December 5, 2012
To pay or not to pay
Every so often there is a debate over whether the trustees of charities should be remunerated – over and above ‘reasonable out of pocket expenses’. Those in support of the proposition argue it would increase the quality and quantity of individuals prepared to give their time to the charity. Those against argue it would undermine public trust and runs against the ethos of the sector. It surfaced again recently in England. No reason that it won’t do the same here.
Sirs Stuart Etherington and Stephen Bubb outlined their differing views on the issue of trustee remuneration when they appeared before the Public Administration Select Committee this morning.
After Sir Stuart told the committee that the NCVO’s view opposing relaxation of the rules around paying trustees was shared widely within the sector, Sir Stephen muttered: “They are wrong”, to which Sir Stuart retorted: “I don’t think they are wrong Stephen, if that’s what you said.”
Sir Stephen had opened the debate on paying trustees by refuting the assertion by committee chair Bernard Jenkin MP that the issue was a “hornet’s nest”.
He said it has never been illegal for charities to pay their trustees, but the process of getting permission from the Charity Commission to do so is a “tortuous” one. Lord Hodgson’s suggestion of allowing large charities to facilitate payment without bothering the Commission is “entirely sensible”, he said.
Bubb, chief executive of Acevo, pointed out that three-quarters of his members did not think they would want to pay their trustees anyway, but 25 per cent could envisage doing so.
Asked by Jenkin what problem this suggestion by Hodgson would address, Bubb said it would increase trustee diversity, improve the skill level of boards, and boost trustees’ professional engagement with the role.
But Sir Stuart, CEO of NCVO, argued that the voluntary principle of trusteeships “goes right to the heart of charity”, and is of utmost importance in preserving public trust in charitable endeavour.
“It is the wrong time to introduce measures of this kind,” he said. “The existing measures are not tortuous or onerous, they are pretty straightforward.
“Ultimately it would have very damaging effects on public trust if charities could pay whatever they wanted with no checks or balances in the system. There is also the slippery-slope argument, that there would be pressure on other organisations to follow suit.”
Etherington also rejected Sir Stephen’s stated reasons for supporting the change, saying there was no evidence that paying trustees would attract new skills to boards, nor that it would broaden the potential pool of candidates.
But Bubb went on to remind the committee that historically staff in charities were never remunerated, and that the move to paid CEOs and staff had not resulted in a loss of trust and confidence.
He added that those of his members that had attempted to get Charity Commission approval to pay their trustees had found it “extraordinarily difficult”. He cited the example of the RNIB, which pays its chair because he had to give up other work to take on the very demanding role.
“Why should we be able to say to these charities that they can’t pay their trustees if they want to?” Sir Stephen asked.
Committee chair Jenkin asked Bubb whether RNIB would want to pay its chair if it wasn’t such a wealthy charity, to which Sir Stephen said: “I don’t know”.
Jenkin concluded the session by saying: “Isn’t there something intrinsically special about the fact that the people who have ultimate responsibility for our charities do it as a voluntary effort, as citizens, often because they want to give something back? Doesn’t paying trustees undermine that principle?”
Bubb responded that he didn’t think we would ever get to a point where most trustees are paid, and in fact the change that Lord Hodgson is proposing is “not a big change”.