One of Britain’s leading business organisations is adapting its training course for company directors to help charity trustees, who are under pressure to become more professional in the wake of the Kids Company scandal.
The Institute of Directors is working with the Association of Chief Executives of Voluntary Organisations on the course for next year. “We need a greater element of professionalism,” said Simon Walker, director-general of the IoD. “When dealing with a charity that is effectively a business, it has to be run in a business-like fashion and that means that the directors have liabilities, which can be very serious.”
Kids Company, run by the high-profile Camila Batmanghelidjh closed in a burst of publicity earlier this year, following the government’s decision to withhold further funding after serious allegations of mismanagement were levelled at the south London charity, rejected by its chief executive.
The chairman of Kids Company’s trustees, Alan Yentob, resigned on Thursday from his position as BBC creative director after facing scrutiny over his possible role in financial mismanagement at the charity and claims that he tried to influence BBC coverage of Kids Company’s collapse.
Mr Walker’s call for greater professionalism was echoed by Sir Stephen Bubb, chief executive of Acevo, which is the UK’s largest network for charity and social enterprise leaders. “One of the problems with our charity sector is that there is a one-size-fits-all model for trustees — it is the same for a cricket club as it is for a charity turning over £100m,” he said. “I’ve often felt that some trustees don’t [understand] the responsibilities that they have.”
The governance and leadership issues exposed by the Kids Company debacle was a “wake-up call for all of us”, he said. “There is an issue about whether the same model of governance should apply to the bigger charities, or whether we should look for a more rigorous approach.”
The UK is home to 165,000 charities of all shapes and sizes. Both Mr Walker and Sir Stephen called for the application of a sliding scale, to ensure trustees of village hall organisations or scout groups would not face the same level of scrutiny as some of the larger charities, such as Age Concern or Cancer Research UK. Both also said that to protect the UK’s centuries-old tradition of allowing anyone to start their own charity, the process must remain voluntary.
City veteran John Spiers, chief executive of EQ Investors and the founder of Bestinvest, the online investment service, also backed moves to increase professionalism among charity trustees. Mr Spiers was a financial supporter of the ill-fated Kids Company, although he declined to state the level of his involvement.
Compulsion was not the answer, he said, but change was needed, particularly for larger organisations. “One could see a situation where any organisation that is getting money from the public sector would be required to have a higher level of experience among its trustees,” he said.
A spokeswoman for the Charity Commission, which regulates UK organisations — and by extension, their trustees — said the organisation had long argued for the need for stronger rules. However, she added: “There is a risk that any system of mandatory training would . . .[create] . . . a barrier for a wide diversity of people to be able to volunteer as trustees.”