An accountable board
Rodney Buse identifies the different models of board accountability and beneficiary representation
KEY POINTS
- Elected representative trustee boards are under threat
- Co-opted trustees for skills injection is an increasing trend
- Better models are needed to improve accountability and transparency
The twenty-first century is demanding charity boards become ever more competent and professional and for boards to be more skills based. There is also a twin demand for charities to be more transparent and accountable. Elected representative trustee boards are under threat and some charities are thinking very carefully about two key issues:
- the source of legitimacy for board appointments; and
- processes and structures for securing a mandate to speak for, and on behalf of, members and a variety of stakeholders.
Models of board selection
Two models of board selection have traditionally dominated the scene. There’s the democratic model, where trustees are elected from and by the membership. And the board that selects and elects its successor trustees, where members either do not exist or have little or no effective voice. Throughout this article the word members is used generically not restricted to the legal form.
A middle course is becoming more common and a trend has developed for two or three trustees of membership bodies to be nominated and appointed for their particular skills in addition to trustees elected from the membership.
Basis of appointments
There is some evidence of pressure for there to be a greater number of appointments based on skills.1 It is argued that members can provide these skills, but such members can be hard to find and difficult to persuade to take on trusteeship roles. Such boards can also suffer from a lack of diversity. If this trend is to develop there will be a greater need to establish sound structures and process. To ensure that trustee boards do not become separated from their members and as a potential consequence lose the mandate to speak on their behalf.
This raises and exposes the issue of what structures are in place to hold the trustee board genuinely accountable and for providinga mandate to speak on members’ behalf? This question might traditionally have been addressed at the charity’s AGM but many AGM’s are more form than substance and by their nature are restricted to annual events. This question is particularly relevant if the election and retirement of trustees is not subject to effective external scrutiny or influence.
Some charities are beginning to recognise a number of stakeholders as their members. They include: formal members, free membership, reference groups, members who sign up to web-based newsletters, volunteers and supporters. As an interested stakeholder in a number of charities it is valuable to explore the web to see what structures exist to provide legitimacy and accountability by charity boards. There are many examples of good practice but it is also notable that some of our largest and best known charities fail to make their structures and processes transparent.
Structures and processes
Four charity board models are explored further:
1) The oversight council of members.
2) The representative assembly with powers as the legal members.
3) The representative assembly without powers.
4) Consultative bodies.Some examples follow to illustrate these models. They are listed in order of their members’ ability to hold the trustee board fully accountable.
In summary:
- Model 1 – provides members of the council with powers set out in the memorandum and articles to require the trustees to be fully accountable to council for their actions. The council is not restricted to voting in trustees but may set strategy and policies.
- Models 2 to 4 – maintain some powers for members but with diminishing scope for directly holding the trustees to account.
Other models, such as advisory boards/ councils and web-based reference groups, offer the opportunity for views and opinions to be expressed with few if any powers, but with influence emanating from the collective voice. These models are growing in popularity and deserve separate consideration.
Model 1: The oversight council of members
The Science Council was established under Royal Charter in October 2003 and was registered with the Charity Commission in September 2009. The principal activity of The Science Council is to promote the advancement and dissemination of knowledge and education in science, pure and applied, for public benefit. An amended charter received Privy Council seal on 10 December 2008.
Structure and governance
The Science Council is a membership organisation governed by a board of trustees answerable to the council of all member bodies. The board of trustees is chaired by the president and there are currently ten elected trustees and one co-opted trustee. The full council agrees the strategy, policies and priorities of the Science Council. They also elect the president and the board of trustees. Council meetings currently take place three times a year and one of these meetings is the annual general meeting.
Board of trustees
The trustees are responsible for the overall governance and management of the Science Council and for ensuring that the Science Council meets its charitable objectives.
Observations
The Science Council has some 25 organisational members, which enables this structure to be effective. It is important that members feel part of the council and can contribute effectively to its voice and development. In agreeing strategy and policies the council fulfils its key role of bringing together potentially divergent voices. Importantly the trustee board benefits from this degree of commitment but reserves the right to take such decisions to ensure that the charity is acting legally within charity law.
Model 2: The representative assembly with powers as the legal members
Diabetes UK's governance arrangements have been designed to ensure that the charity represents and engages efficiently and effectively, with its broad range of members and other stakeholders.
Structure and governance
There is:
- a board of trustees with up to 12 members.
- a UK Advisory Council (UKAC) made up of two councils – the council of people living with diabetes (CPD) consisting of 30 members and the council of healthcare professionals (CHP) with 20 members.
- an involvement network which allows people from across the diabetes community to participate flexibly in consultation and focus groups.
- A UK Advisory Council (UKAC). The members of the UKAC are the company law members of the charity and have all the powers of the members as set out in the Companies Acts and the memorandum and articles of association of the charity.The role of the UKAC is to:
- elect and hold to account the board of trustees;
- advise on the charity’s overall strategic direction;
- act as legal members of the charitable company;
- lead the expert working groups and national advisory councils; and
- maintain effective communication between the board and individuals on the expert working groups and national advisory councils.
