Not this – game changing things(Swap one of these for kindle image)
Or only available ‘creative types’
But a new idea that works- requires experimentation; openness to new ideas, trust and freedom amongst other things
One interviewee’s definition of innovationExplain research project brieflyToday I am presenting my early findings and a model for encouraging innovation for your consideration
Some External drivers of innovationImages of cuts; world changing events; changes in demographic; political environment – things that drive innovation- external driversGive examples of some of these and what organisations do to address e.g. Cuts and using volunteers as advisors GHTSo Trustees can be aware of them
Some Internal drivers of innovation- Vision; strategy; passion; bottom up, and wanting to make your marke.g. LUU vision – Love your time at Leeds – finding new ways to engage unengagedTrustees can influence theseBefore we look at how, let’s see who is in the roomHow?
Give them 5 minutes to discussStop them and prepare them for answering question
Board Culture – mutual respect; trust; humour; openness to ideas; time for ideas; learning; debate and time for debate through subcommitteesPartnership with CEO; relationship with CEO-Chair crucial; right CEO for job; expecting CEO to be well prepared; 1;1s; mutual respect and trustDiversity as stimulus for good debate; turnover- making markInvolvement – as in level of – strategic thinking; as in being knowledgeable enough; rolling up sleeves when necessary;
Board Culture – mutual respect; trust; humour; openness to ideas; time for ideas; learning; debate and time for debate through subcommittees
Partnership with CEO; relationship with CEO-Chair crucial; right CEO for job; expecting CEO to be well prepared; 1;1s; mutual respect and trust; flat structureGive examples of change in environment necessitating change in CEO or how CEO can refresh organisation; keep turnover; having responsibility to develop staff so that they move on
...otherwise you are talking out of your backsides!‘Involvement – as in level of – strategic thinking; as in being knowledgeable enough; rolling up sleeves when necessary;
Diversity as stimulus for good debate; turnover- making mark
Emphasise importance of diversity- stimulating new ideas and bringing new perspectives, enhancing debate making mark
Insert picture of foundationsTrustees’ role centres around scrutinising, strengthening and stimulating ideas but none of this can be done if they are not diverse, the culture is not right and there is no trust respect and openness and the right relationship wiht the CEO
Quotes form CEOsWelcoming; needing; provoking; requiring challenge to build ideas, interrogate ideasBeing concerned if not enough dissent – too much consensusE.G of provoling challenge and debate- making time for itNeeding trust and respect for challenge
Quality debate- listening, involving everyone, use of subcommittees, keeping focussed on vision
Poor debate/ challenge- hobby horses; dart board and agenda is dart board; FearConflictPuppets – in control of CEOFailing to challenge- just being nodding dogs
But you will notice all these things are pretty much what you should be doing anyway under Code of Governance- what I hope I have done is show you why they are important and what can result from attending to them
To conclude with a sentiment ffrm one CEO that sums things up for current state of sector.So get the culture and structures right so that you can try things out, debate and challenge well so you try the right things out and then let the executive get on with it
As trustees you have a heavy responsibility. Trustees are charged with the overall strategic direction of your organisation. Very often this is interpreted as preserving the status quo. But in a fast changing world you need to think outside the box and be prepared to trade some of your cherished autonomy for a more sustainable future. Drivers:Internal; organisational challenges e.g.retirement of CEO or founder chair External; changes in the environment e.g. funding.Sectoral; drive for greater efficiency, cost savings, cross cutting service delivery etcCity of Wells AlmshousesTerence Higgins Trust
These are the some of the decision steps you need to take where your role as trustees is critical. You can’t afford to get it wrong because merger is (almost) irrevocable. It’s true that decisions to merge often follow a period of collaboration, but even if you or your CEO is best friends with a partner charity , you still should look outside the box. Locality was a merger of Bassac and Development Trusts Association that followed a period of successful collaboration over several years.Over the next couple of slides we’ll work through an actual example of how one charity found a merger partner. My friends at the Centre for Charity Effectiveness at Cass Business School have workedThe first approach is critical, and it may be that this is best undertaken by the Chair. And sometimes there is quite a long period before this first discussion between Chairs leads to merger negotiations.IVAR = Institute for Voluntary Action Research has done a great deal of work on charity mergers and notes that the decision to go ahead with merger is a combination of reasons and often a gut instinct. Don’t be afraid of this.
Next couple of slides will walk through a real example where consultants from our friends at the Centre for Charity Effectiveness helped 2 charities to merge.2010 trustees of Kids VIP (helping children visiting parents in prison) realised that they had reached a crossroads. Financially stable but organisational issues and turnover of staff. Merger therefore a strategic option, not a forced measure.Consultants helped them undertake an analysis of the other players in the area….After due consideration they decided that the they needed to look for a) charities in the prison sector and/or b) childrens charities. From this they selected a short list of charities to approach
Having selected the areas of activity, they then decided which criteria were essential – as above. 3 charities were selected as a short list. In fact the essential role of the consultants were shown here. Kids VIP had thought their eventual partner – PACT (Prison Advice and Care Trust) and initially had thought it was a local organisation and thus outwith their critieria. Consultants helped the trustees craft their approach. Consultants also helped both organisations get over what seemed a break point; a difference in accounting treatment of certain financial reserves. Merger proceeded swiftly.Key success factors: clarity of purpose by Kids VIP trustees; careful preparation before approach made; finding a good match resulted in a speedy merger; good communication between trustees and staff of each organisation
In any business negotiation decisions need to be taken in a timely manner in order to maintain momentum. In merger talks we know that a sense of momentum is critical. But trustee meetings are often scheduled on a quarterly basis. The taskforce will normally comprise the CEO, at least one senior manager and one or two trustees from each organisation. You need to find time to this process.The last point – a clear process is important, but all the evidence shows the importance of leadership in getting the deal done. If you’re not on the merger taskforce, don’t meddle.Also, the time you might need to give may vary according to the size of your organisation; often smaller charitiies need more input from their trustees than larger ones..Terence Higgins Trust
What can go wrong? There is a great deal of information available from CC website, also NCVO, easily understandable. E.g. a good list of due diligence questions for trustees considering merger.Mergers are potentially expensive; outside the range of many smaller charities. Don’t use the professionals until you need to. Ask your funders if they will give you a grant to pay merger costs. If an approach to merge from another charity looks too good to be true, it probably is! Treat with care.Sometimes (unlike in private sector) mergers are non contentious and you might mutually agree to use one form of lawyers to draw up the merger agreement and other legal documents. Look out for as much pro bon support as you can find through your networks.Two key points are the last two. One organisation we know managed to achieve a merger only after the partner organisation had failed and gone into adminiistration, thus reducing their liabilities in terms of that organisation’s pension fund (the issue that had led it to financial collapse).
As we have already discussed mergers are very stressful occasions, with alternating highs and lows. Charities are sometimes guilty of pretending that an acquisition is in fact a merger of equals (so is the private sector)! Staff are not fools; be as honest and open as you can.Charities have a more complex set of stakeholders than private sector companies – staff, funders, beneficiaries, to name but a few.Support your CEO. The most common finding is that CEO’s feel isolated, stressed and overworked during a merger and having to learn a whole new set of skills. They do not need their trustees to double guess decisions,. Trustees can help by supporting their CEO, perhaps finding a mentor.One CEO has to go, and they know this.
But is culture a shorthand for other conflicts? These conflicts can include fear of the unknown, fear of loss of position, dislike of change. The sector has a culture of the myth of uniqueness, but remember you need to understand what the expressed problems are and We know of one charity (Tact case study) that merged with 4 smaller organisations; each of the 4 appointed 2 trustees to the new board and this was very successful in achieving the needed buy in. But it meant that initially there was a disparity between the skills sets and the skills requirements. And, the trustees who came from the smaller charity needed time to adjust to a much reduced operational role.Acknowledge the change.Externa lconsultancy support
It can often take years, but there are examples of very successful charity mergers. NSPCC/Childline case studyTerence Higgins Trust.
NCVO TrusteeConference 2012in association with BWB#Tconf12 Good Governance and Leadership
WelcomeMartyn Lewis CBEChair, NCVO Welcome Twitter: #Tconf12 #Tconf12
Sponsor‟s AddressPeter Knapton WelcomeDirector of CharitiesM&G Investments #Tconf12
Engage and Seek Advice1. Cross Party Support2. Charity and 3rd Sector Advice/support3. Stakeholder bodies – BWAF/IWA* involved – boaters ramblers, fishers etc4. Professional Advice – finance, legal, charity5. Charity Commission6. Employees and reps ( jobs , terms) *(Chair attended Board meetings as observer)
SMASH AND GRAB – Autumn 2009Independently verified recordAn exciting vision for government andpeople200 Riparian MP’s (stakeholder lobby)Senior Government backbenchersDEFRA AND Treasury MinistersLabour Manifesto
Council TRUSTEES Waterway PartnershipsAdvisory Groups Management
CouncilInitially 7 elected – Boating Community Employees13 selected – Regional Chairs12 appointed – Stakeholder Associations e.g. AnglersPlus 3 selected to add diversityPlus up to 15 for new navigations e.g. EnvironmentAgency
Contract1. Initial offer - £390m – 10 years2. Agreed objectives for system3. Recognition of this CSR period4. Final agreement - £800m – 15 years with reasonable inflation cover and £125m last resort pension underpin
Contract Safeguards1. Waterway infrastructure – cannot dispose without Secretary of State approval2. Property dowry – maintain capital and invest in line with agreed strategy • Joint appointed PROTECTOR3. Must maintain Major Assets “ “ Towpath Access “ “ Flood Assets
Other1. Research and agree name and branding2. Negotiate a separation of assets with Scotland – 3 Wise Men!3. Negotiate with Pension Fund Trustees including Property Partnership (Scottish Law) and ultimate Government Guarantee.4. Recruit a Patron – HRH the Prince of Wales5. Merge the Waterways Trust - museums
Legislation1. Public Bodies Bill – December 2011 (Henry VIII)2. All Parliamentary Waterways Group and Minister published Order on 29th February 20123. Westminster Scrutiny • EFRA Select Committee • Lords • All Parliamentary Waterways Group4. Scottish Parliament and Welsh Assembly approval5. Westminster approves without division 26th June 20126. Order signed July 1st 20127. Canal and River Trust and Scottish Canals assume British Waterways responsibility July 2nd.
