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Recent public controversies over three of Ireland’s largest charities – National Maternity Hospital, St Vincent’s Healthcare Group and St John of God Community Service has generated a lot of debate and questions over the ownership, control, accountability, independence, ethos and values of these organisations. Many of these important questions are still being played out.

 

Having a robust public discussion about the governance structures and arrangements is healthy and beneficial, even if at times, the debate gets caught up in sensational headlines and ill-informed and inaccurate comment and opinion masquerading as fact.

 

These are very big organisations providing essential healthcare and social services to the Irish public. In 2015, these three organisations received over €400 million from the State for the provision of these services. The scale of this funding raises some very legitimate questions regarding the level and nature of government control, accountability and oversight of these monies and the services commissioned by the State. Indeed questions about the level of control and accountability goes beyond the actual provision of the commissioned services and extends to how the organisations are governed and managed.

 

The recent Benefacts Analysis Report on the Irish non-profit sector[1] has identified the concept of “quasi- public bodies“. These are nonprofit bodies that provide services to the public but operate on special terms with government in as much as their voluntary boards do not exercise control over the remuneration of their employees. These organisations are the so called “Section 38” providers of health and social care services, the higher education institutions and the local providers of family support, drug rehabilitation, citizens’ advice and other local development supports and services, directly established by government. Benefacts has identified 347 of these quasi-public bodies. They account for just 2% of the 19,505 organisations included in the Benefacts Database of Irish nonprofits but they receive more than 70% of the reported income from government by all non-profits which in 2015 amounted to €5.3 billion.

 

These “quasi-public bodies” are all non-profit organisations operating as companies limited by guarantee with no share capital and/or as registered charities. They are in the business of organising and delivering complex services on a large scale, employing hundreds/thousands of staff and dealing with an extensive range of risks and regulatory requirements.

 

They are all governed by voluntary boards of directors and trustees. The duties and responsibilities of these voluntary directors and trustees are comprehensive and onerous. The level of oversight and control that these board directors and trustees are required to exercise is raising the question of the suitability and effectiveness of our current governance and legal structures for the delivery of large scale and complex health and social services. For example, how much time do we think is necessary and appropriate for the unpaid voluntary non-executive directors/trustees of a hospital or disability services provider to devote to meeting their legal and governance responsibilities of leadership, control and accountability? Is 10-15 hours a month or a week sufficient? What are the skill sets and supports that need to be in place? Is there a sufficient pool of people available with the required skills and experience who also have the ability and willingness to commit the necessary time to take on the governance responsibility for these important but very complex organisations?

 

Given the complexity, the depth of responsibilities, the time commitment and the range of risks including the risk to one’s personal reputation, are our expectations and ask of these volunteers excessive and unrealistic?

 

In the UK, there is an emergence of a debate around the concept of having both non- executive and executive directors on the boards of larger charities and non-profit organisations. It is quite a controversial concept. One that has its advocates and opponents. A mix of executive and non-executive on boards is the accepted governance practice in “for-profit” private sector organisations, but it is still very much a taboo topic in Ireland.

 

In light of recent controversies and concerns over the governance of Irish charities and non-profits and the increasing complexity and depth of responsibility being required of our own volunteer directors and trustees, I am becoming increasingly of the view that our current governance and legal models are no longer fit for purpose. I believe it is time to have a look at their suitability and practicality. It is another topic that merits consideration by the consultative panel on the governance of charities[2].

 

In this piece I have focused on issues for the larger non-profit organisations, but there are also governance issues and questions over the appropriateness of our current legal structures for smaller non-profits which merit a separate article.

 

 

 

Diarmaid Ó Corrbuí, CEO Carmichael Centre

 

 

 

 

 




[1] Benefacts Nonprofit Sector Analysis 2017

[2] Charities Regulator; CONSULTATIVE PANEL ON THE GOVERNANCE OF CHARITABLE ORGANISATIONS https://www.charitiesregulatoryauthority.ie/en/cra/pages/wp17000006

 

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