STEP

Title Research

Building better boards

  • Author : Clare Yeowart
  • Author : Jane Thomas
  • Date : November 2010
ABOUT THE AUTHORS: Clare Yeowart and Jane Thomas, New Philanthropy Capital (NPC)

When Susan Ringwood took over as chief executive of the eating disorders charity Beat, it was clear there needed to be changes to the trustee board. The board of 16 was drawn entirely from people who had been directly affected by eating disorders, and the charity had no business plan, aims, or objectives. ‘I couldn’t fault the commitment of the board but they and I knew things couldn’t stay the same’, says Ringwood. Today, after going through a major overhaul, Ringwood says the trustees are energetic and engaged. ‘We have stayed true to the core purpose of the organisation but we are stronger as a result of this process.’

It takes time, effort and diplomacy to turn a failing board around. But what exactly does a good charity trustee board look like? And what distinguishes a good trustee from an average trustee?

A good board is about more than just having the right structure and processes in place. How a board operates is equally important. The recent board crises in the City’s banks highlighted this point – it was poor relationships and a lack of constructive questioning within the boards that seems to have been at the heart of their problems.

One key feature of a good board is how well it works together as a team. Part of the success of this lies in having the mix of skills on the board and the right number of board members –while you need a board to be diverse and representative, you don’t want it to become unwieldy. In recent years there has been a positive trend for a reduction in the number of trustees on boards, to help make boards more manageable and effective.

You also need to think about whether you have the right individuals in the right roles. Tesse Akpeki, an independent consultant for Bates Wells & Braithwaite’s OnBoard service and expert in behavioural governance, argues it is not just about having the ‘right people on the bus’ (to quote management guru Jim Collins), but also about whether the right people are in the right seats.

A good board also understands the context in which its charity works. Building up this knowledge relies on regular communication between the board and the senior management. Boards where members do not have a background in the issue the charity addresses should not let themselves be tempted to let management get on with developing the strategy and only ‘jump in’ at the last minute.

Trustees can also bridge their knowledge gap by gaining hands-on experience. The youth homelessness charity St Basil’s has developed an ‘Active Governance Programme’ to ensure that trustees get first-hand experience of the charity’s work. It has a youth advisory board that feeds into board meetings, so trustees hear about the charity’s impact directly from the young people. Trustees also visit each of the charity’s services, to encourage them to consider how each project contributes to the organisation’s mission and values.

Knowledge building should start in the induction process. A structured induction plan should outline the responsibilities of the role and give trustees knowledge of the charity’s purpose, how it works, and the context in which it operates. Induction should not, however, just be a one-off process. Boards should be committed to continuous learning, and induction programmes need to be refreshed over time.

What is more, boards need to review their performance and learn from, and respond to, findings from evaluations. Independent board evaluations can be expensive, so Tesse Akpeki offers one solution to boards struggling to find the money for an evaluation – a ‘trustee swap’. This involves making an agreement with another charity working in a different field to do a peer evaluation. While the process needs to be handled carefully, if done well, the boards of both charities can benefit from a fresh pair of eyes at no additional cost.

Six key areas

For trustees looking to become better board members, there are six areas you should focus on to truly understand how your charity is performing: activities; results; leadership; people and resources; finances; and ambition.

Activities

As the figure at the top of a charity, rather than the front line, it can be difficult to know if your charity is doing the right things. Yet trustees have a crucial role to play in ensuring a charity stays ‘on mission’ and that its activities are geared towards achieving its objectives.

A good trustee should be willing to ask difficult questions, challenge certain actions and make tough decisions. Think of yourself as a ‘critical friend’, giving advice and asking questions in a way that is tactful, structured and informal.

Results

The need for trustees to push their charities to collect results is particularly pressing in today’s political climate. The spending cuts have put charities under increasing pressure to demonstrate that they are worthy of investment.

It is the board’s job to ensure that the evidence a charity collects reflects the mission and vision of the organisation. As a trustee, you need to prevent your charity from losing sight of its purpose amidst pressure from different funders, and encourage it to stay focused on collecting evidence that is meaningful for the organisation. First you need to understand what good measurement looks like and this requires time and effort.

A good board will also share its findings on what works and what doesn’t, so that effective approaches can be replicated elsewhere. The Brandon Centre supports young people with sexual and mental health issues. It used internationally recognised methods to evaluate its work and published the results. It then worked with policy-makers and academics to develop the evidence base for its approach and inform the roll-out of the intervention elsewhere.

Leadership

Ken Olisa, award-winning chair of UK homelessness charity Thames Reach, says trustees are as central to a charity’s success as a non-executive director is to a business. Boards have a crucial role in driving vision and strategy. But as Susan Ringwood from Beat notes, unless the board, the chief executive and the management team jointly own the vision and are aligned to it, working on the strategy is redundant.

People and resources

Staff is the greatest asset that charities have, and working out how to support it, as well as how to make the best use of a charity’s other resources such as IT or buildings, is vital.

It is difficult to generalise about how much contact there should be between trustees and staff. If trustees have no contact with staff it can create problems, such as making it difficult for trustees to pick up if there are issues with the chief executive or management team. In small organisations, trustees will have to ‘get their hands dirty’ more often, whereas larger charities may need more formal conduits for contact between trustees and staff.

Finances

Trustees need to provide authority and direction and to look at finances from a strategic perspective – identifying trends in income sources for example. A good board will also have an understanding of whether a charity’s services are providing value for money, to ensure it is not wasting money on ineffective services.

Ambition

No charity should want to stay exactly how it is forever. As a trustee you should be ambitious and push your charity to maximise its impact.

A good trustee board will look to achieve long-term change by setting realistic, achievable targets and goals. But a vital part of the role’s board is also identifying risks to the charity’s work. To be effective in your role, you should ensure that your charity’s strategy is responsive to changes in the external environment, such as a policy change or a huge rise in demand for services, and adapt the strategy as needed.

Steering charities through the years ahead

The UK held its first ever ‘National Trustees’ Week’ in October and with the ‘Big Society’ calling people to get involved in their communities, trusteeship looks set to become a hot topic.

Yet with nearly half of all UK charities having vacancies on their boards, charities are crying out for professionals to sign up. Legal, financial and HR skills are particularly in demand. Those who have joined boards have found it to be a rewarding experience. Carol Lake, Head of Corporate Responsibility, EMEA, for the investment bank JP Morgan, says being a trustee has given her a new perspective. ‘I was able to apply my skills, but I was also able to refine them and develop new ones,’ she says. ‘I learnt more about what it takes to be a good chair from one chairman that I served under as a trustee than from anything I have directly experienced elsewhere in my career.’

For those already sitting on boards, now more than ever, charities need strong leadership to steer them through a world of spending cuts and policy changes. As Ken Olisa from Thames Reach comments, ‘Boards will have to be more hands on and closer to the executive action until things settle down.’ Trustees need to get more engaged and up their contribution if they are to ensure their charity survives and even thrives in the current climate. We need more good trustees, not just average ones. After all, who wants to be average?

NPC recently ran a series of trustee seminars, which bought together trustees from across the UK to share lessons on good governance. You can read a paper outlining findings from the seminars at www.philanthropycapital.org, along with NPC’s reports on trusteeship, board matters and trusteeship.


Advert

Article Search

Browse jurisdictions by clicking on the map regions below

© 2011 Society of Trust & Estate Practitioners