To pay or not to pay? That is the question on the lips of charity executive teams as they battle to ensure their boards are fully staffed and filled with people offering the right skills and expertise to guide their organisations.

Finding skilled board members is a tough ask – those with the expertise do not often have the time to dedicate to a voluntary organisation, and those with the time often fail to offer the complex and diverse skills needed. The potential solution – payment of board members – is a contentious one. While some believe it would help to attract the best candidates for board membership, others believe the introduction of a fee, however nominal, would erode the unique ethos of the voluntary sector reducing it to a mere addition to the public sector.

The issue is set to spark debate during this year’s conference season. The Charities Act 2006 widened the scope for payment of trustees and many charities, such as housing associations, already remunerate their board members.

Nonetheless, for Nick Aldridge, director of strategy and communications at Acevo, board payment is still considered a taboo, and voluntary trusteeship remains a defining feature of the third sector. Yet many Acevo members hold a different view. Some say, Aldridge admits, that good governance is more important than retaining unpaid trusteeship. “I wouldn’t say among our members that I’ve picked up passionate opposition [to board payment],” he says. “There are problems getting the right board members to spend the right amount of time on the right issues.”

Aldridge says he does hear concerns that board payment might not be affordable across the entire sector, but less concern about the principle of the matter.

Olga Johnson, chief executive of recruitment agency CR Search & Selection and an Institute of Fundraising board member herself, agrees that payment has its place. She says certain roles, such as honorary treasurer, are particularly difficult to fill with the right candidate. “It’s the most time consuming role,” she explains. “Those that have got the time are not the ones we want, and those that we want haven’t got the time.”

The role also requires accounting skills, again limiting the scope of the search. Johnson suggests a compromise to help improve the make up of boards, paying just the chair and the treasurer to honour their dedication to the job. “There might be a case for paying them but not the others because of time commitments of the roles.”

Financial incentives could also be offered to ensure the trustees are at least partly representative of the charity’s beneficiaries. Johnson, personally involved in a ‘grow your own lunch’ scheme at a local school, expressed concern about the difficulty of getting parents from marginalised and economically inactive homes to participate. “In that case, if there were a financial incentive for unemployed parents that would work,” she says.

To date, little work has been done to canvass opinion on payment of board members, and to quantify any financial impact trustee payment might have on the sector. A spokesperson for the Governance Hub, perhaps the best placed body to carry out such research, said it was yet to work on the issue and had not formed a policy on it.

Today there seem to be few other tools on the table to help plug skills gaps in third sector governance. Craig Dearden-Phillips, chief executive of Speaking Up, suggests that paid non-executives should be drafted in for short-term periods to plug those gaps within the largest organisations, which need the same level of expertise as the largest private sector corporates.

“I think it’s fairly openly acknowledged these days that it’s really, really difficult to get good trustees. The best people are really busy. To get the talent onto our boards that we need we may have to offer a stipendiary payment,” he says. “The most able people on our boards are fantastic but they’re often just not there. A small sum [in payment] means they will be obliged to come. It gives a greater sense of professionalism about the whole thing.”

Another push in the uphill struggle to improve governance would be to allow chief executives to sit on their charity’s board, Dearden-Phillips believes. He says the sense of trusteeship as separating ownership and management is an outdated hangover from the old Victorian charitable trusts, and is no longer relevant to today’s third sector. Instead, he suggests, charities should be looking to the private sector for a model to ensure effective governance.

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Anchor Trust, one of the UK’s largest housing associations and a registered charity, already pays its board members (see case study). But with a turnover of £200 million it can afford to do so. This, points out NCVO’s deputy chief executive Ben Kernighan, is a luxury unavailable to most. He believes board membership should remain a voluntary post, an indication of the ethos of the third sector.

“Our view is that we hold a strong presumption against the payment of trustees,” Kernighan states. “One of the distinguishing features of the voluntary sector is our altruistic values. I think it gives the public, both when they volunteer and when they give money to charity, more confidence when they know that the ultimate decision makers are not acting in any way in self interest.”

Kernighan believes payment of trustees could erode that public trust, and following any public sector governance model of partial payment would be inadvisable. “I think there are lots of very effective boards which are unpaid where the level of skills and commitment is very high. I do understand that argument in favour of payment, but on balance I think it would be very damaging,” he says. Kernighan particularly fears the creation of “two classes of charity trustee” – the unpaid trustee for the smaller organisation, and the paid board member remunerated for the same work on behalf of a larger charity.

Given the breadth of opinion on the debate, it is not surprising that trustees are also split. Karen Heenan, chief executive of the Charity Trustee Network, harbours her own fears that the very nature of the role could be altered if remuneration became typical practice.

“Certainly in our work supporting networks of trustees there seems to be quite a strong sense that trusteeship is about voluntarism, so trustees are doing it and wanting to do it on a voluntary basis. I think the nature of the role would be so very different if it became an expectation of payment,” she warns. The relationship between paid managers and trustees would be first to shift, it is feared. “[Trustees] are holding the organisation in trust and they are morally better able to do that if they are there as volunteers.”

Such is the complexity of the matter that Heenan herself admits that the promotion of diversity in trusteeship raises difficult questions. “Some people who can offer a great deal aren’t in a position to give up that amount of time as a volunteer,” she says. But she believes there are other solutions, such as convincing employers to allow paid time off to carry out trustee duties.

Finally, Heenan concedes that in individual cases payment must be necessary – requests that the Charity Commission already entertains. “The proposal is a really interesting one. I think there might be a situation and a context that would make that possible and positive.”

Whatever the conclusion, trustees themselves should be in a position to influence the debate. If appetite for payment is lacking, and if charity trustees believe the post should remain the pinnacle of voluntarism, another solution will have to be found to the pressing question of inadequate standards of governance.

Case study: Anchor Trust

Anchor Trust, one of the largest providers of extra care and supported housing in the UK, already pays its board members.

A housing association and a registered charity, it has a turnover of £200 million a year. Chair Dianne Jeffrey says it is essential that the charity offers a fee to secure the best trustees to guide the organisation.

“We make no apology for our business-like approach,” she says. “Our board members are experienced and committed enough to make the decisions that secure a long-term future for the organisation – and ensure that we continue to improve the lives of future generations of older people.”

“Housing associations have had the power to pay board members for some time,” Jeffrey explains. “Doing so means we can attract people with the most appropriate skills and they know their contribution is valued. The complexity of our organisation means that board members need specialist skills and experience to carry out their roles effectively. Payment is one way to ensure we get the right mix of skills.”

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