The UKAC is supported by national advisory councils, task and finish groups and expert working groups.
Observations
Diabetes UK presents a very comprehensive model of good practice that addresses both the issue of accountability and that of a democratic mandate. The board's membership includes people with diabetes, their carers, healthcare professionals and researchers. Each of the four nations of the UK is represented, as are a range of ages and cultural backgrounds. The web informs us that, collectively, this gives the board the authority and perspective it needs to act in the best interests of the diabetes community. The UKAC, as formal members of the charity, benefits from its ability to lead expert groups and the national advisory councils so that it is in a position to exercise genuine influence over the trustee board.
Model 3: The representative assembly
The NCVO members' assembly complements the work of the NCVO trustee board and ensures that NCVO members are represented and involved in its work; contributing to the development of new and emerging thinking on public policy issues and providing input, information and advice as public policy positions are developed. The members' assembly role is to consider debate and advise the trustee board on policy matters and wider issues affecting the sector. It includes:
- The chair of the board of trustees.
- Forty elected members from NCVO's electoral colleges.
- Ten members elected by the members' assembly who bring the perspective of wider civil society.
- Other than the chair, no trustees of NCVO are members of the assembly but are encouraged to attend the meetings. Members of the assembly are elected for a term of three years and may stand for one further term of three years.
- All NCVO members are asked to self-select one electoral college that reflects their area of operations. Organisations that work nationally join one of 11 thematic colleges. Organisations who work locally or regionally join one of nine regional colleges.
Assembly members are expected to engage in discussion and debate at meetings of the assembly, informed by the views of their electoral college. Meetings of the assembly are conducted using a range of methods and using new and emerging technology to ensure that all voices are heard and contributions valued and aims to be innovative and inclusive.
The assembly meets twice a year in May and October. One meeting takes place in London, and the other outside London, usually at a venue occupied by one of NCVO's members. In between meetings, assembly members are expected to develop their knowledge and understanding of issues of importance to their electoral college and to report back.
Observations
The NCVO members’ assembly plays an important role in providing input, information and advice to the charity and is structurally representative of NCVO’s membership. As the assembly will consider debate and advise the trustee board on policy matters it provides NCVO with an important mandate to represent their views. NCVO also benefit from an advisory council that offers insights from a wider perspective. Neither the advisory council nor the assembly appears to have powers to hold the trustee board to but it is noted that seven of the 12 trustees are elected from the membership.
Model 4: Consultative bodies
In 2009, RNIB established two consultative bodies:
- A UK member’s forum, supported by regional and country member forums.
- The Vision 2020 Voluntary Sector Forum.
UK Members’ Forum
The UK Members’ Forum is a place for representatives of RNIB members to come together and discuss the issues of importance to them. These issues go forward to the board of trustees. This gives members a direct link to RNIB's most senior governing body and will help with identifying and shaping major strategic, policy and service issues. It met for the first time in March 2010.
To support the UK members forum, local member forums have been set up – nine in England, and three in Scotland, Wales and Northern Ireland. This will help members to influence RNIB and also to provide more local events and interaction between members. All RNIB members are being invited to the forum meeting nearest to them. Each forum will choose representatives to the UK members’ forum.
Vision 2020 Voluntary Sector Forum
The Vision 2020 Voluntary Sector Forum is not an RNIB-owned body – it is part of Vision 2020 UK. This is a body that enables the national organisations of, and for, blind and partially sighted people to come together as equal partners to talk about issues of importance to the sector, including how organisations are contributing to the development of the UK Vision Strategy.
Observations
Like many charities, RNIB has a members’ forum but importantly its role is to help with identifying and shaping major strategic, policy and service issues. This is a broader remit than many and enables the charity to be properly influenced by an active membership. Whereas the role of the forums may not be to hold the trustees to account, the Vision 2020 Voluntary Sector Forum has a special role to play. It is acknowledged that it is not an RNIB-owned body and as such marshals the interests of the sector. This may provide the opportunity to ask each member of the forum to marshal their efforts effectively but there may be limited powers to hold member trustee boards to account.
Further best practice
There is much to learn from the examples captured in this article, but there are so many more developments taking place as the sector increases its accountability and transparency. There has been a debate over a number of decades that asks what gives the right for charities to campaign on behalf of their beneficiaries.
We need more tangible examples of good and best practice that can inform governance reviews in the future. Ignoring the two key issues identified in this article may undermine the authority and reputation of charities and the sector at large.
1. See also: www.charitiesdirect.com/caritas-magazine/governance-where-is-your-board-heading-746.html
Author: Rodney Buse
Rodney Buse chairs Charity Trustee Networks and has served as a member of the code steering group throughout the development of the second edition.
He undertakes a limited number of governance assignments with a focus on the structures and behaviours that drive organisational effectiveness.
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