Arguably one of the most important relationships in a not-for-profit organisation is the one that exists between Chair and CEO. These two figures represent the interface between governance and management so it is crucial that the relationship is a healthy one. A poor Chair/CEO relationship will seriously undermine good governance and has potentially disastrous consequences for the organisation as a whole. Here are a few helpful suggestions for both Chair and CEO to ensure that a healthy relationship prevails.
A careful balancing act.
No Chair/CEO relationship is perfect, problems will inevitably arise and disagreements will be had. Whilst perfection is unattainable, the CEO and Chair must be able to foster a relationship that can bear the brunt of any hitches that will undoubtedly occur along the way. For the Chair, fostering such a relationship with his/her CEO calls for a careful balancing act. He/she must be supportive of the CEO but must also be willing to give constructive criticism whenever appropriate. A useful reminder for this is what Dorothy Dalton in her guide Good Governance: the Chair’s Role terms, being a ‘critical friend.’ For both, a relationship built on mutual trust and respect is essential.
Communication is key.
Having good lines of communication between the CEO and Chair is essential for the well-being of any organisation.
It must be remembered that it is the responsibility of the Chief Executive to present the board with all relevant information on the current state of the organisation in terms of both progress made and challenges faced. Whilst it may not always be good news, it is vital that information is presented in an accurate, balanced, timely and succinct way. Keeping the board in the dark is counterproductive and will create an air of mistrust.
Together the Chair and the CEO stand at an important intersection. It is essential that they communicate clearly and openly with each other so that all relevant information can be passed on to either the board or staff.
Walking the management/governance divide.
In order to avoid a situation where the board moves into management territory or the Chief Executive into governance, it is advisable that the Chair and Chief Executive take time to set out an agreed framework which clearly delineates their respective roles and responsibilities. Whilst this is advisable, things are also never that clear cut and although one might hope for an absolute separation to exist between the two, realistically this is not always the case. There will always be occasions where overlap is unavoidable. As Richard Chait in his book ‘How to Help your Board Manage Less and Govern More’ writes,
“…we do not wish to portray the distinction between management and governance as being absolute, nor do we wish to suggest that trustees and Chief Executives must endure a relationship in which one never enters the others primary domain. Governance is too complicated and too dynamic to be reduced to some inviolable division of labour. We mean to suggest only that, on the whole, boards should be more concerned with governance than management”
Moreover, it must be remembered that in addition to playing leadership roles in their respective domains, the CEO and Chair must also act as a partnership, providing joint leadership to the organisation as a whole.
Although by no means an exhaustive list, we hope that these three pointers will help steer CEOs and Chairs in the right direction. The well-being of the organisation is very much premised on the relationship that exists between Chair and CEO as it is they who must work together to provide joint leadership. Of all the relationships that exist within an organisation this is the most important one and the time given to ensuring that the relationship remains healthy should reflect this.
Our annual CEO & Chairs Training day is taking place on the 1st of December 2014 in Dublin 2. This training fills up quickly so please be sure to book early to avoid disappointment. For further information of to book a place, please contact Eva Gurn at email@example.com or call the office on 01-671 5005.
The performance of any not-for-profit organisation is underpinned by the relationship that exists between the CEO and Chair. The training explores this critical Management/Governance interface, and is relevant to both seasoned practitioners and those just stepping up to the top job.
The full-day training course is delivered by Governance expert Dorothy Dalton. Dorothy is editor of the UK-based Governance magazine and a prominent figure in the area of good governance training. Throughout her career, Dorothy has advised several leading national charities on their governance structures and has published a number of short books on the area of good governance in the charity sector. Click here to visit her website.
Price: 325 euro per organisation which includes lunch.
Location: Davy House, 49 Dawson Street Dublin 2.
Time: 9:30am to 4:15pm
Main topics will include:
- Roles and expectations of Chairs and trustees
- Ensuring trustees fulfil their governance role
- Refreshing the Board and finding new trustees
- Case study of where things went wrong
- Developing a learning organisation
CEO and Chair Training Timetable
9.30am Registration and coffee
Roles and expectations of chairs and trustees
- the chair’s leadership role
- what the chair cannot do – limitations on the chair’s role
- respecting the collective authority and responsibility of trustees
Ensuring trustees fulfil their governance role:
- trustees’ role and the chair’s relationship with trustees
- the three key strands of governance: corporate/ fiduciary; strategic and impact
11.30am Coffee break
11.45am Refreshing the board and finding new trustees
- providing support to and ensuring new trustees become effective as quickly as possible
- ensuring trustees address the right issues: why it is important to get the right agendas
- making informed decisions: ensuring the board gets the information it needs for good governance
- chair/CEO relationship including: ensuring trustees can hold the chief executive to account without meddling in management
2.00pm Case study of where things went wrong – tackling difficult/sensitive situations and learning from others’ mistakes.