Canal & River Trust• 2,000 miles of canal and rivers• 72 reservoirs• 4 ports• 3,112 bridges• 650 embankments• 2,727 heritage structures• 65 Special Scientific Interest sites and• 35,000 boats• 11 million visitors• 38,862 volunteer days
The Future1. Waterways are at the heart of what we do.2. Navigation and towpath access is essential.3. Successful social enterprise – entrepreneurial and efficient.4. Attract new resources – volunteers and income.5. Utilise waterways to engage and involve communities and stakeholders to REAL OWNERSHIP.
The Future1. Environment sites and corridors2. Heritage – sense of place3. Education – schools to skills4. Restorative Justice5. Health – walking to white water6. Economic stimulus7. Arts – galleries to lock gates
The Past• Historical Heroes• Low numbers• Low skill (litter)• Employee resistance (job threats)• Health and safety barriers• Management effort!
Action• Leadership• Structure – policy and procedures• Low hanging fruit – confidence• Licenced groups (Health and Safety)• Invested in volunteer leaders – 27• Measure – ThankQ – Board KPI• Celebrate Success• Recognition and Reward• Brian Blessed!
Virtuous Circle Better WaterwaysVoluntary Wider Usesupport New Community Engagement
Tony Hales CBEChairCanal and River Trust Welcome #Tconf12
AM1: Innovation – whatshould you be doingabout it? Katherine William-Powlett
A new idea that works• ‘To us innovation means coming up with new ways of doing things which are infinitely more interesting, engaging, encompassing, flexible: right now everybody has got to be as flexible as they can’• ‘To be an innovative organisation, everyone within it has to be part of the process’
I am happy to take part and I am1. Trustee 33% 33% 33%2. CEO3. Other O e er te CE h us Ot Tr
Innovation is important to my organisation 50% 50%Innovation is1. Important2. Not important t nt n ta rta r po po Im im t No Innovation
What drives innovation in yourorganisation?Do you think your organisationis innovative? your neighbour Discuss with
My organisation is innovative 50% 50%1. Innovative2. Not innovative ive ive t t va va no no In in t No
Set the SceneStimulate Stretch & Strengthen Ideas Step Back
Set the scene Board Partnership Diversity/Culture with CEO Involvement Turnover
Board Culture• Our board is very respectful of contributions: if it wasn’t it just wouldn’t get out of the blocks’• ‘We have free space on an agenda to think creatively about ideas’• ‘It bounces backwards and forwards. So we might start something at the board and say let’s push something to a subcommittee for a bit more then it comes back with renewed confidence or may be a few new ideas added onto it’
We set time aside on our agenda for new ideas 50% 50%1. Time set aside2. No time allotted e . t.. sid ot a all et es e t im m Ti No
My organisation is innovative? 50% Innovative 50% 50%Not innovat... 50% Time set aside No time allotted
Partnership with CEO• ‘If we are taking a lead from the CEO then that’s a dangerous position to be in’• ‘It is a disaster when the Chair and CEO don’t get on : a disaster’• ‘I think it is about taking hierarchy out of it and saying we are not two levels of people- we are all people who care – we just do very different roles’• ‘It is very much a question of having faith in the staff’• ‘If we want to encourage debate, conversations, dialogue resulting in innovation, we have to have well prepared papers in order to facilitate that’
Involvement• ‘You cannot make strategic decisions without understanding what the organisation is about...’• ‘You have to have innovation in a context so you do need to have clarity of vision’• ‘If we have a vision we can all coalesce around and we know who we are and what our values are then we can innovate’• ‘Sometimes you roll up your sleeves for the thing that you can offer and bringing your whole person into the board’
Diversity and Turnover• ‘Diversity is what makes us as an organisation fantastic and at board level it is great’• ‘Things are hard to change when you have a cadre of the old guard’• ‘All you need to do is throw someone different into that mix and then you start your debates’• ‘Good decisions are made by taking a bit from everybody’s expertise, experience or knowledge.’
The crucial role played by diversityHow diverse is your board?
Our board is diverse inbackground, experience, skills and personalities50% 50%1. Diverse2. Not diverse se se r r ve ve Di di t No
My organisation is innovative 50% Innovative 50% 50%Not innovat... 50% Diverse Not diverse
Set the SceneStimulate Stretch & Strengthen Ideas Step Back
Stimulate External Bottom up Visionenvironment
Stimulate• ‘They bring really good info to the table sometimes: they are a little bit like invisible antennae’• ‘We are starting to become a user led organisation and that means letting go of a lot of power and really listening to and engaging with people’• ‘How much better does it get in terms of an organisation setting their vision- your members want to get their picture taken under it!’
Stretch through Challenge‘The innovation comes from the stretch and them pushing for the stretch and saying, we want something different now, or we want something more’‘If she lets me off the hook on things I worry’ ‘It is almost like turkeys asking for Christmas isn’t it, for me to be saying I want more challenge and more dissent but actually I think it would be healthier... as long as I can control it!!’
Strengthen through debate• ‘We want to generate more disagreement and more conflict on the board to get a better spread of opinions’• ‘A board, in order to promote an environment of innovation, need to go into a room knowing that they are going to do more listening that talking’
As a board we debate well 50% 50%1. Debate-good2. Debate-poor r d o o po go e- e- t t ba ba De De
My organisation is innovative 50% Innovative 50% 50%Not innovat... 50% Debate-good Debate-poor
Set the SceneStimulate Stretch & Strengthen Ideas Step Back
Stepping back• ‘I think also one should not underestimate the kind of tacit support from the board that just let us get on with it’• ‘There is a world of difference between looking at risk assessing it and deciding whether you are comfortable with that degree of risk or not, and just being plain crazy’• ‘Don’t get in the way too much! You need to allow things to flourish and yet not be to far away’
We are risk averse1. Risk averse 50% 50%2. Risk accepting e g rs t in ve ep a cc sk a Ri sk Ri
My organisation is innovative 50% e iv 50% at v no In 50% ... at 50% ov nn tiNo Risk averse Risk accepting
What can trustees do to encourage innovation? Set the Stimulate, Stretch Step scene & Strengthen ideas Back Develop Under- Look for Be Engage Ensure ideas passion- inAttend strong Be stand Provide Support involved diversity from ate intellig- Accept Hold to to partner- & external informed with risk Trust accountculture ship with enough environ- bottom about challenge ent skills CEO turnover ment up vision debate
‘We are faced with tough sets ofcircumstances with no obvioussolution and the only way we canmove forward is by trying thingsout’
AM2: The strategicimportance of remainingtrue to your values Donald Ritchie, Senior Consultant NCVO
In today’s workshop• What do we mean by ‘values’?• The value of living our values• 3 ways that values really work for organisations• What role can Trustees play?
About values• Values are probably the highest level strategic decision that an organisation takes• Done well … they can define who you are, what you do and why you do it – The beginning: what inspires you – your reason to exist – The means: what you do and how you do it – The end: what you seek to achieve – your ultimate impact• Values are there for the very long term – the language that expresses them may change, but rarely the meaning
About valuesValues are typically expressed in two main ways:• Your beliefs about the world, in relation to your field of work – both what’s wrong with it and what it should be like• The principles that drive your work – about what you do, and perhaps more importantly, about how you do it
Benefits of clear valuesOrganisations that have genuine shared values achieve more• Leadership, strategy and action are more closely aligned• Working relationships are more productive• People understand when to act on their own or with othersResearch finding: companies with strong cultures that arefounded on shared values outperformed their competitors: - Revenue grew four times faster - Jobs were created seven times faster - Share prices grew twelve times faster - Profits were 750% higher - JP Kotter & LJ Heskett, Corporate Culture and Performance, 1992
Values in today’s contextValues-driven organisations stand a better chance of thrivingin these straitened times, by being better placed to:• Maximise their impact• Maximise their income• Minimise the risk of drifting off mission
How good are your values?Seeing is believing … key challenges are:• Understanding what values mean, a communication issue• Seeing values enacted in day-to-day activitiesEmpowerment is at the heart of the way that we work. In allthings we:• act with integrity• embrace democracy• aspire to excellence and• promote equality
Our vision, values and goals We believe in people It all starts with one simple fact: all human lives are of equal value and full of potential. Experience tells us with the right support and training, people can work their own way out of poverty. Easy guide to Oxfam The impact of our work We work better together Collaboration is at the heart of everything we do. Oxfam partners with organisations who have unique local expertise, connections and experience. Doing so not only saves us time and money, but also helps foster trust and respect in the communities we support. And through working together, infrastructures are established that will keep doing good work when the communities we work with are ready to go it alone. About our partners We say it like it is There are some people who never know when to keep quiet. Fortunately, quite a lot of them campaign with Oxfam! Whenever an issue is blatantly unfair, or secretly shoved under the carpet, we can rely on thousands of people who come together to demand - and get - results. Campaign with us Join the GROW movement
Living your valuesAn exercise in pairs:Choose one of your organisation’s values, and think about:• An example of how that value is embodied in the work of your organisation• What an outsider would make of your organisation without being told that valueShare your thoughts with your partnerYou’ve got a couple of minutes each …
Three ways that values can really work for your organisation
1. Stand out from the crowdValues define who you are, what makes you tick• That’s your beliefs and how you approach your work• These set out what’s different, special and maybe unique about your organisation• Then people outside your organisation can understand you – for example funders and people you want to influence• Clear and meaningful values should get an ‘aha’ response, … and not a ‘so what?’ How well does your organisation communicate its values?
