Writing in a personal capacity for a series of essays published by the think tank NPC, he says the model of voluntary trustees does not work for bigger charities
Unitary boards should be the default model for major charity governance, according to Kevin Carey, chair of the sight-loss charity the RNIB.
Writing in a personal capacity in an essay published by the think tank NPC on Friday, Carey argues that large charities should move towards adopting unitary boards, where the non-executive members, the trustees, sit alongside executive staff members on the same board.
Carey says the existing model, in which voluntary trustees sit on a separate board with oversight of the senior leadership does not work for charities with annual incomes of more than £1m. “The bigger they are, the worse it is,” he writes.
He argues that most charities do not fail because they lack a governance code, a risk register and a trustee handbook, but because of trustee cowardice in which “nobody has the guts to say that the CEO is useless, the deficit is structural or, more widely, that the emperor has no clothes”.
Carey adds: “Charity law gives trustees all the responsibility and executive directors all the knowledge, power and capacity to obfuscate. This makes a nonsense of any call to adopt good governance.”
He says the “Victorian” split between amateur trustees providing oversight and strategy and professionals dealing with implementation is allowing directors to fob off the boards and could lead to bad implementation.
“I think the default for the governance of major charities should be unitary,” he writes.
“It helps avoid the farce of the executive team not telling and the non-executive board not knowing; the executive team doing all the crisis management and the non-executives turning up once a quarter to smile at a crisis averted or to pick up the pieces.”
But Carey says the process of applying to the Charity Commission to adopt a unitary board is currently an “unnecessarily complex and unpredictable process”.
He also argues that decisions about whether trustees should be paid should be devolved to the charities themselves, rather than being overseen by the regulator, saying unease about this issue stemmed from “the sector’s history of the ‘great and the good’ doling out benefits to the weak and the poor”.
He says: “Apart from the rank hypocrisy of paid charity commissioners ruling that charities can’t pay their trustees, there is no logical argument for a one-size-fits-all rule.”
And Carey says trustees should adopt a more business-like attitude to governance, particularly when it comes to mergers, calling for trustees to be legally required to demonstrate there is a good reason for rejecting merger proposals.
“The problem is, turkeys won’t vote for Christmas, and this is the overwhelming reason for rejected merger proposals in the sector,” he says.
“So the law needs to see that they behave in precisely the same way that commercial boards must when they are approached with merger proposals. For commerce, the main motivation is to maximise shareholder interest. For charities it should, legally, be consumer interest.”
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He also criticises the Charity Commission, the National Council for Voluntary Organisations, and the charity leaders body Acevo, as not fit for purpose, and calls for them to be scrapped in favour of a self-regulatory regime for major charities with smaller voluntary organisations operating under generic tax, civil and criminal law.
The essay is part of a collection of 16 published by NPC on Friday called Flipping The Narrative: Essays on Transformation from the Sector’s Boldest Voices.