Tuesday, January 28, 2014

Charity chiefs support regulator

“Poor to average” is how the vast majority of charity chiefs rate governance of the sector, while two thirds believe organisations in receipt of state funding are neither adequately monitored nor held to account for how money is spent.

A survey of board members and CEOs in the charity and not-for-profit sector found widespread dissatisfaction with the general lack of oversight, particularly in the absence of a charities regulator.

The research, carried out by the Institute of Directors, found that 83% favoured the introduction of a mandatory code of governance, while four in five want to see a more formal and transparent process of appointment to the boards of charities.

The findings are hardly surprising against a backdrop of ongoing negative revelations in relation to the charity sector, specifically the use of donations to pay top-ups to executives.

Of those surveyed by the Institute for its report, entitled Governance in the Charity and& Not-For-Profit Sector in Ireland, 56% believe the establishment of the Charities Regulatory Authority and the appointment of a charities regulator — expected in February — will help restore public confidence in the sector.

Directors also cited that the public disclosure of accounts, board training, and greater transparency in appointments as ways to improve governance. The majority also support more frequent rotation of board members and a greater focus on ethics and integrity.

A “key finding” was that eight in 10 board members surveyed favour the use of external benchmarking to set CEO salary levels but disappointingly, just two in five favour publishing CEO’s salaries as a means of improving governance.

Fewer than a third already claim to use external benchmarking.

Maura Quinn, CEO of the institute, said it was vital that swift action was taken to rebuild confidence in the sector and also to ensure organisations operating in-line with best practice are not unduly impacted “by the governance failings that have beleaguered the sector in recent weeks”.

She said ethics and integrity “should be at the core of boardroom behaviour” and board members “should not lose sight of the fact that their duty, first and foremost, is to serve the interests of the organisation”.

Survey respondents were asked if board members had the appropriate training and knowledge to carry out their duties. A third felt this was not the case, which Ms Dunne said was worrying.

Rehab advice
The board of the Rehab Group is taking legal advice on the comments by Justice Minister Alan Shatter about the low profit margins on its lotteries.

A special board meeting will take place on Feb 17. In the interim, the board has commissioned a number of independent reports on the demands for the pay of chief executive Angela Kerins and senior staff to be released.

The reports will look at benchmarking salaries with comparable organisations, how senior salaries might be released, and the Data Protection obligations to staff.

Rehab said Feb 17 was chosen so that all directors and advisors could be present. It also wants time to secure professional advice.

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