2. Act together as oneValues are at the heart of peak performing organisations• Everyone understands your values and what they mean – that’s staff, Trustees, volunteers, etc• People also share the values, quite likely that’s why they’ve chosen to be involved in the organisation• The organisation lives and breathes its values – they drive decisions and activities, and are visible throughout its work If 10 people in your organisation were asked to talk about its values, what would they say?
2. Act together as oneSome quotes from a recent survey of UK charities:Keep it genuine – values are not a marketing gimmickDo not think of them as just a list to publish – embed them ineverything you do from meeting agendas to policy templatesLive them or lose themPut ‘have we lived up to our values this month’ on the agenda
3. Reach out to othersClear and meaningful values are a like a magnet• Where your organisation’s values are aligned with people’s personal values, those people are likely to engage with you – so values can build your financial support and activism• Values are central to effective partnerships, alliances and movements• Meeting people where they’re at is key to success, this is not a one-way exchange How do values feature in your organisation’s outreach?
Avoid meddling with valuesIf your organisation doesn’t have a set of values, or if they’renot clear or meaningful enough, then beware …• Values are deep-seated and personal• In organisations where there aren’t shared values, people often assume their own values are at its heart• Perceived changes to values are essentially changes to the organisational culture Don’t jump in – a robust and inclusive approach is advisable, in order that any new values actually stick
Good GovernanceValues run through the Code, for example Boards:• Safeguard the vision and values of the organisation• Ensure that the organisation’s values and ethos are enshrined in its polices and practices• Ensure that any statement made on behalf of the organisation is consistent with its vision, mission and valuesMore broadly, Trustees are effectively values guardians: – You’re typically around longer, providing continuity – You can stand above the many external pressures to change – You act in the long-term interests of the organisation
Good governanceAnother exercise in your pairs:If the Board is the guardian of an organisation’s values, thenwhat should it do to fulfil that role?We’re looking for specific ideas and suggestions, and indeedany good practice you can shareDiscuss with your partner
Want to know more?Living Values – a pocket guide for trustees: http://www.ncvo-vol.org.uk/sites/default/files/UploadedFiles/NCVO/Publications/Publications_Catalogue/Trustee_and_Governance/Living_Values_pocket_guide_PDF.pdfTo practice what we preach – Cass research thought piece:http://www.cass.city.ac.uk/research-and-faculty/centres/cass-centre-for-charity-effectiveness/resources/thought-piecesCommon Cause – research and resources about public values:http://valuesandframes.org/
Thanks … and do stay in touch Donald Ritchie donald.ritchie @ncvo-vol.org.uk 020 7520 2508 http://www.ncvo-vol.org.uk/consultancy
AM3: Employmentlaw for trustees Vicky Cook BWB Associate
Overview Handling restructures and redundancies Handling appeals
Restructuring Will restructuring result in redundancy? No redundancy if restructure involves a redistribution of the same work amongst employees whose numbers remain the same
Restructuring cont … Depends on number of factors: reasons for restructuring (hours, pay, new role) flexibility of job description is it a change to the work or to how the work is performed?
Imposing changes to terms and conditionsas part of a reorganisation Consent Consultation Business necessity/sound good business reason Not necessary that business will come to a standstill
Dismissal in order to implement areorganisation Employer must demonstrate that it has discernible advantage Interest of employees cannot be ignored where there is a sound and good business reason for a dismissal Has employee acted reasonably in refusing the change? Reason for dismissal – SOSR? No redundancy pay Appeal
Redundancy Disappearing work Disappearing job or workplace Business requirements for work of a particular kind have ceased or diminished Can be temporary change
Avoiding redundancy Voluntary redundancy Job share Reduced hours Pay freeze Career breaks Secondments Talk to staff Be creative
Redundancy Process Individual consultation on draft proposal Confirmation of proposal At risk meeting Selection process Formal meeting to discuss redundancy and outcome Alternative employment Notice Appeal
Collective consultation 20 99 employees within 90 days = 30 days‟ consultation 100 + employees within 90 days = 90 days‟ consultation Consultation = with employee representativesN.B. notification to BIS
Selection Selection for redundancy, (not for alternative employment) Two main issues: selection pool selection criteria
Pool Is there an agreed procedure? Type of work similar? Interchangeable skills Apply mind, but good deal of flexibility Band of reasonable responses
Selection Criteria Consult on criteria Objective and consistent Commonly used criteria: last in/first out? skills and knowledge attendance disciplinary records Selecting out v. selecting in
Selection Process Individual or panel Interview or presentation Scores: individual has right to know scores details of scores should be provided before meeting to allow consideration and appeal
Alternative Employment Employer must take reasonable steps to find alternative employment for employees who may be otherwise dismissed by way of redundancy Selecting for alternatives is not the same as selection for redundancy
Suitable alternative employment Who determines suitability? Offer? What if refused? Trial period and pitfalls Offer of part time work
AppealsPurpose of AppealsEnsuring Fair process/natural justice Requirement of ACAS Code
What is an Appeal? Re-Hearing? Review? Not an opportunity to increase sanction!
What is an Appeal? cont …To: Clarify reason for dismissal Rectify previous procedural errors? New evidence? Is prior investigation required?
Who should attend? Chair of Appeal - more senior employee/ Trustee Panel? In person or in writing? Original decision-maker? Witnesses?
ACAS Guide on Appeals Applies to both grievance and disciplinary appeals Timescale – no unreasonable delay Employees should put grounds of appeal in writing Decided by manager not previously involved (wherever possible) Informed of outcome as soon as possible
Consequences of failure to follow appeal Unfair dismissal? Breach of contract Breach of ACAS Code/Uplift Statutory requirements i.e. flexible working
Appeals within the redundancy process What is the employee entitled to appeal? The business decision? The conduct of consultation? Choice of employees in the pool? The selection criteria/scoring? Failure to consider/offer SAE? Other unfair aspects of the process?
Appeals within the redundancy processcont … Timing of the appeal Is there a realistic possibility of the redundancy being overturned? Position of others at risk?
The appeal outcome Deal with each point Use headings Reason for conclusions State what new evidence considered (if any) Deal with any new grounds raised at the hearing (between new evidence and concessions) Make concessions if appropriate
The appeal outcome cont … Do end it appropriately Do not say employee can pursue this matter in the Employment Tribunal! Go ahead with the appeal (if requested) even if the employee has already lodged a Tribunal claim Think how the outcome letter would sound if read out in a Tribunal!
Valuation signals, 2000 versus 2012 Sample of assets, showing real yield against an assessment of neutrality 12 Undervalued? 2000 Current Neutrality 10 8 Real yield (%) 6 4 2 0 Overvalued? -2 Investment odds are in favour of equities160 Source: M&G Investment Management Ltd. Real yield is defined as an inverted p/e ratio, using forward consensus data. As at 1 October 2012
Market timing – best and worst times Nobody rings a bell at the top or bottom of the share price cycle UK equities – 20 years to end February 2012 10 9 8.3 8 7 6 4.9% pa 5 4 3 2.7 2 0.9 1 0 -1 -2 -0.8 -3 Fully invested throughout Missing 10 best days Missing 20 best days Missing 30 best days Missing 40 best days Market timing increases risk – a risk that can be avoided Prices may fluctuate and you may not get back your original investment Past performance is not a guide to future performance161 Source: Datastream and M&G, in sterling, income reinvested, as at 29 February 2012.
Taking a long-term view….. Contribution to total returns Breakdown of total US returns (real) for every 1 year and 5 year period since 1871 100 90 80 70 60 50 % 40 30 20 10 0 1 year time horizon 5 year time horizon Dividend yield Dividend growth Change in valuations …..but you don’t have to wait a lifetime162 Source: GMO, as at August 2010
Why dividend investing works Dividends and share prices go hand in hand – they are not mutually exclusive! Capital growth vs. total return: US returns over 10 years to December 2011 160 141 140 120 Return (%) 100 86 80 60 40 33 20 10 0 S&P500 Capital S&P500 Total Return Dividend Achievers Dividend Achievers Return Capital Return Total Return Consistent dividend payers deliver better share-price performance …and investors receive the income on top163 Source: Mergent‟s Dividend Achievers, as at 30 November 2011; Datastream as at 31 December 2011. US companies with a 25-year track record of consecutive dividend growth
Key messages • Investment objectives – be clear on what you seek to achieve, and review these regularly • Keep it simple – avoid investing in products that you don‟t understand • Inflation is the real enemy; think long term – don‟t obsess about benchmarks and short-term volatility! • Income & income growth remains key – for cash and total return • Equities are more attractively valued than bonds or property – patience is a virtue • Prices will fluctuate and you may not get back your original investment164
AM5: The challenges faced bychairs • Dorothy Dalton, Governance magazine editor • Steve Powell, Sign Health CEO
The role of the chair of trustees• To provide leadership to the board and to ensure that trustees fulfil their duties and responsibilities for the proper governance of the charity.• To support and where appropriate, to constructively challenge the chief executive and to ensure that the board as a whole works in partnership with executive staff.
