Trustee remuneration is a topic that will not go away

Trustee remuneration is a perennial governance debate in the charity sector. Every so often a governance failure will see sector commentators question whether the governance arrangements in charities are fit for purpose and whether paying trustees would improve diversity, professionalism, decision making, performance and accountability. Arguments for and against the option run wide and deep – this was certainly the case at a recent roundtable discussion I held on the topic.

It was acknowledged that, in an ideal world, there would be no need to pay trustees. However, those in favour of the option to pay trustees without having to go through the Charity Commission process thought it would give charities the additional freedom and flexibility to recruit individuals capable of becoming exceptional trustees from a wider pool of talent.

For others, the issue of payment did not mean that busy individuals would suddenly be able to 'magic' extra days and hours to do the job, nor would it necessarily mean that they would be more competent at the role than those that were unpaid. There was some agreement among participants that it would be difficult to prove a link between paying trustees and improved governance.

'Paying trustees could drive commitment, but could dilute decision-making'

Paying trustees was seen as one way of holding them to account in a more formal and structured manner. Where a charity pays trustees, it was argued, the charity should have an expectation of trustees to perform their role and duties to a higher level with more formal procedures in place for board review and individual appraisal. Where performance is sub-standard, removal should be easier to approach and execute. A contractual approach to the role would therefore make the environment more business-like and professional.

Those less in favour of paying trustees raised the importance of the voluntary principle and the need for trustees to have some empathy, as a minimum, with the cause at the charityÕs heart. Questions also had to be answered as to how the charityÕs members, beneficiaries and supporters would react to such a proposal and whether board remuneration would have an adverse impact on public support and confidence in the sector. It was further noted that paid board members have not avoided governance scandals and poor organisational performance in other sectors.

'Professionalism is a state of mind'

All participants agreed that it is essential that quality candidates are required on charity boards, with a clear expectation as to what the role involves and an appreciation for the work of individual trustees. It was agreed that trustee training is essential, with one participant asking how much training could be purchased for the board with the money saved from remunerating a trustee. The role of the Charity Commission was further presented as needing to be strong and effective if trustees are to fulfil their legal duties appropriately.

Trustee remuneration is always going to attract divided opinion, but is an option that is not going to apply to the vast majority of charities that have no paid staff or significant sums with which to pay board members. For larger and more complex charities however, the need to attract suitably qualified, diverse and experienced trustees may mean an increase in the actual numbers of trustees being remunerated. Either way, charities that pay or do not pay should be transparent in the reporting of such matters to ensure the charity’s stakeholders and the wider public understand how the board is recruited, rewarded and how effective they are at governing the charity.

‘Let’s have a heated debate’

Trustee remuneration is a topic that will not go away and given the range of arguments at play in the debate it is likely to generate considerable heat in the current legal framework governing charities. Everyone’s opinion is valid – and welcome – so what do you think?

Louise Thomson, FCIS is Head of Policy (Not-For-Profit), at ICSA: The Governance Institute

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