Delegates split into groups to decide how best to lead the charity in the case study out of its difficulties
3.15pm Tea and coffee
3.30pm Developing a learning organisation – why reviewing performance is important even at board level:
- appraising the chief executive’s performance
- reflecting on the chair’s performance
- the board collectively reflecting on its performance
An annual global trust survey has found that Ireland has more trust in the NGO sector than in Government.
The 2014 Edelman Trust Barometer found that 13% of Irish people surveyed had a ‘great deal of trust’ in the NGO sector, in comparison to only 4% for Government. In 2013, the level of trust in the NGO sector was slight higher At 17%, whilst the level of trust in Government stayed at 4%.
The numbers are mirrored at a global scale with 23% of respondents stating that they had a ’great deal of trust’ in the NGO sector in contrast to Government at 15%.
Amongst other findings, the report also shows that 54% of Irish people trust NGO representatives as credible spokespeople.
Now in its 14th year, the Edelman Trust Barometer measures levels of trust on a global scale across institutions, industries and leaders. The survey is the result of over 31,000 respondents in 26 markets globally.
The Rehab Group has announced the appointment of a new board as part of a significant Governance restructuring project. The 16 member board was announced at the Rehab Group Annual General Meeting which took place on the 8th of September. Thirteen of the sixteen board members are newly appointed.
The well-publicised recruitment process was overseen by a transitional board nominations committee, drawn from the Rehab Group board and key charity sector figures.
As part of its Governance restructuring plan, the Rehab Group has also committed to adopting the Fundraising Code of Practice for Charities and the Governance Code for Community and Voluntary Organisations.
Speaking about the board renewal, Chairman and acting CEO of the Rehab Group Seán Egan said that he was “extremely pleased that the process of appointment of a new board has attracted individuals of such high calibre, all of whom are enthusiastically committed to supporting Rehab. The new board has the right mix of skills relevant experience, skills and empathy – and this will benefit the organisation hugely.”
Click here to see the new board.
The payment of voluntary director expenses is an area of uncertainty for many charities. Whilst the role is without remuneration, voluntary directors are still entitled to have their expenses met when carrying out their duties for the charity.
Two important things to note:
- Reimbursing voluntary directors for costs incurred in the course of their work for the charity does not equate to remuneration, which in principle is prohibited except in a select number of cases.
- It is good practice for a charity to have an expenses policy in place to help demarcate the limits of voluntary director expenses.
Irish Company Law entitles voluntary directors to be reimbursed for reasonable expenses when working on behalf of the charity. Travel is the most common form of expense incurred by a board member in the course of their duties for the charity – e.g. travelling to and from board meetings. It is important to note that the expenses should be reasonable, and the finer details surrounding payment of expenses should be contained in your expenses policy.
Revenue has recently published a short updated brief on the tax treatment of travel expenses for voluntary directors which explains that as a general rule, travel expenses are not subject to a tax deduction. In the case that travel expenses are covered by the company or reimbursed to the Director, PAYE/USC must be deducted.
Payment for Goods and Services
The law does allow for voluntary directors to be paid for goods and services which go beyond their normal duties as directors. This could include legal or accountancy work which is carried out by the voluntary director outside of his or her role on the board. This type of payment is subject to a number of conditions which are outlined in Section 89 of the Charities Act 2009:
- The agreement must be in writing
- The sums payable under the agreement must not exceed what is reasonable and proportionate having regard to the service provided.
- All of the voluntary directors must agree that it is in the best interests of the charity.
- If there is only one voluntary director, the approval of the Charities Regulatory Authority must be obtained.
- No such payment should contravene the charity’s governing document.
- The charity must have regard to any guidelines issued by the Charities Regulatory Authority on the issue.
It is also best practise for the charity to go to market with the proposed work to demonstrate that they are obtaining best value and best service.
This explanatory note is not designed to be a comprehensive overview of voluntary director expenses, but rather a good starting point for further exploration.
Click here to view the Revenue Commissioners brief on the tax treatment of travel expenses.
O’Connell Brennan Solicitors “Trustee Expenses and Payments in the Non-Profit Sector.”
Revenue Commissioners “Expenses of travel – Non-executive directors attending board meetings.”
We have a limited number of places left for our Board Member Training day on the 25th of September 2014.
This training day provides a comprehensive overview of the role and responsibilities of not-for-profit board members and is tailored towards prospective, new and existing board members looking to strengthen their role on the Board.
Cost: 120 Euro p/p
Location: Davys Dublin 2
Time: 9.30am to 4pm
The full-day training is led by Boardmatch Business Development Manager Fidelma Keogh.
Fidelma is Business Development Manager with Boardmatch Ireland and has worked in the non-profit sector for 15 years, across a variety of fields including social housing, health and governance. She has an honours Masters in Governance from the IPA and a First Class in Management for the Community & Voluntary Sector (NCI).
Main topics will include:
- Role, expectations and liabilities of voluntary Directors
- Governance and management
- Information needed by voluntary Directors
- Board recruitment & stakeholder management
- Relationships with your Chief Executive and Chair
For further information, or to book a place, please contact Eva Gurn at firstname.lastname@example.org or call the office on 01-671 5005.