Trading places?
Nick Sladden considers the governance implications for charities with trading subsidiaries...
Charity trustees have a fair understanding of their responsibilities, but many struggle with a full understanding of how trading subsidiaries fit into the governance picture. The problem lies in the fact that trading companies are established to generate profits whereas charities are set up to serve the needs of beneficiaries. Crudely, in financial terms, one needs to earn money for the other to apply it and this may result in different motives for each board.
Author: Nick Sladden
Nick Sladden is head of Baker Tilly's Charities and Education Group in the south-east and responsible for a portfolio of charities, independent schools, academies and other not-for-profit organisations. Nick has written and lectured on sector regulation as well as governance issues and is also a trustee for a hospice.
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