Dorothy Dalton email@example.com 020 8426 6686 07777 660356 www.dorothydaltongovernance.comCartoons by Anthony Kelly www.anthonykelly.co.uk
a) TO GO OR NOT TO GO?The Chief Executive has been with the charity for over12 years. In the first 5 years the charity grew inincome and activity largely due to the energy, effortsand vision of the Chief Executive. In the next 5 yearsgrowth and activity tailed off and this was explainedas ‘consolidation’ and due to market pressures.Trustees had raised their concerns at the last StrategicReview and two years on things are not gettingbetter.There are now mumblings that a change in CEO isrequired.
a) TO GO OR NOT TO GO? Cont……1. The CEO has the strong support of the SMT and staff2. The CEO is the recognised ‘face’ of the charity3. The CEO has a close friendship with at least two of the Trustees, going on holiday together, and their children being close friends
b) BANGING HEADS TOGETHER The outgoing Chair of Trustees was a kind, democratic but uninspiring leader. The Board has split into two factions, one group thinking they should merge with another charity, the other group resistant to any new ideas. Each side has a forceful spokesperson. You have discussed this problem with the CEO who isn’t convinced merger is the right move, especially given the Board’s differing views which would make negotiation with any other charity impossible. The charity is financially sound, has a good staff team but is hampered in its well respected work by the squabbling within the Board. You have been appointed from the outside as Interim Chair to try and resolve matters.
b) BANGING HEADS TOGETHER Cont……1. Some Trustees have been on the Board for many years2. The auditors have questioned the high costs of the monthly Board meetings which involve travel and overnight expenses3. The squabbling has now come to the attention of a funder of the Charity who is likely to withdraw unless these difficulties can be resolved
c) KEEPING A FIRM GRIP ON THE BOARD •The charity is led by a strong and experienced CEO. The senior management team work well together and are delivering against the organisation’s strategic objectives. The charity is financially strong, respected and has excellent internal controls • •However, one or two members of the Board seem to find every opportunity to criticise the CEO or the team. Those Board members also have conflicts of interest, which they have declared, but it still doesn’t stop them finding fault whenever possible. When challenged they answer that the Board’s role is to scrutinize the Executive. The Chief Executive is looking to you for a resolution
c) KEEPING A FIRM GRIP ON THE BOARDcont …. 1. The two Board members causing these problems are elected from the membership 2. The vice-chair who is responsible for the Board’s Governance is weak and ineffectual 3. The CEO has hinted that unless something is done soon he will make a formal complaint or walk
d) TRUSTEE NON-ATTENDANCE • We have a trustee who last attended a board meeting in 2009. However, he always sends apologies for board meetings on the grounds that he is too busy and the distance to board meetings is a problem. He lives 300 miles away • He is a property expert who has saved our charity many hundreds of thousands of pounds with his negotiating skills and his property expertise. Property matters excite him and he travels long distances whenever we need his specialist skills and he then gives unstintingly of this time. He is invaluable to the charity • A couple of years ago, the chair spoke to him gently about attendance at board meetings and he almost resigned. He indicated that it is because he is a trustee, that he gives us so much of his time on property matters.
d) TRUSTEE NON-ATTENDANCE Cont……1. In the next year or two the Charity will have outgrown its office space2. The Charity is a national body with projects in Scotland and N. Ireland3. Board meetings start at 10.30 am and have always been in London
e) RESCUE OR TAKE-OVER• For various reasons this charity has built up a substantial overdraft at the bank, secured by a charge on one of its two buildings, both of which are essential to the service provision side of its work.• Recently (and the week the new chair took up the post) the bank refused an increase in the overdraft facility and the charity was on the brink of insolvency. Suddenly out of the blue, the parent of one of the service users (a very successful business woman) has offered the charity a massive interest free loan secured by taking a charge on the charity’s second building. In addition she insists that she and another successful businessman become trustees and between them run (as chair and vice chair) the finance committee which must be given significantly increased delegated authority. She says that the two of them will transform us into a viable and thriving charitable business. Because her son is a very contented resident in one of our homes, she naturally wants the charity to flourish. Our two buildings are our only assets• However the chair is very concerned that this is a take-over in all but name and that the board of trustees and the chief executive will, in effect, be totally disempowered. Trustees seem oblivious to the risks and are eager to find any solution to the financial problems. Many of their family members are service users
e) RESCUE OR TAKE-OVER Cont…… 1. The Memorandum and Articles of Association haven’t been updated for some years 2. The new Chair was appointed for his skills in ‘turn round’ and fundraising 3. The Charity has had some early stage talks with another similar but larger Charity
f) BREACHING CONFIDENTIALITY• The chair of trustees was recently appointed having been a trustee of the charity for five years. There has been a problem of confidential information leaking from the board. This has ranged from a senior member of staff being warned that action was to be taken by the chief executive (CE) with regard to her under-performance despite support and training, to a branch of the charity being informed that the cost- saving axe was about to fall quite heavily on it when the matter was still very confidential. Anecdotal evidence points to a particular trustee• The previous chair discussed the issue with trustees when the trustee concerned was not present and during a closed session of the board (i.e. without the chief executive and senior staff). As a result the former chair raised the matter with the trustee who denied the accusation vehemently and accused the CE of deliberately trying to get him off the board because he asks too many searching questions• Things went quiet for a while but there has just been another significant disclosure of confidential information about a very sensitive issue with potential reputational risk to the charity. The evidence points to the same trustee and the board expects the new chair to take firm decisive action to stop the leaks
f) BREACHING CONFIDENTIALITY cont… 1. A past suggestion from the CEO that the Board review its governance and the election process wasn’t well received. 2. The accused Trustee does have some friends on the Board 3. It is likely the accused will see themselves as a whistleblower, saying they were acting in the best interests of the charity.
g) MAIL ON SUNDAY DISCLOSING FRAUD• The Finance Director (FD) has been at the charity for many years and has worked very successfully with four different chairs of trustees. He is highly regarded and trusted implicitly by the board, the chief executive and the rest of the staff• A bright young graduate joins the finance team as its most junior member on a salary of just £15,000. She notices some unusual payments being made to a company and decides to make some discrete enquiries. She finds that the company secretary is the FD’s brother and that the two of them are the only shareholders. She finds ten payments totaling £100,000• Not knowing who in the charity she should take her findings to, she decides to take her story and the evidence to the Mail on Sunday. The first the chair hears of the matter is when the Director of Communications phones on the Thursday to say The Mail on Sunday wants a statement before they publish on Sunday about the hundreds of thousands of that have been defrauded.
g) MAIL ON SUNDAY DISCLOSING FRAUD cont… 1. The CEO is currently overseas on holiday 2. The auditors have always given the charity a clean bill of health although the same auditor has been used for sometime 3. The Chair wants to avoid reputational damage, at all cost.
h) TRUSTEE WHO TRYS TO OVERTURN BOARD DECISIONS • Kate is a good and loyal trustee who gives to the charity in a number of different ways. She has been a regular and very loyal volunteer who is always prepared to go the extra mile. As a trustee she also uses her professional expertise to assist the charity. She does all this while managing her own business and bringing up two teenage children. She is passionate about the work of the charity which did so much to help her much loved father • At board meetings she joins discussions with enthusiasm and is very articulate but has very fixed views. When a board decision goes against her, she will just not let the matter lie. At the following meeting she will raise the issue again when the minutes of the previous meeting are considered and will try to get to the board to reverse its decision. If this doesn’t succeed, she will bend any issue being discussed so that it goes back to the decision which she wants over-turned. She just won’t let go
h) TRUSTEE WHO TRYS TO OVERTURN DECISIONS cont…1. Kate has a very engaging personality and is generally liked by the Board2. She has good relationships with the CEO and SMT although her stubbornness does show, and she is inclined to bring board discussions into operational matters3. The Chair (male) doesn’t know how to handle a powerful personality such as Kate and so has been ineffective
AM6: Three in one charityupdate – CharityCommission, legal andpensions • Christine Rigby, BWB solicitor • Nick Mott, Charity Commission Head of Policy • Mark Brown, Lucas Fettes Director
Charity Commission Update 2012 Nick Mott Neal Green12 November 2012
Reviews and big ideas• Lord Hodgson‟s review• NAO report and PASC review• Law Commission Review• Promotion of alternative civil society forms and funding: – mutuals – social enterprise – social investment• Perceptions of the Commission - Tribunal decisions on public benefit (and others)
Charity sector – how big? Number of charities 13,000 162,000 180,000 Registered Exepted and Small ExemptBased on Charity Commission and NAO data, 2012
Charity sector – how much? Income of Charities (bn) £70.0 £60.0 £58.6 £50.0 £47.0 £40.0 £30.0 £20.0 £10.0 £0.4 £0.0 Registered Excepted and Small Exempt (known)Based on Charity Commission and NAO data, 2012
Some big issues• Pensions• Charities and education• Charities‟ relationships with government• Funding and fundraising• Independence
Our latest research – how istrustee recruitment?Amongst new organisations applying to register:• 34% wanted more trustees; 26% had difficulties recruiting• trustees most commonly recruited from – existing staff, volunteers, members – personal contacts – word of mouth• Over half try to recruit trustees from different backgrounds• Over 70% try to identify and meet skills needs when recruiting• 63% offer some training and support for trustees (20% said „comprehensive‟)
Our latest research – how isgovernance?New organisations applying to register:• Use a variety of sources of support and advice• Mostly do not benefit trustees (only 2% pay any trustees for serving)• Mostly (over half) felt that managed risk-taking is necessary• Mostly (95%) agreed that the trustees‟ role is about governing the organisation – 51% of respondents said trustees set vision and strategy, delegating delivery to others – 22% said their trustees also manage the organisation day to day – A further 22% said their trustees more or less do everything
New strategic plan• Developing compliance & accountability• Developing self-reliance• Being effective in the way we do things
Developing self-reliance• Self-reliance of trustees – Improving online guidance and information for trustees – Improving online services• Self-reliance of the sector – Working with umbrella bodies – e.g. shortly re-launching quality standards accreditation programme
Trustee decision making• Planned guidance• To help trustees make sound decisions• To give them confidence about doing so• Reinforcing that you don‟t always need to ask the Commission• Explaining the legal principles• Informal consultation later this year
Developing accountability• Ensuring charities file documents online and on time• Improving online register, e.g. new advanced search functions, new top ten lists, new mobile version of the website.• Asking the sector and public – what information about charities to do you expect from regulator?
