Maintaining Independence: 4 Big Challenges for Trustees

Introduction to Association of Chairs’ Discussion, 14 March 2017

  1. Thank you very much for inviting me to lead this discussion. I think the Association of Chairs has a very important role and I am a great fan of how it is being developed. Congratulations to Rosalind Oakley and the Board. (Please see their website: https://www.associationofchairs.org.uk).
  2. I was asked to talk about maintaining independence. My premise is that independence is an essential, distinguishing feature of charities and other voluntary organisations. The reason that we enjoy the privileges of charitable status is that Parliament thinks it is a good thing for there to be an independent source of ideas and action for charitable causes that is not beholden to any private, commercial or party political interest and is for the public benefit. That is why it is rightly a scandal if a charity is found to be suborned to some individual’s personal interest or a front for a political party or vested interest. So cherishing our independence is of existential importance.
  3. Another premise is that formal independence is necessary but not sufficient. There must be genuine independence of thought and action. In present company I am thinking particularly of the independence of thought and action by Boards and by Chairs. If it not actively exercised, independence can become an empty formality.
  4. I want to choose issues that pose dilemmas directly for us in our role as Chairs. Therefore, I am not, for example, going to deal with the possible problem of “phoney” charities where a state service dons charity clothes like Widow Twankey in order to be able to fundraise but doesn’t necessarily change its nature.
  5. So here are the four issues I have chosen to get us started.
  • Do we let our staff do our thinking and visioning for us? Are we sufficiently independent of our staff?
  • Do we constrain our independence by being too risk-averse, especially in relation to speaking truth to power?
  • Are we too dependent on the state or other particular funders?
  • Is our capacity for self-criticism and self-renewal adequate – can our independence sometimes be degraded by routine, habit, and failure to question our own narratives and ways of doing things?
  1. Dependence on Staff: There are many layers here, and the position of very big charities is not the same at that of smaller ones. But in general the staff, working every day, have a huge advantage of expertise and knowledge over the Trustees and it is quite common for Chief Executives to assume they are the “real” leaders and expect the Board, if not to rubber stamp the staff’s decisions, to tweak at the margins if they must, so long as they do not become a serious nuisance to the smooth management of the charity.
  2. Nor is it uncommon for the Chief Executive, in effect, to appoint the Chair and the rest of the Board also. That may be an extreme example, but most of us will probably be familiar with a balance between Chief Exec and Board that is not quite what it should be, and that compromises the ability of the Board to be the independent guardians of mission and values, and challenge staff if necessary as they should. Maybe this is one of the lessons of the fundraising scandals of the past couple of years: it is not enough to leave major functions entirely to the experts. It is not enough to speak when spoken to by the staff and for the rest leave them to manage the charity. Interdependence is the ideal so long as it is genuine. But the stubborn fact remains that we are not doing our job as Boards properly if we are excessively dependent on our staff to do our thinking, visioning, strategizing and due diligence.
  3. Risk Aversion. I am no advocate for being irresponsible, but we fetter our freedom of thought and action if we allow finger wagging by the Charity Commission, or criticisms by politicians or the media, to intimidate us into excessive risk aversion. There are important financial angles to this, but I am thinking particularly of our historic role of contributing to public awareness, informing decision-making and speaking truth to power, ie non-party political activity. When I was in the Charity Commission and we were preparing CC9 (the current guidance on political activity), we found evidence that many Boards were self-censoring to a much greater extent than was justified by charity law. They were buying into the view, not supported by charity law, that there is something inherently suspect, inappropriate or risky about non-party political activity. Of course that is the view of some politicians and newspaper commentators, and some of the general public, and certain destabilising interventions of the Chairman and Board members of the Charity Commission over the last four years have not helped. But in my view we are letting our beneficiaries down if we are not thinking hard about what is the most effective way of advancing their interests, including whether non-party political activity should be part of the mix. So long as Trustees have thought about this carefully and reached their own independent conclusion, the likelihood of any intervention by the Charity Commission at all, let alone any intervention that causes serious trouble to the charity, is remote in the vast majority of cases. Let us not constrain our options by unnecessary self-censorship.
  4. Dependence on a major funder: This is a familiar one. Self-deception is quite common, in my experience, among those who depend largely on a single funder and yet who maintain it does not affect their independence. In the longer run, it nearly always does. One reason for a diverse funding base is financial sustainability, should one major funding source fail. The other is independence, because you can if necessary walk away from a big funder who starts to push you around. This is most commonly, though not always, a state funder. A very senior official in DFID told me recently that, even in the case of INGOs with a strong and mixed funding base, the relationship and discussion with them, being large recipients of DFID funds, was quite different from the relationship with, say, Human Rights Watch which has no DFID funding. The compromise may be worth making, but it is a compromise. The larger the dependence on one funder, the greater the danger. I admire decisions from charities like The Children’s Society and the Refugee Council to reduce radically dependence on commissioning in order the better to set their own agendas, listen to beneficiaries, innovate, and speak truth to power. Not all charities should come up with the same answer, but in all cases the likely perception and reality of long term erosion of independence should be taken honestly and consciously into account.
  5. Losing the Capacity for Self Renewal. Independence of thought and action needs to be a living reality, not a formality. The occasions when we de-clutter our minds from merely keeping the show on the road and make space for going back to our mission and values, and challenging ourselves to rethink our priorities and how we do things, are no luxury, but the way of exercising freedom of thought and action and making a reality of our claims of independence. It is quite easy to be imprisoned by our own received narratives and organisational habits. We may in practice define our role as surviving, keeping things going despite all the odds. Particularly where charities are permanently embattled, AwayDays or similar opportunities for fresh thinking and self-renewal can seem desirable rather than essential. Yet gaining fresh, independent perspective may be the key to finding pathways to overcoming a sense of permanent crisis. And spaces where the Trustees are not merely reacting to propositions put to them by staff, but are themselves shaping the questions and summoning fresh perspectives, are essential pre-requisites of a healthy Board, fulfilling its governance responsibilities in an independent charity. Do we create enough of those spaces?
  6. So there are just four bundles of issues that can pose dilemmas with which perhaps all of us are familiar as Chairs, trying to enable our charities to live up to our crucial claims of independence:
  • Not being sufficiently independent of our staff
  • Excessive risk aversion
  • Dependence on a major funder
  • Inadequate mechanisms for self-renewal and thinking.
  1. I hope you will find plenty to unpack in those bundles and will be able to add your own further thoughts about what can inhibit that independence, and how we can best nurture it. I look forward to our discussion. And those reading this as a blog, please add your comments too.

 

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