and events.  Fewer than 50% had received any kind of development support in the previous year.

-a wide range of additional support was wanted by chairs.  A third wanted help with improving the effectiveness of board meetings, understanding the impact the organisation makes, assessing the board’s effectiveness, chairing meetings on time, and handling their relationship with the CEO.

If you have experience on non-profit/charity boards, you probably – like me – recognise many of the above findings and are concerned by them.  In my non-exec/trustee experience (nine boards, including chair of a non-profit joint-venture enterprise), whilst I would actually applaud anyone who takes on the role of a non-profit/charity Chair – it is indeed a very difficult role – the key weaknesses of (some) chairs that have alarmed me the most include:  limited knowledge about charity law/good governance; the chair thinking a bit too much on occasions about his/her own company or personal status rather than the charity; preferring the status-quo too much / too unwilling to push colleagues for change;  not good at leading a strategic discussion or running an agenda to time;  and reluctance to set firm performance frameworks for the CEO and executive team.

Sadly, with most of the CEO roles I’ve had so far in my career – mostly mid-sized non-profit bodies – I have been shocked by how I have had to spend almost as much time advising and ‘managing’ upwards i.e. my Chair and other Board members – mainly on ensuring good governance/business management, getting Board members to do things they promised to do, and managing politics between board members themselves – as I did on managing staff employees!  Sure, it’s part of the turf of being a CEO in the not-for-profit sector and larger charities normally do have a very experienced leader as Chair, but wouldn’t it be so much better if all (or at least most!) nonprofit board chairs brought ready with them to the role an elementary, core level of governance and leadership acumen, not just their passion or expertise in the relevant cause or sector?  Think how much more productive the typical charity CEO (and the charity as a whole) could be!

In my experience, the chair and the board as a whole work much, much better where there is, in particular, a strong diversity of individuals (in terms of different skills, gender, background and ideally age) sitting around the board table.  I have been fortunate to be on some boards where I have seen this very much to be the case.  In contrast, I have been on boards or been the reporting CEO – particularly in some (but not all) membership associations – where all members of the board had virtually the same background (job role, age level and mostly just worked in the same profession) and this just so obviously fostered conservative/narrow thinking, weaker business management, a reluctance to change, and a disproportionate interest in jockeying for personal prestige or status.

What to do, then, to improve Chair performance?  Some of the solutions needed are surely obvious and both surveys mentioned several measures.  They include, for starters, organisations adopting a more proactive and systematic approach to board chair succession planning and preparation.  There is obviously a need to provide more elementary training and accessible resources for chairs on core governance knowledge and chairmanship/facilitation skills.  Then there’s a need to provide more ongoing support to chairs with facilities like coaching, mentoring, online peer support networking, and local  seminars.  It would help too, I think, if the UK third-sector had a national qualification or award system that chairs could strive for that both guided their learning and recognised their professionalism:  sadly, it’s the chairs of smaller charities that would be less interested but who would typically be most needy, so having a national award system would hopefully ‘nudge’ them to gain the award as the ‘expected’ thing to do.

But, whilst noting all the above, what particularly struck me from the US study was the recommendation that nonprofits/charities should look much more at adopting ‘shared leadership’ models rather than relying on just one individual to fulfil the role of chair – which would obviously both make the leadership role less onerous and help build overall future leadership capacity.  The US study revealed that just 6% of the chairs described themselves as ‘co-chairs’, with a similarly very low figure (8%) of chairs having ‘co-executive’ i.e. shared CEO leadership in their organisations.  As in the commercial and public sectors, it does appear that the traditional ‘heroic’ individual model of leadership is still very much seen as the norm!

The UK’s AoC survey revealed that over a third (35%) of chairs are spending 5 days or more a month on their chairing role, with 54% spending 4 days or more per month.  I think that’s probably understating the situation at many very small charities and at some of the very largest charities.  I know some chairs who put in an average of two or more days per week – and that’s a big ‘ask’ when chairs are normally unpaid volunteers.   Sure, many of the individuals don’t mind the time commitment because they believe passionately in the mission of the charity and they have the spare time to offer.  But, is such a time commitment fair or reasonable?   Don’t such individuals risk losing their objective detachment as a trustee or risk compromising/duplicating the role of the CEO?  Or, in some cases, I wonder, is such an intrusive chair not actually masking the actual lack of basic viability of the charity concerned?        

The US study suggests that there are actually several different models of shared leadership that boards could consider, including:  a) co-chairs – two board members who divide up the chair’s duties between them;  b) multiple leaders – three or more individuals who share different aspects of the leadership responsibilities;  c) making more use of Board committees (their chairs, in particular) – especially for monitoring or co-ordinating duties;  and  d) delegating more to the CEO.    I would also add the option of adopting a ‘unitary board’ – which brings together trustees with some senior executives to form one governing body.  Another  suggestion is that more UK charities should perhaps merge or collaborate more closely with other charities/nonprofits so that fewer single-body board chairs are actually needed in the first place and the charities that do remain can enjoy a higher-skilled chair!  (Does the UK really need 160,000 different registered charities, each with its own Chair, alongside 750,000 other trustees?)

Reinforcing the case for more exploration of shared leadership is the simple fact that not all chairs enjoy or are interested equally in all the different parts of their role.  For example, some chairs enjoy, or are better at, the public-facing/representative side of their role more than the strategic governance or board meeting duties.  With other chairs, the opposite could apply.  For this reason, some nonprofits – for example, certain membership associations – have two senior roles – a President who does the external, ambassadorial duties and a Chairman who focuses on chairing the board and supervising the CEO and day-to-day operations.  Splitting the chair’s role like this can potentially benefit the organisation a lot because individual duties can be performed by better-matched individuals and it makes it easier to attract future leaders who might be deterred from taking on an onerous traditional, full chair role.

Overall, the two surveys outlined above are telling reminders that  there is a serious deficit in governance and leadership acumen amongst many charity/non-profit board chairs today.  This fact obviously does not help the organisations concerned – and the 3rd sector overall – deal with the major challenges and pressures faced nowadays. The ideas suggested of more shared approaches to board leadership are worth exploring.  The wider point, though, is that there is a need for the sector as a whole (particularly the national charity representative and support bodies) to get together to address the problem and improve significantly the development of and support to charity/non-profit board chairs.  Give me a call if anyone wants my humble support!

Mike Owen

Copyright of Owen Morris Strategic Partnership

December 2016

Tel:  01886 881092    Email:

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