Accounts filing: latest figures• 86% charities filed accounts on time in 2011-12• 83% charities filed annual returns on time• 4683 charities filed accounts* more than 30 days late * charities with incomes < £25 k not required to file accounts
Late filing: the warning signs• Late filers tend to be repeat offenders• Not just small charities• No evidence that late filing is caused by financial problems• Correlation between poor quality accounts and late filing• More than 1/3 of defaulters had prepared and signed accounts within deadline• 39% of late filers filed on time with Companies House
Developing complianceEnsuring trustees comply with charity law, by:• being proactive in preventing problems occurring in the first place• taking timely action where serious problems arise• coordinating with other agencies
Charities Back on Track 2012Common areas of concern• Trusteeship issues/serious governance concerns (58 of 85 investigations)• Accounting issues (26 of 85)• Disputes (19 of 85)• Fraud allegations (18 of 85)• Vulnerable beneficiaries (11 of 85)
Charities Back on Track 20121,027 reports of serious incidents (RSIs)121 reports from whistle-blowers1,374 assessments*5,000 First contact & Operations cases**85 investigations completed9 statutory inquiries* April-December 2011 **December 2011- March 2012
Being effective - New risk frameworkDo we need to engage? – is issue within our remit? – is another agency better placed to respond? – could guidance resolve issue?What’s the level of risk? – e.g. challenge to integrity of charity status? – beneficiaries, assets at risk? – do trustees have capacity to resolve problem?What’s the most effective response? – only most serious cases dealt with as statutory inquiries
Being effective – what’s most important?• Dealing with fraud, financial crime and financial abuse• Dealing with safeguarding children and vulnerable adults issues• Counter-terrorism strategy
What we’re doingOur main activities are still mostly unchanged:• Online guidance• Registration• Advice and permissions• Investigation and enforcement• Supporting sector initiatives: – The Code of Governance – Trustees‟ Week• Policy research
What we’ve done• 5,601 new charities registered• 85 investigations (9 statutory inquiries) completed• 213,022 emails, letters and phone calls dealt with• 1,191 Freedom of Information requests• 43m page views of our website (6m views of charities‟ details)
Guidance• Public benefit consultation• Disaster appeals• Financial controls• Exempt charities• Research• Community Interest Companies• Charitable Incorporated Organisations
Research this year• Governance of organisations seeking registration• Charity governance in Wales• Charity reserves and reporting them• Public trust and confidence in charities• Impact of the public benefit requirement• Profiling charities that file late
What we will cover New legislation Lord Hodgson‟s review Recent cases Charitable Incorporated Organisation Scotland and Northern Ireland
Charities Act 2011 Charities Acts 1993 and 2006 consolidated into Charities Act 2011 (but not 1992 Act) Came into force March 2012 No substantive change to the law – just changes to section numbers
Review of 2006 Act November 2011 - Lord Hodgson appointed to lead the review process Report published July 2012
Timescales for any changes Government expected to respond before Christmas Non-political changes – possible legislation in 2015 Political changes – in the hands of the Cabinet Office
Headline issues for trustees Payment of trustees – charities with income over £1m to have an automatic power to pay trustees No changes to protect trustees of unincorporated charities Recommendation that charity legislation should include a trustee‟s “right to information” Good practice “cap” on trustees serving more than three terms
Headline issues for charities Charging by the Charity Commission Raising the threshold for registration to £25k For larger charities, scrapping the Summary Information Return Tighter self regulation of fundraising Sector committee to progress reform of public collections
Recent cases Davies -v- Barnes Webster & Sons Ltd – unincorporated sports club – Chair of management committee sued personally for money owed on building contract White –v- Williams – schism in a religious charity. Some trustees held to have breached their duties - Judge refused them an indemnity out of the trust‟s assets for legal and other fees incurred during the dispute
Wedgwood – were the assets of the Wedgwood Charity available to pension fund creditors? On the facts, yes. Friends of Burbage School Limited –v- Woodhams – Fundraising auction – extent to which trustee was liable for services he had arranged (and an unintended bid…)
The Charitable Incorporated Organisation– are we nearly there yet? Expected before the end of 2012 Phased implementation: Initially “Brand new” charities with £5k income March 2013 Unincorporated with income over £250k May 2013 Unincorporated with income over £100k July 2013 Unincorporated with income over £25k Oct 2013 Unincorporated charities with income over £5k Jan 2014 All new and unincorporated charities
Should you/shouldn‟t you?Pros: Bespoke charity vehicle Just one regulator No need to reconcile charity and company law requirementsCons: Untested – may be teething problems No register of charges may mean lenders are wary
Across the borders Scotland SCIO already available in Scotland OSCR about to review 40 fee charging schools Possible legislation in 2013 to give separate legal personality to unincorporated associations Northern Ireland Registration with CCNI due to commence Autumn 2013
Any questions? Christine Rigby Tel: 020 7551 7712 firstname.lastname@example.orgBates Wells & Braithwaite London LLP 2-6 Cannon Street London EC4M 6YH
Mark BrownDirector & Head of Financial Services
Lucas Fettes & Partners Employee Benefit Consultants and Independent Financial PlannersAppointed to deliver pensions solution for NCVO members in April 2011
Contents Duties Your OrganisationOptions & Timescales Costs
DutiesOperate a qualifying pension scheme Auto-enrol certain workers Make contributions Provide information Compliance
Where to start Consider what you want to achieve Do I want to help my I merely want to meet myemployees save and plan for a OR minimum legal requirements? better retirement?
Timescales - Staging DatesEmployer type WhenLarge: 250+ employees 1st Oct 2012 to 1st Feb 2014Medium: 50–249 employees 1st April 2014 to 1st April 2015Small and Micro: 1-49 employees 1st August 2015 to 1st April 2017
Workplace Pension Options1 2 Consider Tailor Establish existing new scheme Scheme structure and scheme (e.g. GPP) governance Investment options and default fund Use Master Trust scheme Administration (e.g. NEST) Member communications 3
CostsMinimum contributionsEmployer Employee Tax relief Total1% 0.8% 0.2% 2% until Oct 20172% 2.4% 0.6% 5% until Oct 20183% 4% 1% 8% from Oct 2018Compliance and administrationAdvice and guidance
Action PlanEstablish your staging date NowProfile workforce and quantify impact 12-18 months Agree strategy and scheme design 9-12 months Review HR/Admin functions 6-9 months Test systems and processes 3-6 months Communicate and Implement 0-3 months
Further Information Pension Reform – A Guide for Trustees www.lucasfettes.co.uk/pension-reforms www.scottishwidows.co.uk/NCVO For more information or a copy of our slides please call 0845 357 8910 or email email@example.com This presentation has been prepared based on our current understanding of UK taxation, Law and HMRC Practice.Lucas Fettes & Partners (Financial Services) Limited is an Independent Financial Adviser authorised and regulated by the Financial Services Authority (FSA) FSA no. 146279.
PM1: Next steps forvountary action Karl Wilding, NCVO
The Road Ahead?Planning for the Voluntary Sector OperatingEnvironment 2012-2015Karl WildingNCVO Policy & Research | November 2012www.ncvo-vol.org.uk 258
A strategic planning cycle Getting the direction right Evaluation Strategic analysis Implementation Options and choices Planning
Considering implicationsWhat? = scanning the external environment to identify and prioritise the driversSo what? = considering the implications for your organisation and key stakeholders, spotting opportunities (and threats and risks)Now what? = considering the next steps your organisation might want to take: honing the opportunities down creating some strategic options making decisions about future plans
The PEST/PESTEL Framework Political Economic Socio-cultural Technological Environmental Legal
Key steps1. Map the drivers that could impact your organisation2. Sort them into the vital, the important and the interesting3. Carry out further research into the drivers that matter4. Consider the implications of these drivers and generate opportunities and options (scenarios)5. Take strategic action – make decisions about your response
The voluntary sector economy 1. Falling income, rising costs, higher expenditure to meet greater need. 2. Giving stable, but for how long? Still £900m below 2007/08 peak 3. Government contracts still increasing? Grants £2 billion less than in peak of 2003/04. 4. More trouble to come? Austerity till 2018 5. Social investment: high profile but remains niche
The voluntary sector economySource of income to voluntary organisations, 2000/01 to 2009/10 (£ billions) Source: NCVO/TSRC, Charity Commission
Plugging the deficit: Govt plans £10bn more benefit cuts Source: IFS http://www.ifs.org.uk/budgets/budget2012/ budget2012carlemmerson.pdf
Voluntary sector policy environment 1. Government approach: „showing not telling‟, „local not national‟ 2. Changing landscape: more emphasis on frontline 4. Public services: payment by results, level playing field? 5. Focus on delivery: Localism Act; social value; Big Society Capital; mutualisation
Key VS policy issues 1. Public services • Social value Act 2. Localism • Right to challenge • Right to bid 3. Charity Law & regulation • Fundraising • Public benefit • Role of the charity commission 4. Funding & finance issues • Giving & taxation • Social investment
Social attitudes Attitudes towards taxation and spending 2000-10 (%) (Source: British Social Attitudes Survey 29, 2012)
Social attitudes 1. Inequality and fairness still important narratives: but social attitudes are hardening 74% agree the income gap between rich and poor is too large 34% believe government should take steps to redistribute wealth 2. Less support for collective public services? Support for increasing taxes and spending more on health, education and social benefits has decreased from 51 % in 2000, to just 30% in 2010 3. And public support for the welfare state? 63% believed parents who "dont want to work" were a reason why some children lived in poverty 55% believe unemployment benefits are too high and that they discourage those out of work from finding new jobs Source: British Social Attitudes
Technological change 1. Mobile devices primary device for connecting with internet for increasing number of people Smartphones are predicted to overtake standard mobile phones in 2012 Mobile app downloads will rise from 10.7bn in 2010 to 182.7bn in 2015 2. New ways to pay and give?: NFC payment, new web and mobile payment technologies, group buying, crowdfunding 3. Mainstream: social media, social analytics, cloud computing/storage 4. Rising interest in „Big Data‟ and open data 5. Social action and technology: still very much focus of innovation in our sector
Considering implicationsWhat? = scanning the external environment to identify and prioritise the driversSo what? = considering the implications for your organisation and key stakeholders, spotting opportunities (and threats and risks)Now what? = considering the next steps your organisation might want to take: honing the opportunities down creating some strategic options making decisions about future plans
So what?: Opening up thinking • External: • Users and their needs • Funders and their priorities • Relationships and influence (other players, policy makers etc) • Internal: • Workforce (paid, volunteer, trustees) • Your work (services and activities) • Governance (including accountability and evaluation) • Systems and skills (including communication, administration etc)
Taking actionWhat? = scanning the external environment to identify and prioritise the driversSo what? = considering the implications for your organisation and key stakeholders, spotting opportunities (and threats and risks)Now what? = considering the next steps your organisation might want to take: honing the opportunities down creating some strategic options making decisions about future plans
Making decisions about how yourorganisation will respond This step in the process is about linking „so what?‟ and „now what?‟ Making sure your organisation has… • considered a healthy range of opportunities/threats • developed a range of possible responses • considered responses and decided which are the most appropriate Perhaps you could use the Improve, Innovate, Improvise idea suggested earlier….
