Time for more focus on the Chief Executive role in Governance?
At first glance, it may seem slightly odd that I, the CEO of Association of Chairs, should ask whether we have been paying enough attention to the Chief Executive’s role in governance. But we know from experience that Chief Executives, like Chairs, have a crucial role to play for good or ill in charity governance. They, with their staff, can be enablers of good governance. They provide crucial support and guidance. They often help the board understand their legal and governance responsibilities, and offer development opportunities if needed. Conversely, at their worst, Chief Executives can undermine governance by providing incomplete or inadequate information; distracting the board from key issues; fostering distrust and division; manipulating recruitment processes or subverting board decisions.
And when relationships between the CEO and the Chair, or the CEO and the board, are strained, it reverberates throughout the whole organisation, and can take months even years to recover from. Both AoC and acevo see this as a key relationship to get right. With acevo we run a regular joint training session on this called Dynamic Duo. AoC also has dedicated resources: Question of Balance is a guide to the Chair CEO relationship, and we have a guide to Appraising your CEO.
Typically governance codes tend to focus on the board members, and certainly the legal responsibility for the governance of the charity rests with the board and not the staff. And of course, the majority of charities are small organisations, often with no staff, so do not have a CEO. This helps explain why the current charity governance code makes just one reference to the Chief Executive. It’s in section 2 on leadership. Clause 2.4.3 sets out the following recommended practice which focuses on the board’s responsibilities towards the CEO:
In the case of the most senior member of staff (e.g. CEO) the board makes sure that there are proper arrangements for their appointment, supervision, support, appraisal, remuneration and, if necessary, dismissal.
But is this really enough? The reality is that Chief Executives have an important role to play.
Should the charity governance code address this important topic in more depth? If so, where should we focus? For example is it the role of the code to provide more guidance on:
- CEO’s role in supporting good governance
- The importance of the Chair-CEO relationship, and CEO-board relationship; raising awareness of warning signs and problematic behaviours and ideas for assessing the health of those relationships
- Clarifying boundaries and expectations including the role of CEO in board appointments and board development, and the importance of avoiding undue influence
- Creating shared plans including working together to plan board agendas and activities, including CEO and staff role in strategy development
- CEO’s impact on culture
- Setting CEO objectives and monitoring performance?
We, the members of the Charity Governance code steering group, are currently consulting on the Charity Governance Code, identifying areas that may need to be strengthened. Let us know what you think. Do you want the code to say more about the role of the CEO in good governance? Do you want us to make small, immediate changes in 2020, or add this to our route map for a bigger revision in 2023? Please do have your say by filling in the consultation document before 28 February 2020.