Charity board members seek greater regulation

Board members of charities and not-for-profit groups want greater oversight and accountability in the sector, new research has found.

The Institute of Directors in Ireland survey of 229 board members and chief executives involved in the sector found that 64 per cent believed organisations in receipt of State funding were not adequately monitored or held to account for the spending of those funds.

Three-quarters of those surveyed said governance levels in the sector were average or poor, while four out of five said there should be a more formal and transparent process of appointment to boards.

Some 34 per cent said they did not believe that their fellow board members had adequate knowledge and training to perform their duties effectively, which was described as “a cause for concern” by the Institute of Directors.

Some 83 per cent of those surveyed said a mandatory code of governance for charities and not-for-profit organisations should be introduced.

The research for the report, Governance in the Charity and Not-For-Profit Sector in Ireland, was carried out in the wake of controversies over pay and bonuses.

Salary benchmarking
Some 80 per cent of board members surveyed said external benchmarking should be used to determine the appropriate salary levels for chief executives in the sector.

Institute of Directors' chief executive Maura Quinn said the research highlighted the need to improve governance levels for not-for-profit groups.

The findings were “all the more powerful, given that it is the not-for-profit board members themselves who are calling for greater oversight and transparency in the sector”, she said.

“It is vital that swift action is taken to address the issues in the sector, such as appointing the Charities Regulator, to not only rebuild confidence but also to ensure that the countless organisations operating effectively and in line with best practice are not unduly impacted by the governance failings that have beleaguered the sector in recent weeks,” she said.

Ms Quinn said oversight was only one part of the solution.

'Ethics and integrity'
"The behaviour of board members is also a key factor. Ethics and integrity should be at the core of boardroom behaviour and decision-making, and board members should not lose sight of the fact that their duty, first and foremost, is to serve the interests of the organisation."

Dóchas, the umbrella body of Irish aid agencies, said it had been calling for greater transparency, accountability and regulation for more than 10 years.

Its director, Hans Zomer, said that charities should be "completely transparent about all aspects of their finances, including the salaries of their CEO".´

The Wheel, a network of 930 charities, also called for a mandatory code of governance for all charities.

It said 346 charities had already voluntarily signed up to a governance code.

More than half of those surveyed said that the establishment of the Charities Regulatory Authority and the appointment of a Charities Regulator, expected next month, would help to restore public confidence in charities and not-for-profit organisations.