What are the implications for your organisation?
Taking strategic action 1 Narrowing down responses… What are the strengths and weakness of your proposed responses to the drivers you have identified? On balance, which option/s work best for your organisation?
Taking strategic action 2 Perhaps your organisation could think about…. • What is realistic and achievable in the next 3 years? • Are there quick wins that could be made in the next year? • Are there ideas to capture but to be taken forward in a more gradual way or agreed to revisit at some later point?
The Road Ahead? 1. Rebalancing the economy: growth v austerity 2. The „squeezed voluntary sector‟ 3. The new money: social finance and evolving business models 4. Political polarisation: the anti-welfare agenda 5. Accountability in a digital age 6. Data-driven social change
Thank you for engaging!Twitter: @karlwildingemail: firstname.lastname@example.orgPhone: 0795 137 3511NCVO Policy & Research | November 2012www.ncvo-vol.org.uk 284
PM2: Commissioningand public servicedelivery Julian Blake and Selman Ansari, BWB
1. The public service contracting environment Public policy – the public sector as commissioner and custodian of public benefit delivery. Charities suppliers within “Big Society/mutualisation” concepts. "Seller does not know how to sell; buyer does not know how to buy". Need to know “how to buy” and respond, in practical/legal terms, to commissioning practice. Issues: i) procurement; ii) contract terms; iii) contract management. Issues re contracting standards over 20 plus years:
The public service contracting environment "Compact" (between Government and public benefit sector - highlighting problems from inequality of bargaining power; "Full cost recovery" - campaign for fair pricing (should include "reasonable surplus". "Merlin Standard" promotes positive working relationships in contract chains. Management within internal control for charities – delegation/policies and procedures/manager and employee performance. Current problems in commissioning/procurement.
2. Procurement process Authorities duty to act objectively, treating all suppliers equally/fairly/reasonably. (Pre-qualification questionnaire); Invitation to Tender; Tender; Assessment; Award; De-brief; Stand-still period before contract entered into; Contract. Tender must be assessed on clear, disclosed basis. Possible other procedures: i) direct negotiation (urgency or specification needs supplier input); ii) dialogue to develop final bids (where complex). Whatever standard of process, must meet all requirements, or risk disqualification.
3. Procurement issues “Procedures onerous/complex” - EU procedure not requirement for “Part B” below £170k value) –Treaty principles apply, process must be: objective, fair, reasonable, provide equal treatment, proportionate and transparent. “Pre-procurement engagement not possible” - consulting supplier knowledge desirable; must not confer advantage;
Procurement issues “Questions cannot be asked” - should be an opportunity to ask questions, provided answers given to all bidders. “Procedures are invariable” – all parties may benefit if compliance issue raised early. Rights to feed-back; challenge; claim if not treated fairly/equally (within rules and inherently). Many processes vulnerable – raising tactics of challenge. Purpose lost - form over substance. Barriers based on size – unnecessary performance bonds.
Procurement issues Assessment best value re price/quality/and social value; transparent criteria and scoring. Social Value powers - EC 2010 “Buying Social”); “duty to consider” under Public Services (Social Value) Act 2012; right to challenge under Localism Act 2011. Social Value promotion/articulation/assessment/measurement (work in within rules).
4. Contract formation within procurement The Invitation to Tender should set out contract terms. Should allow opportunity to propose alterations. Some negotiation may be possible once tender won, but this and later revised agreement risk challenge for unfairness to other bidders without opportunity to offer on changed terms. Review for risk/lack of clarity. Often pragmatism required; focus on important issues.
Specification Service definition/standards/timescales/KPIs/promises (“warranties”) should be reasonably achievable. "Reasonable endeavours" to meet targets; commitments to meet requirements. Variation should be by agreement/agreed mechanism. Unilateral rights to vary common and unacceptable. Performance assessment should be objective – not “in commissioner‟s opinion”. Intrusion re personnel/beneficiary relationships unacceptable. Judge reality of risk.
Price Price/payment provisions should be clear. Increase with inflation a Compact principle. Whether the price VAT inclusive/exclusive should be explicit. Statutory right to late payment interest. Operative provisions Duration reasonable by re supplier‟s commitment. At least three years -Compact principle. Avoid confusion with grant: contract price payable for service delivered, not subject to eligible expenditure/clawback.
Contract management provisions Relationship management provisions, on liaison, variation, review, renewal dispute resolution are desirable, within terms, or by agreement outside them. Termination may be on fundamental/non-remedied/repeated breach, or specified notice, which is reasonable in the context of supplier disengagement. Technical provisions Legal boilerplate less important than a good specification. Indemnities often unnecessary; drafted two widely. Proper functions i) risk reallocation; ii) enhancing contract remedies.
Limitation of liability reflects relative resources. Limitation to price (or multiples) may supported by insurance. Exclusion for "consequential loss" as opposed to "direct loss" conventional. Excluding actual types of loss desirable. Performance bonds unreasonable and increase price. Confidentiality/data protection/publicity provisions should protect both parties and beneficiaries.
Commissioner requires support in meeting freedom of information obligations, provided balanced against confidentiality. Intellectual property produced under contract transfers only by express agreement, (otherwise licensed).
5. Sub-contracts Sub-contracting likely to be controlled under contract. Obligations to follow procurement rules may be imposed; apply anyway to supplier mainly funded by public funds). Ensure specification, price and duration provisions matched in sub-contracts.
6. TUPE Transfer of Undertaking (Protection of Employment) Regulations apply on transfer of a contracted service on procurement and in reverse at end of contract). Employees wholly/mainly engaged in service automatically transfer with it, on existing contracts. Dismissal in connection with transfer automatically unfair. Outgoing/incoming employers obligations in relation to consultation and information. Incoming supplier can apply special procedure to rationalise a combined workforce. Should be provision for employee information to be provided during procurement and by outgoing supplier at end of contract.
7. Tactics of reasonableness Seek interactive relationship with commissioners. State position in writing to persuade and provide record for possible future use. Record can help with future arguments based on unreasonableness - showing matter first raised in anticipation, not just reaction. Raise procurement issues in writing early, with escalating formality, to get process corrected/ started again; or as marker for later use if necessary (but beware time limits). After winning tender, in practice, take opportunity to clarify/improve terms - material change challengeable, but a risk judgement.
Tactics of reasonableness Challenges to performance often imprecise. Keep precise record of all such engagement, positive and negative. Don‟t simply accept commissioner determinations on performance; refute allegations in writing so they don‟t accumulate; require substantiation with reference to actual obligations. Notwithstanding concerns about future relationship; cost; possible consequences for beneficiary group, be aware of formal rights and powers in relation to procurement and contract
Tactics of reasonableness Procurement - debrief; standstill period; Remedies Directive; damages. Contract – resistance to claims of breach; claims re commissioner breach, including repudiatory breach.
