Corporate chairs – a blessing or a curse?

Chairs who join the charity sector from corporate backgrounds can struggle with the transition. It’s our job to make the governance differences clear.

My first dog, Mabel, was a dream. She was the most co-operative, calm, wonderful creature. Her successor, Arthur, thinks he is The Boss and therefore has the right to appropriate food/shoes/household items as he pleases!

But that’s our fault entirely. We haven’t properly taught him the rules, so we only have ourselves to blame!

This brings me to charity chairs. I have seen some really powerful relationships between chairs, boards and chief executives. But, to be honest, I have probably seen more that don’t work.

The most problematic have tended to be chairs who are parachuted into charities from corporations. Some of them have been excellent – but it’s been my experience that many struggle to make the transition.

In fairness, it is often not really their fault. There is an assumption that chairs from corporate backgrounds will automatically understand that there are differences between charity governance and corporate governance.

These differences play out in law, in practice and in navigating the sometimes conflicting demands of funders, volunteers, beneficiaries etc, not to mention the complexity of charity accounting and reporting.

In the corporate sector the chair often has a lot of power and decision-making authority. In our sector, by law, they have no special role or powers unless their governing documents specify otherwise, which is rare.

Chairs also have no more accountability than anyone else on the board. If they make a bad decision, unbeknownst to the rest of the board, the whole board will be held accountable regardless. That is what the law says. One goes down, you all go down.

In charities every trustee is equal, regardless of role. Some take on roles in order to operate more efficiently, such as chairing a sub-committee, but those roles do not confer special powers in law.

Even the special relationship that chairs have with their chief executive can confuse. The chair is not the boss of the chief executive. The chief executive is accountable to the whole board. The chair is delegated by the board to manage the relationship.

But I also think that boards themselves don’t help. So many simply abrogate their responsibility to the chair. I’m not sure why. Possibly treating the chair as the boss is easier and takes the pressure off them, or they don’t have the confidence to challenge them?

I’m not saying you shouldn’t appoint chairs from corporate backgrounds. But before you do, make sure they understand the difference in the role so that they will be able to make the transition to the weird and wonderful world of charity governance more effectively.

When you are interviewing for your chair, include questions about the difference between corporate and charity governance and ask how they would approach it.

Ensure that their induction doesn’t just focus on the work of the charity but they also get training in charity law and the governance code. Get them to join the Association of Chairs.

And, obviously, buy them my book, It’s a Battle on the Board, which clearly explains what is expected of them. In fact, buy a copy for every trustee (please note, I don’t benefit personally – all the money goes to my charity).

Whether you get Mabel or Arthur is largely down to how you recruit and train. Get it right, and the relationship will be wonderful.

This article was originally published on the Third Sector website, take a look here.