Karen Brown: “Why would you want a lawyer on your charity board? Why wouldn’t you?”
We recently welcomed Karen Brown to BCKR to share her thoughts with us.
When asked the question why would you want a lawyer on your charity board, Karen’s response would be – why wouldn’t you? Maybe the better question might be “why would a lawyer want to be on a charity board”?
Things have changed dramatically in the last 5 years. There has been a huge shift in governance with the external environment requiring much more formal governance procedure to be in place. Some charities are still adjusting to this.
How lawyers would be viewed on boards depends very much on the lawyer. Boards are there to help create an environment where the organisation can take risks but achieve its mission safely.
Enabling lawyers were the ones Karen liked when she was working in broadcasting. The prejudices against lawyers are well known – that they have a tick-box mind-set, aversion to risks etc. – but Karen is yet to come across one of those. Lawyers’ experience is all about dealing with messes and they are able to bring:
- Good analytical skills
- All round abilities
- The right questions to ask
- Values that match the organisation
- Strategic brain
They are people who know how to flex, roll up their sleeves, advise at times and insist at other times.
We overlook the point that lawyers have a far broader experience than they are generally credited with, managing large businesses dealing with many of the same issues as other organisations. Issues around law and fundraising are under-resourced in terms of legal support within charities so it can be very useful to have a lawyer on your board.
How does selection work?
Some charities only use search agencies for Chair recruitment. But the principles are the same whether the search for trustees is being done through an agency or by the organisation itself – so building your networks is the first task.
Usually, the board will go through a standard skills audit and look for the experience that is lacking. Look at the diversity of the existing board in terms of all protected characteristics e.g. gender, BAME, also where you live, socio economic mix, age etc and mode of thinking (lateral, creative, strategic).
Achieving the optimum board skills can be a difficult balance to strike. Very often, recruiting organisations can be blind to the breadth an individual can offer. So it is up to you – the applicant – to demonstrate that.
Expect to prep hard. Quite often a potential trustee gets turned away only to be appointed at a later date. It is important to understand the reasoning behind a board’s decision not to take you on. Get to know the organisation better, if appropriate, and apply again.
Another route to board appointment is to do other volunteering for the organisation such as supporting the legal department, being on a sub-committee or doing a piece of work for the organisation.
How do you decide if the organisation is right for you?
Think about what your interests are.
- Do you like large or small organisations?
- What drives you? You need passion for the organisation. Think hard about whether you are prepared to be up at night worrying for them.
- Do your due diligence – think about what might go wrong.
Due diligence – how do you start the process?
- Ask questions.
- What does the organisation say about itself?
- What do others say about the organisation?
- What are the main issues facing the organisation?
- Insist on talking to the company secretary.
- Check regulatory record.
- Check fundraising practices.
- Spot check e.g. Is their website compliant?
The most important thing is to have an understanding of the organisation’s culture. Talk to other trustees (including outgoing trustees) though choose carefully. Meet the Chair and CE.
How do you diagnose the functionality of the board?
- Ask questions and listen out for ‘weasel words’.
- Look at annual governance review.
- If you are offered the role but feel that you need more information, you can say yes subject to further due diligence.
- The risk is usually not so much what is known (but perhaps not disclosed) but the information which should have been known but isn’t.
- It may be useful to talk to the Finance Officer too.
Lawyers on boards provide mixture of advice and insistence but avoid being an unpaid professional adviser. It has always been the right of trustees to get legal advice paid for. Obviously, a lawyer on a board should not be the provider of that advice (while still giving their views and suggesting sources of advice).
Lawyers on boards should be aware that they will be held to a higher standard in carrying out their role given their professional background.
How do you get the best from board members?
Be clear with each other about requirements and expectations.
Conduct annual reviews. Give feedback.
Understand things from the organisation’s perspective.
There is nothing grand about being the trustee of a charity. Think of yourself as a servant.
It can be incredibly rewarding, working with brilliant people doing extraordinary work.
The important point is never to lose sight of the mission of your organisation.
Have you seen lawyers exploited?
The very nature of being a trustee in the charity sector is in part to be exploited for your experience. When inappropriate, you can say no.
The Charity Commission guidance is very vague. Regulators seem to deliberately leave requirements that way with considerable scope for interpretation. They then, in retrospect, hold you accountable.
Oxfam and others have been working on how law firms can provide help to charities in a pro-bono way. Firms could make a huge contribution to the charity sector not just through being trustees e.g. there might be scope for joint procurement to increase opportunities and reduce costs.
It is very important to have at least one trustee with finance expertise on the board, who understands accounts. Finance is such a crucial aspect of a charity’s success and survival.
If you look at a number of charities in crisis, a common theme is that they are doing good but feel they are above compliance with the rules at the same time. This challenge is not helped by the volume of guidance on the rules by lawyers, accountants and the Charity Commission but without these, charities do not have the know-how to put the rules into practice.
Some suggestions for strengthening governance
– For trustees ideally, there could be a simple core set of guidance – with an online test to be completed before becoming a trustee.
– There should be more reliance on audit and external reviews.
– Trustees shouldn’t be paid – but for larger charities the model could be a supervisory board made up of (unpaid) NEDs responsible for governance and an executive board made up of senior executives responsible for management.
– Charities need to spend more money on governance and resource areas of concern.
A large proportion of the country’s services in social welfare and the education sector are delivered by small charities. The country is increasingly dependent on them.
Challenges facing the charity sector:
- Charities don’t have the resources for dealing with a media crisis, where there will generally be a long period of being scrutinised by the press.
- Need to draw a distinction between charities who are also contractors and other service providers.
- There is a proliferation of ‘any one can have a go’ small organisations, with inherent weaknesses (including approaches to compliance with the rules).
- With so many different challenges for the sector, the Charity Commission lacks the resources to address the issues.
- Small charities, with few to no employees at all, are subject to the risk of founder’s syndrome or abuse of the charity.
- It is easy to characterise organisations as thinking the mission is more important than the meeting the rules. Having said that, some rules are a major impediment to the mission of some charities. For instance, the money laundering/banking rules make getting cash to a disaster zone safely virtually impossible.