Julian Blake and Selman Ansari PartnerCharity & Social Enterprise DepartmentBates Wells & Braithwaite London LLP 2 – 6 Cannon Street London EC4M 6YH Tel: 020 7551 7746 Fax: 020 7551 7800 Email: email@example.com firstname.lastname@example.org
PM3: What every newtrustee should know Lindsay Driscoll
Governance is• The systems and processes concerned with the – overall direction – effectiveness – supervision – accountability of an organisation
Governance• Is not necessarily about doing• It is about ensuring things are done
Charity Trustees-Definition• Charity trustees are the people who have general control and management of the charity• May be known as the Board, Management Committee, Council, Governors etc• In charitable company will be directors and duties of company directors will also apply
Trustee Recruitment and Appointment • Charity trustees may be appointed , elected, co opted, ex officio • In all cases responsibilities will remain the same • Declaration of eligibility • Fit and proper persons • Recruitment and diversity-good practice • Induction • Code of Conduct
The Twelve Main Roles• Set and maintain vision, mission and values• Develop strategy• Establish and monitor policies• Risk management• Ensure compliance with the governing document• Ensure accountability
……continued• Ensure compliance with the law• Maintain proper financial oversight• Select and support the chief executive• Respect the role of staff• Maintain effective board performance• Promote the organisation
Trustees‟ Responsibilities• Responsible for proper administration of the charity• Must accept ultimate responsibility for everything the charity does• Act reasonably and prudently . – Duty of care and skill linked to special knowledge and experience of individual trustee. – Take external advice where appropriate
Trustees‟ Responsibilities• Safeguard assets includes reputation• Use assets only for charity‟s purposes• Ensure that charity carries out activities which further purposes for public benefit – under Charities Act 2006 Trustees must have regard to CC guidance on public benefit• Act collectively. Responsibility for decision making rests with board as a whole
Trustees Responsibilities• Comply with constitution, relevant laws and regulators• Special rules for investments and disposal of land and buildings
Trustees Roles and Responsibilities• Act solely in best interests of the charity – trustees must exercise independent judgement .must not fetter discretion• Avoid or manage conflicts of interest
Conflicts of Interest• Under charity law must act in interest of charity only• “Representative” trustees.• Trustees also users, members ,volunteers• Under Companies Act 2006-duty to avoid conflict of interest but may be authorised or managed through compliance with conflict provisions• Covers financial interests such as trustee benefits and conflict of loyalties. No statutory definition. May be direct or indirect• Connected persons
Managing Conflicts• Provision in Articles of Association• Declaration form on appointment• Register of interests. Annual review• Declaration at meeting• Absent trustee from quorum , discussion and voting• Remaining and speaking when required
Benefits to trustees• Trustees cannot receive direct or direct benefit from charity unless authorised by governing document or statute or Charity Commission• Can claim reasonable expenses• Charities Act 2006 gives default power to charity to pay trustees for services – does not extend to payment as trustees or employees – must not be express prohibition in governing document – only minority can benefit – number of conditions must be observed
Decision making by charity trustees• Charity trustees must ensure – the decision is within the board‟s powers – the board is acting in good faith – the board has adequately informed itself – the board is not swayed by irrelevant factors – the decision is within the range of reasonable options open to the board
Company Directors duties• Act within powers• Exercise independent judgement• Exercise reasonable care, skill and diligence• Avoid conflicts of interest• Not accept benefits from third parties• Declare interests in proposed transactions with company• Act in way most likely to achieve purposes
Types of Liability• All trustees potentially liable for criminal sanctions and breach of trust or breach of duty – Examples – Very rare for trustee to be held guilty of breach of trust where acted in good faith• Trustees of unincorporated charities have potential liability under contract and tort e.g. negligence but will normally be reimbursed from assets
Relief from Liability for breach of trust• Act reasonably• Act honestly and• Ought fairly to be excused
Directors‟ Liabilities• Directors have limited liability however may be liable for – Wrongful and fraudulent trading – Personal guarantees – Criminal sanctions – Breach of fiduciary duty (trust)
Wrongful Trading• Know or ought to know• No reasonable prospect of avoiding insolvent liquidation• Do not take every reasonable step to minimise losses to creditors
Minimising Risk• Good management• Risk assessment• Indemnities• Insurance• Contractual limitation• Trustee (D&O) indemnity insurance• Awareness of wrongful trading• Don‟t give personal guarantees
Delegation Ground Rules• Power to delegate• Delegated authority should be in writing• Powers given-clarity as to extent of delegation including budget and term• Reporting requirements• Subject to regular review
Good Governance Code• First edition of Code in 2005• Voluntary sector owned and led• Revised Code October 2010• Two new versions 2010-2011 one for smaller organisations without staff• Six high level principles of universal application plus relevant law, why principle is important and examples of good practice
Code of Good Governance-cont• How Code is used• Apply or explain• Versions for sub sectors• Website-Code versions plus additional resources e.g. Jargon Buster, model policies, toolkit and links to further information and precedents• www.governancecode.org
Principles• An effective board will provide good governance and leadership by – understanding their role – ensuring delivery of organisational purpose – working effectively both as individuals and as a team – exercising effective control – behaving with integrity – being open and accountable
Challenges for boards• Principle 1. Understanding role – avoiding inappropriate involvement in operational matters but taking responsibility for challenging and holding to account senior managers. See also allowing exercise of delegated authority• Principle 2.Ensuring delivery of purpose – remaining alert to external and environmental factors. Need for collaboration .merger, different ways of working or closure
Challenges for boards• Principle 3. Working effectively – review of performance of both boards and individual board members• Principle 4 Exercising control – recognising value of diversity as a means of identifying and managing risk
Challenges for boards• Principle 5 Integrity – following governance document provisions, policies and procedures to identify and manage conflicts of interest and loyalty• Principle 6 Accountability – demonstrating that organisation learns from mistakes-handling complaints constructively as valuable source of management information
PM4: Board Mechanics –putting the spotlight onbehavioural leadership • Tessé Akpeki, OnBoard consultant • Richard Cordon
The Scope of the Consideration• The nature of conversations in the boardroom (Boardroom Climate).• How the board respond to each other when handling conflicts - The way dissent is handled.• How decisions are made links with people who use the service (the mission moment).• How members relate to the board and staff.• Standards of accountability.• Standards of behaviour.• Standards of relationships.
Key Drivers of Effective Governance• Good team working.• High quality board meetings.• Having the right skills and experiences.• Focussing on strategic rather than operational matters.• Having openness and trust.• Being a diverse group of people.
Key Drivers in Place (of the Top 20)• A good relationship between the chair and chief executive.• The quality of information provided to the board.• The skills and experience needed to provide good governance.• Openness and mutual trust.• The effectiveness of committees.• Away Days.
Circles of Influence would be in the Shape of an Onion CORE
Emotions that Lead to Action Anger (Acquire) Fear (Defend) Happiness Surprise /Sadness (Learn) (Bond)
Johari Window Model known unknown ask by self by self 1 2known solicitation open/fre blin feedbackbyothers e area d area tell self- shared others‟ disclosure/exposure discover observation yunknown hidden unknow discover area self-by others 3 n area 4 y
The Johari Window Trust Model Others ARENA BLIND SPOTS Open Communication Self Discovery “You know... I know.” “You know… I don‟t know.”Self POTENTIAL Unknown MASK “I don‟t know… Hidden You don‟t know.” “I know… You don‟t know.”
Healthy Relationships HR = 3CV (S+P) "Healthy relationships equal three corevalues multiplying structure and process."
Six Critical Components of Good Governance• Communication.• Decision-making (designing the board structure and processes).• Conflict Resolution – enforce group norms.• Strategic Planning.• Delegating Authority and Responsibility (define the relationships) – how leadership roles are distributed.• Monitoring and Measuring (accountability).
The Relationship ModelThe Relationship Model™ defines and establishes theserelationships in such a way that the authority of eachposition and the expectations of the responsibility of each isclear and agreed by all parties.Affirmation - Involvement - Servant Leadership
Defining the Components of Trust Trust = Credibility x Intimacy __________________________________________________ Risk (Source - Trust: The Essence of Collaboration (John Phillip and Bill Cope, Synectics )) Trust = Credibility + Reliability + Intimacy _______________________________________________________________________ Self orientation (or focus on oneself)Are we more focused on self? Or more broadly on others? (Source - The Trusted Advisor (David Maister))
Think Tennis: Collaboration and Support“The board cannot govern effectively without the chief executive and the chief executive cannot lead the organisation to its full potential without the board’s support.”
Dimensions of Governance• Dimensions = Structure + Meetings• Dimension = Information + Nature of debate• Dimensions = Partnership + Supervision• Dimension = Composition + Leadership• Dimensions = Learning + Governance Ie. What you do and what you learn. (Source - 2012 BoardSource Governance Index)
Characteristics of Trust Relationships: Applying the Trust FormulasTrust:• is personal;• grows rather than appears (and can disappear quickly)! It is not static;• presumes a two-way relationship;• is rational and emotional;• engages us at our heart level;• is intrinsically about perceived risk;• enhances vulnerability (we increase our confidence in acting in an unguarded way); and• can change as we build credibility and intimacy.
A Trust Model: Trust Benefits to Boards and Organisations“When trust goes up, the speed will go up and cost will go down.” (Source – The Speed of Trust (Stephen Covey)) “Trust is the foundation of team success.” (Source – The Five Dysfunctions of a Team (Patrick Lencioni ))• Board members are more engaged and derive more satisfaction from service.• With high trust levels comes more respect, mutual confidence and social bonding (relational trust).
Trust Building Activities (Board Practices + Board Exercises + Individual Behaviours)• Board Practices.• Recruiting.• Induction.• On-going board development – coaching and mentoring.• Board Meetings.• Between Meetings.• Creating boards with greater diversity and more balanced membership.• Discuss business routines & cultures – experiment, innovate, disrupt routines.
Takeaways: Mechanics that make a Difference• Ensure problems are well defined.• Ensure the idea to execution framework exists and is consistently applied.• Habitually question relevancy, orthodoxy and the organisation‟s purpose and vision. (Source - Consider: Harness the Power of Reflective Thinking in Your Organisation (David Patrick Forrester))
Board Exercises• Board reviews (Individual trustees and the whole board).• Personality profiles (MBTI, DiSC, Enneagram, Insights, Birkman, etc.).• Conflict norming – agree what is acceptable and unacceptable; discuss and agree on common understanding of how „we‟ will behave. Consider how you will respond to challenging situations and address inappropriate behaviour.
What if…• We could increase the effectiveness and sustainability of our organisations?• We looked at our board recruitment in a whole new way?• Every board lived a culture of inclusion?• Collaborative leadership took hold in the boardroom?
