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
'Paying trustees could drive commitment, but could dilute
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
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 charity's heart.
Questions also had to be answered as to how the charity's
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?
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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An assignment of rights under a contract is normally restricted to the benefit of the contract. Where a party wishes to transfer both the benefit and burden of the contract this generally needs to be done by way of a novation.
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