Sir Nicholas Young: Lawyers know how to ask the right challenging questions – a much-needed skill in a Trustee
We recently welcomed Sir Nicholas Young to BCKR where he shared his thoughts with us. He began with some facts about the voluntary sector.
It is a huge sector with 170,000 charities in the UK with a combined total income of £45 billion per year. Add in housing associations, private schools the total yearly income reaches £73 billion compared to, for instance, the car industry (£71 billion) or the farming industry (£5 billion).
Of the proper established charities about:
- 45% of their income comes from the public/individual donations
- 30% comes from central and local government in the form of contracts/fees for services provided.
- 25% comes from trusts, investments, lottery funding etc.
Charities are hugely diverse in their make-up.
- 34% have an income of less than £10k per year
- Only 2000 have an income over £40,000
- Just 40 have an income over £1million
As a sector they employ 765,000 staff most of whom are part-time. This represents 3% of the total UK workforce. There are 14 million charity volunteers in the UK who volunteer at least once a month.
Nick started his career as an M&A lawyer at Freshfields. After 5 years, he took time out and went back-packing with his wife. On their return they left London and moved to East Anglia where he joined a small legal firm but a had nagging feeling that his interests didn’t really lie in making big businesses even bigger.
Sue Ryder was a local charity to him, with nursing homes in the UK, 50 homes in Eastern Europe. Nick contacted their head office and ended out being put straight through to Sue Ryder herself. The next day he went to meet Sue and she spent ½ a day with him talking about her life. She was in the SOE and had worked with survivors of the concentration camps. After their meeting, they established a relationship and eventually she persuaded him to quit the law and join her organisation.
He stayed for 5 years at Sue Ryder Homes, but it was the organisation was the ‘founder’s child’ and that meant that many of the ideas Nick had for putting the organisation on the right legal footing were met with resistance. A complex relationship to manage.
He left and went to the Red Cross which at the time was an organisation which had lost its way. The management and trustees had fallen out. The organisation had undergone huge changes after the war with the introduction of the NHS. In the following 40-50 years they got involved in a variety of different things. Essentially it was organised like 93 separate county charities. Nick was brought in to run ‘the UK’, but given its structure, it took a while to modernise. With his legal hat on, looking for a way to collapse the structuring, he realised that the trustees were unaware of their personal liability in their roles and when Nick wrote to them to highlight this fact it made a lot of trustees sit up and think and subsequently leave. Restructuring was underway!
After 5-6 years with the Red Cross he left to join Macmillan Cancer Support as their Chief Executive. This was a wonderful, slightly happy go lucky, organisation. They had very dedicated volunteers who raised lots of money. The relationship with government became very interesting. A little before Tony Blair was elected, Nick had a meeting with Chris Smith (shadow Health Secretary) and Harriet Harman. He sold them the idea that they needed a strategy to counteract the post code lottery in relation to cancer care services. During that meeting Harriet realised that this could be a great mandate for their manifesto and when they came to power, there was a transformation of cancer services. Macmillan was then able to work closely with government on a strategic level. Which was very interesting.
After 6-7 years Nick went back to the Red Cross as their Chief Executive running the UK and overseas. At the time they had a deficit of £14 million so needed a restructuring. He only stepped down from that role quite recently.
The governance of charities is becoming increasingly important issue due to the public’s waning trust in charities in general. This concerns particularly the charities’ relationship with donors and potential donors, and, since the Oxfam crisis, with ensuring the safety of beneficiaries. That crisis has been a huge wake-up call for charities, heightened by the fact that The Charity Commission’s role is now that of the regulator rather than there simply to support charities. This leaves a lot riding on charity trustees, who now have a big responsibility for people who are part-time volunteers. For large charities in particular, it is a weighty responsibility, and trustee boards have found it difficult to get to grips with the public scrutiny.
So, there is a real need for better trustees and a better relationship between trustees and the management.
What makes a good trustee?
- Passion and enthusiasm
- Relevant expertise and experience
- An ability to ‘bring it to the table’. To challenge management. To ask the right question.
- Time commitment. Charities will always want more time they have asked you for.
- To have the ability to strike the right balance between support and challenge. There should be a creative tension between management and trustees.
In big charities it is an oversight role. In small charities you need to be prepared to roll up your sleeves and do a bit of everything.
Working with volunteers is a challenge. You can’t manage them in the same way you manage staff in the private sector. It requires patience and understanding. It is important to understand that the staff are there to support the volunteers and channel the volunteers’ passion constructively.
Lawyers – why do relatively few trustee boards have lawyers on them?
One great skill a lawyer has is the ability to get to find out what the real problem is. To ask the right challenging question. There is much need for these skills on trustee boards and Nick is always keen to encourage other lawyers to join the sector. It will offer you the chance to feel good about ‘giving back’ and also to have fun.
- There are lots of recruitment consultants to help you get charity roles e.g. Saxton Bampfylde, Spencer Stuart and Odgers being the main ones.
- The key is to do something that really interests you. Make sure the organisation supports its trustees
- Be clear about what you are taking on in terms of time commitment
How difficult is it to sit on the board of a charity verses a listed company?
The gulf is not so huge between the two. There are greater differences between a sitting on the board of a small or large charity. There is a gap in the support for charities, left by the Charity Commission’s role now being that of regulator rather than to support.
Is the lack of lawyers on boards a problem sitting at the desk of the headhunters?
When Nick went to see a charity headhunter they questioned why he would want to leave the law! Lawyers are still perceived as one dimensional “we don’t need a lawyer now”. Lawyers need to get better at marketing their business skills:
- A good understanding of how organisations are structured and work.
- A general understanding of law is incredibly valuable to a board.
- A commitment to doing things the proper way.
Are there too many charities in the sector? How should the problem be addressed?
As an example – there are 700 charities with the world ‘cancer’ in their title. There isn’t an obvious answer how the government can stop people wanting to help other people. It is hard to halt the passion of volunteers. There is an absence of collaboration. Perhaps this is an issue lawyers could push to the forefront.
Are there sectors where there is more need for trustees to join their boards?
Organisations do struggle to get trustees in the ‘un-sexy’ sectors such as mental health, prisons and crime, refugees and INGOs, partly due to reputational exposure.
Where should you start your search?
- Define which sector interests you.
- Go to a headhunter that specialise in charity trusteeships
- Research a charity you are interested in and then approach the Chief Executive or Chair. You’d be surprised how welcome these types of approaches can be.