Tessé AkpekiOnBoard Governance Development 2-6 Cannon Street London EC4M 6YH Tel: 020 7551 7723 Mob: 07931 781242 Fax: 020 7551 7800E-mail: email@example.com Web: www.on-board.org
NCVO TrusteeConference 2012in association with BWB#Tconf12 Good Governance and Leadership
PM5: The role of trusteesduring mergers • Reza Motazedi, Deloitte Partner and Head of Charities • Bruce Gordon, NCVO Honorary Treasurer
Focus on key issues• Understand the wider economic and political outlook• Set your charity’s strategic priorities.• Think outside the box; compete, collaborate or merge?• Understand the financial picture; if you have to merge do it quickly• Why are you doing this? Internal; external; sectoral drivers• Remember the beneficiaries; you exist to serve them• Build trust as a board about the way forward; share concerns• Acknowledge possible loss; very local presence, trustee positions etc
Choosing merger partners• Many mergers follow a period of successful collaboration• But: don’t just pick the girl/boy next door.• Making the approach• Sealing the first date; be patient!Ultimate decision; “ whether it is the right thing to do rather than from a single identifiable rational reason”. IVAR (2011)
Other player analysisQuestions to ask Other player Sources of profile information• Who are the other players (may • Background • Internet include funders/donors)? • Financial • Personal visits• Are they competitors or information • Talking to partners/potential partners? (annual beneficiaries/• What are their objectives? reviews) grantmakers• What strategies are they pursuing • Services • Advertisements and how effective are they? • Marketing • Presentations• What are their strengths and strategies • Conference / weaknesses? • Facilities trade show• What geography do they cover? • Personnel displays• What are the relationships like • Effectiveness • Publications between us? • Values Bruce I, Copeman C et al (2008) 379
What is essential and what is desirable?An example:• Should be either a national organisation or have national aspirations• They will treat our staff well - an infrastructure to support and develop the staff, and proposals to fund the positions in the future• They will cherish the work - understand the importance and focus, have resources to support and to develop• They will understand how to take the work forward 380
Your role in the merger taskforce• Delegated powers• Taskforce of people with the skills to achieve the negotiation• Don’t meddle!• Know your break points and when to walk away• Process and people:“The effective leadership provided by key individuals throughout the merger process was one of the most commonly occurring success factors”. Learning from Mergers, Capacitybuilders (2010)
How to manage risks• Limit costs• Appropriate degree of due diligence• Transfer of assets• Know what you don’t know• Charity Commission’s website and publications• Use your networks• The everyday work of the charity must go on• Post merger implementation plan
Communication• Be aware that mergers are extremely stressful.• Ensure a communication plan for all stakeholders is in place• Keep in touch with the merger team• You are a sounding board• Support your CEO• Decide – and communicate your new name, trustee board and senior management team as soon as possible“We found social events as important as meetings so that people could find out what made each other tick!”Dorit Braun, CE Parentline Plus in, Merger, a Model of Collaborative Working, NCVO (2006)
Handling conflict• ‘Culture’ the most commonly reported barrier; 52% (NCVO)• Set the vision – and stick to it• Mergers may involve change, restructuring or even redundancy• Your role could change in the new set up• Value of external support
ConclusionsRemember…it won’t be perfect, but yourcontribution enhances prospects of success•Most private sector mergers fail•Evaluate your outcomes; did you achieve what youintended?•Don’t follow the merger mood music; but don’t bescared to merge•Above all, remain true to your mission
Contact: Denise Fellows Chief Executive Honorary Treasurers Forum Cass Business School 106 Bunhill Row, London, EC1Y 8TZ Email: firstname.lastname@example.org Tel: 020 7040 8781 Web: http://www.treasurersforum.org.uk
PM6: What trustees needto know about socialfinance • Luke Fletcher, BWB Senior Associate, Social Finance Team • Simon Steeden, BWB Senior Associate, Social Finance Team • Joe Ludlow, Nesta Director of Social Ventures
Overview Making investments Receiving investment Lord Hodgson and suggestions for reform A social investor‟s perspective: NESTA
Investment by charitiesFinancial investment: justified solely on the basis of itsanticipated risk-adjusted financial returnProgramme-related investment : justified solely on thebasis of its anticipated social (charitable) impactAre these the only options? Mixed motive investment
CC14 – Investment Spectrum Financial Return Social ReturnFinancial Ethical Mission Mixed Programme Connected motive Related
Financial investmentInvesting for financial returnTrustees should consider: Risk in the investment Standard investment criteria: Suitability of investment (and investment class) Diversify where appropriate Permanent endowment? Ethical investment policy?
Bishop of Oxford case (1) Leading case on ethical investment by charities Guiding principle: “[Investment] powers must be exercised for the purpose for which they have been given: to further the purposes of the trust. That is the guiding principle … Everything which follows is no more than the reasoned application of that principle in particular contexts.” - Sir David Nicholls V-C
Bishop of Oxford case (2) Where property is held as an investment: “for the purposes of generating money” … … best interests of charity generally to: seek maximum total financial return consistent with commercial prudence Exceptions: (1) conflict with objects (2) alienation of supporters or beneficiaries (3) no risk of significant financial detriment
Bishop of Oxford case (3) What if property not held “for the purposes of generating money”? Distinctive circumstances of Church Commissioners: Pension provision for CoE clergy Strong imperative to grow capital for future provision analogy to private pension trustees But what about: general unrestricted funds of a charitable trust where trustees believe best interests of the charity are served by investment for a social, or mixed return? greater freedom to determine best interests of charity?
Programme related investmentInvesting to advance charitable purposesTrustees must ensure that: Charitys funds only used to further charity‟s objects Any private benefit is necessary and reasonable In best interests of charityAlso consider: Effective as a way to achieve objects? What if the project ceases to further charity‟s objects? Exit?
Mixed motive investmentWhere investment cannot be justified alone: by social (charitable) impact, or by risk-adjusted financial return… but in best interests of the charity, due to combined „return‟Charity Commission guidance (CC14) accepts MMI approach
CC14 – mixed motive practicalitiesTrustees to consider before investing: Combined financial and social return justifies investment? any private benefit is appropriate? Tax implications? Monitoring? Accounting treatment?
Conclusions Must act in best interests of charity, including when investing Clarity on basis of investment is important CC14 helpful on mixed motive investment – but only guidance Complexity deterring market development? Can reform make trustee duties clearer?
Trustee duties Duty to advance purposes v duty to act prudently and safeguard assets Trustees as stewards and not owners Must act reasonably and not recklessly Trustees should take calculated risks A cost benefit analysis
Market realities Few charities taking hard finance directly Borrowing against secured assets Limited recourse borrowing Soft loans and sympathetic finance SPVs, joint ventures, trading subsidiaries Not placing whole balance sheet at risk
Difficult questions The line between public and private benefit For example, community investment What levels of return are permissible? What about quasi-equity participation? How are conflicts of interest managed?
Lord Hodgson‟s Review “Giving charity back to charities” Key recommendations Investment duties of trustees Introduce specific statutory powers Redefine private benefit Clarify tax treatment
Statutory clarification of duties Clarify that charities should invest in light of their charitable purposes Applies to suitability and diversification Would encourage SRI/MCI/PRI/MMI Would encourage co-ordination Would allow trustee discretion
A general statutory power The power - charities should be able to accept higher risks or lower returns in exchange for higher social impact Where investment supports or directly advances charitable purposes Where trustees consider it in the best interests of the charity An area which presents difficulties
A statutory power for permanentendowment The power - allow permanent endowment capital to be invested as MMI/PRI as part of usual suitability or diversification duties Capital cannot be spent - must invest Balance needs of future beneficiaries against needs of present beneficiaries Where trustees consider it in the best interests of the charity A highly technical and complex area
Private Benefit Arises in all investments and transactions “Necessary and incidental” – current test Only tends to come into focus in MMI/PRI Encourages conservatism Hinders innovation “Reasonable and proportionate”? (BWB) “Necessary and proportionate”? (Hodgson)
Tax Must be supportive of any reforms Again a complex and technical area Charitable trusts and charitable companies - different tax treatment Trustees must be able to invest with confidence
Key Themes Charities are different to private trusts There is a need for clarity in difficult areas We should rely on general principles and trustee discretion where possible Avoid prescription / express limitations
Other reform agendas Financial Services Bill Red Tape Challenge Treasury Review
• 14 year history of backing innovation in the UK• research, programmes, inv estment, skills • £300m endowment • registered charity, innovation for public benefit 416
What is impact investment?• Our definition of impact investment is: “investment with the primary goal of achieving positive outcomes for individuals, communities or society as a whole, and with a secondary goal of achieving financial returns for investors”
Why does Nesta do work in this area?• Pressing need for social innovation• Investment is needed to fund: – the creation of new social innovations; – to support their development and testing; – to scale up those innovations that work.• Just like other innovation really• Nesta has been working to build the field….
Impact investment is a tool to drivesocial innovation, not the goal in itself• Pressing social issues + reorganised public markets• Social innovations with State profitable social business models Social Private• Increased use of technology driving scale Sector Enterprise• Lack of risk Citizen capital, especially for early stage 420
Why has Nesta become a fundmanager? Nesta Programmes Nesta venture capital and Nesta Policy and impact Research investment experience Nesta £8m Nesta’s networks N-II1 cornerstone as PRI 421
Nesta Impact Investments:Investing for Public Benefit in the UK Outcome- Inclusive Affordable Accessible Sustainable focused• We believe it is possible to meet the requirements of programme related investment whilst investing in a range of entities.• We do not favour charities over companies or vice versa• We must see a commitment to each of the criteria above. 422
Investing in social innovation isn’t just aboutscale-up, we need to focus on what works Low Standards of Evidence for Impact Investment NII1 creates Public 5 Benefit through its investment by: • Delivering impact 4 Some investments will • Reducing impact underperform risk Impact Risk • And growing output (not shown here) 3 2 We won’t invest here We invest in innovations High 1 Negative Neutral Positive Impact Potential 423
Toxic Stress Changes Brain Architecture Typical neuron—Normal many connectionsToxic Damaged neuron—stress fewer connections Prefrontal Cortex and Hippocampus Sources: Radley et al. (2004) Bock et al. (2005)
Brake failure: reduced size of frontal cortex in Antisocial Personality Disorder • A pattern of disregard for, and violation of, the rights of others (DSM-IV-TR, 2008) • Also referred to as „psychopathy‟ and „sociopathy‟ • Left hemisphere of the brain • Comparing violent/ non-violent individuals • Left image is outter (lateral) left- hemisphere; right image is inner (medial) left-hemisphere in reverse• Left-medial-prefrontal cortex is outlined: shows reduced volume in violent individuals• These are signs that something different is going on in the brains of pathologically aggressive people (Narayan et al
Kids Company PATH TO RESILIENCE Assessment Active Referral Basic Needs Moving On & Monitoring EngagementSelf-referral at a Initial Assessment Housing Drop-in Centre Work PlacementSchool or Centre (food, play) Care Plans Immigration Gained EmploymentInter-agency Referral Activity Participation(immigration, housing, socia Intervention Reports Physical Healthl services etc.) Full Time Education (GPs / Dentists, Opticians) Supplemental Incident / Cause for EducationOutreach Disengaged Concern Reports Emotional Wellbeing Positive Experiences Right2Health / (work placements etc.) Therapy Trips, Residentials Safeguarding & Child Protection Poverty Busting (basic goods, such as underwear, shoes and beds) Colour a Child’s Life (home renovations) Becoming Legit (passports, driving licences) Financial Support
Camila BatmanghelidjhFounder and DirectorKids Company Welcome #Tconf12 Twitter: #Tconf12