Alastair Keatinge, charity law partner at Lindsays, offers advice to charity executives and trustees who feel an individual is becoming too influential and is threatening their charities’ activities, or even existence

Charities have always relied upon charismatic and energetic people. People who care about a cause, and have the connections and persuasive powers to make others care about it too.

But, as the third sector has been reminded in recent months, there is a thin line between charisma and excessive influence. The first is useful. The second can be problematic, as charity regulators have recently warned. The worst-case consequence can be the failure of the charity.

Kids Company is a recent example of the risk of having a dominant individual, but the issue is far from new. It was raised back in 2007, in the Office of the Scottish Charity Regulator’s (OSCR) enquiry into the failure of One Plus: One Parent Families. Its report mentions the directors’ dependence on the previous chief executive, and the board seeming unable or unwilling to hold that chief executive to account.

The risks

The problems arising from one person having excessive influence can vary in severity.

There is a thin line between charisma and excessive influence. The first is useful. The second can be problematic.

Alastair Keatinge

In England and Wales the Charity Commission has warned of other trustees disengaging, failing to contribute or failing to challenge decisions. This in turn, it said, could lead to unmanaged conflicts of interest, unauthorised personal benefit, or trustees failing to perform their legal duties.

Other typical problems could include:

• One person shouldering too much responsibility and therefore not having time to horizon-scan or improve the running of the organisation.
• The charity becoming stuck in a rut because the dominant person always greets fresh ideas with ‘Oh no, we do it this way …’
• The charity failing to consider strategies such as mergers or collaborations because a key person does not want to cede influence.

Not all these scenarios will threaten the existence of the charity, but they could reduce the service delivered to users or impact fundraising or volunteer recruitment. They may also lead to opportunities or risks being missed.

The people

In the case of Kids Company and One Plus, it was the chief executive who was the dominant individual. However, it could be another senior staff member, the chairperson, or a trustee.

The situation may arise because the individual was a founder or has a longstanding involvement. This may make it harder for trustees to intervene, but no less important that they do so.

The remedies

The best way to deal with an individual having excessive influence is to stop it happening in the first place. Measures include:

• Ensuring there is a good balance of power between chair and chief executive; they need to work well together but be prepared to challenge each other
• Introducing maximum terms for trustees
• Implementing diversity/equality policies for trustees, to reduce the possibility of ‘group-think’ or an overly-compliant board
• Monitoring the attendance and contribution of trustees.

Above all, the boards that are best positioned to prevent excessive influence have two qualities. First, their mix of skills and experience enable them to understand fully the charity’s management, context, risks and opportunities. Secondly, they have adequate training in governance – not merely on their legal responsibilities, but on all aspects of ensuring the charity is sustainable.

And what if you’re already concerned about a dominant individual in a charity you’re involved with? Options include whistle-blowing or resignation, but less draconian initial steps would be to talk to other trustees; and take professional advice on the possible remedies.

With the right advice and a good collective will, it should be possible to resolve the situation.

Alastair Keatinge is charity law partner at law firm Lindsays.