Partner Article

Business Guide: Paula McCormack on the role of a trustee

When we’re developing in our career one of the more challenging roles we can take in order to progress is as a Board volunteer and back in my days in professional services we actively encouraged this.

The purpose is to get a wider business perspective, to actively pursue an understanding of and ability to take greater responsibility and ownership for decision-making.

Over the past couple of years I’ve increasing got involved in working with Boards to develop their strategic thinking and understanding of their roles. For the most part this has been in the voluntary sector so the predominant work I’ve been doing has been with Trustees and Governors who too are volunteers as are the regulations of the Charities Commission. However, many unbeknown, also enter into directorships at this time.

During this period of working with Boards, I’ve been and to an extent continue to be, astounded at the level at which many of these Boards operate, relying heavily on the CEO and senior management teams of the charity/organisation to guide their decision-making and general leadership on where to take their organisations.

There is without doubt both competence and competencies associated with being a Trustee yet many enter into the role because they believe in the charity/cause or organisation, and want to do something constructive and useful, not because they necessarily have the business acumen to carry out the role effectively. When joining a board, there is at times, little understanding of the depth to which they have entered into not only a legal responsibility, moreover that they have signed up to lead an organisation. This takes a little more than just attending a meeting every quarter!!!

Whilst it may look good on a CV, the important thing is that it is useful and beneficial to the organisation/charity. Companies House top requirement on Directorship is to “Act in the company’s best interests, taking everything you think relevant into account”. The Charities Commission requirement of a Trustee is “….have and must accept ultimate responsibility for directing the affairs of a charity, and ensuring that it is solvent, well-run, and delivering the charitable outcomes for the benefit of the public for which it has been set up”. One can only do be a Trustee or Director therefore if one has the knowledge. And its surprising how many don’t!!

My top tips therefore if you are considering either hiring Trustees or if you’re thinking about becoming one are:

• Ensure you understand the organisation and the services they offer; visit its services, meet the staff, interview the senior management team to enable your confidence in supporting the organisation both from a legal and leadership view point
• An appreciation of the extent of your legal obligations is essential (there is plenty of information available on the websites of Companies House, The Charities Commmission and the National Council for Voluntary Organisations). Familiarise yourself with your obligations and the expectations of you as a Trustee.
• You must have a basic understanding of business finance and be able to read a set of accounts and challenge it appropriately
• Likewise you must also have a thorough appreciation for employment law, as in the role of Trustee you are the direct line manager/employer of the CEO
• Have a strategic mind to be able to see beyond the day to day operations of the organisation to direct and guide its future or at least stimulate and challenge its CEO and senior management team
• If the organisation does not put you through an interview and selection process and then an induction its likely that its really only looking for a Trustee in name (i.e. a governance role only).

To find out how Paula McCormack Ltd can help your business, contact Paula McCormack, 11 Maling Studios, Hoults Estate, Walker Road, Newcastle upon Tyne, 0191 275 9444. Email: paula@paulamccormack.co.uk. Website:www.paulamccormack.co.uk

This was posted in Bdaily's Members' News section by Ruth Mitchell .