What’s going on at the Charity Commission?

The Charity Commission is the official regulator for the UK charity sector – meaning it is the nationwide watchdog for all UK-based charities. With that comes enormous responsibility, yet a series of recruitment failings have highlighted considerable flaws in the regulator’s leadership. Here we provide an overview of what has been happening.

Last year, the Charity Commission began recruiting for a new chair of the board, to replace former chair, Baroness Stowell. She was to be replaced by the government’s preferred candidate, former banker Martin Thomas in late 2021, but his recruitment ended in controversy after it emerged that he had been the subject of misconduct claims at a charity he chaired, Women for Women International UK. As a result, Thomas resigned just days before he was due to take up chairing the regulator at the end of December 2021.

So what exactly happened?
Martin Thomas’ candidature had been backed by MPs last year and he was formerly appointed on December 10 2021. He had been due to start his three-year term, in the £62,500 part time role, on December 27.

However, the former banker has announced his resignation from the regulator towards the end of December after it emerged he had been the subject of misconduct complaints at a charity he had previously chaired called Women for Women International UK.

Allegations included sending a picture of himself in a Victoria’s Secret store to a female employee. He resigned as chair of the charity in May following an investigation into bullying related to a different member of staff. The charity had also reported their concerns to the Charity Commission.

It was reported that MPs on the DCMS select committee, who approved his appointment, were unaware of the claims and it was also reported that he is a friend of Prime Minister Boris Johnson.

How did it happen?
The claims made against Thomas were significant and naturally sparked controversy among the sector, with leaders questioning why the red flags were not picked up during the recruitment process. The NCVO said it was “shocked” by the reports of misconduct and said that it is “right he has withdrawn from the role”, but that it was concerned that Thomas was even appointed in the first place.

“That this did not come to light through the recruitment process raises serious questions about the due diligence undertaken,” said the NCVO. “The chair of the Charity Commission must be beyond reproach. These reports risk undermining the important work of the Commission and their role in regulating charities across the country,” added the NCVO.

Shadow culture secretary Lucy Powell MP added that the “lack of due diligence” amid the “serious allegations” around Thomas’ behaviour “is mind boggling”. She is also concerned about the lack of independence of the regulator, given Thomas’ reported friendship with the Prime Minister. Similar concerns were also raised around the previous chair Baroness Stowell, who was a former Conservative minister.

The Good Law Project, which is taking legal action against the government over concerns around alleged politicisation of the Charity Commission chair appointment process, also expressed concerns, writing to Culture Secretary, Nadine Dorries, asking her “to concede that the process leading to Martin Thomas’ appointment was deeply flawed”.

“The independence of the Charity Commission is essential to the future of UK charities, which provide lifelines to countless people and marginalised groups. We will not stand by as its integrity is damaged by this appointment,” the Good Law Project added.

How did the government respond?
The DCMS initially defended the selection process that had appointed Thomas, claiming it was made in accordance with legislation and the governance code on public appointments. “We accept the resignation of Martin Thomas as chair of the Charity Commission,” said a spokesperson. “Martin has acknowledged his error of judgement during the application process and we acknowledge that he entered the process in good faith, without looking to mislead. All due process was followed in the search for a chair. We will now take steps to appoint a new Charity Commission chair and will provide an update in due course.”

However, DCMS officials appearing before MPs earlier this year admitted they could have done more to scrutinise the failed appointment of Thomas. It agreed improvements need to be made, and has pledged to contact the Charity Commission for information concerning charities linked to shortlisted candidates. Contacting the regulator is likely to have alerted recruiters to the claims concerning Thomas.

Appearing at a House of Commons Digital, Culture, Media and Sport Committee hearing, DCMS permanent secretary Sarah Healey admitted that “it is not departmental policy with public appointments to take references”. She also said that increasingly references are not seen as an “important part of the recruitment process in the private sector”.

However, she did concede improvements can be made to the recruitment process, following the failed appointment of Thomas. “We could have gone to the Charity Commission and asked them for any information related to the charities that the shortlisted charities were associated with in any form. We could have let candidates know that we were going to do that,” Healey said.

“And while that has not up until now been a formal part of the DCMS process with regards to appointments to the Charity Commission, we do think it should be part of that process in future.”

What now?
Board member Ian Karet has been covering the role on an interim basis since March last year and was to have stepped down when Thomas was due to take over the role. But following the government’s failure to replace Stowell with Thomas, Karet’s tenure as interim chair has been extended until 26 June. The government has said that Karet’s term as interim chair has been extended “whilst the appointment process for a permanent chair is conducted”.

The NCVO has called for the entire recruitment process to be re-run. The umbrella body’s head of networks and influencing Alex Farrow said: “The NCVO and others called for the whole process to be rerun, and Ian Karet’s extension as interim chair suggests that is the govt’s intention”.

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