Senior Consultant, Nick Ivory gives his insights on the similarities between the 3rd Sector and Commercial sector in a fast changing governance environment.
The past few years in the charity sector have been extremely exciting with significant growth across all levels. This growth has led to more and more governance professionals training and qualifying in the 3rd sector. Having worked with clients and candidates in both the private and 3rd sectors for several years, I am often asked about a career in one area over another.
I therefore thought it would be useful to give some further insight.
There are questions we at DMJ get asked as to whether there are differences around pace of work, operations at board level, number of meetings etc. I have outlined a few reasons below as to why the 3rd sector is starting to align itself with the private sector.
- High profile failings in governance over the past few years with organisations such as Kids UK and FIFA have put the spotlight on organisations in the sector. This has led to governance restructures and governance restructures. Due to the public nature of these organisations they cannot afford to be caught out. Their company secretarial teams need to be at the forefront of this leading on governance and working closely with the board and trustees.
- Speaking with CEOs and Chairs within the 3rd sector we tend to find that the majority want their charities to be operating at the highest level and utilise the model/example that the private sector provides.
- Similarities. There are several similarities when it comes to a high-profile charity and your typical FTSE100 company.
- Both operate through several boards, committees and a senior management team.
- Private sector has Non-Executive Directors, public sector has trustees. The Company Secretary in either must build strong relationships with those individuals.
- Turnover. The majority of these charities have huge incomes through fundraising, competing closely with the inflow of some top FTSE businesses.
i. The top household name charities through fund-raising and other funding channels typically have incomes of hundreds of millions of pounds.
ii. Your average PLC company is not far off, of course it ranges depending on the side. But inflows can be anything from tens of millions to billions.
4. Charities have a business arm. Most if not all will have an element of the charity that is a LTD company having to file annual returns etc. These are dealt with by the company secretary.
5. The role. It is recognised across the market especially within PLC that the role remains very similar no matter what sector you operate in. You could be working one day in the mining sector and take your next step in your career but find yourself in the real estate sector. Two extremely different businesses but the company secretarial role stays relatively similar. Could it be similar for charities?
It should be noted that those making a move across will need some elements of training to get them up to speed with certain areas. But that would be the same if you were making the move the opposite way. People have made this move and I’m confident more will start to make the move in the coming years.
In a market that can suffer from supply and demand issues, should businesses be looking outside the box and considering those with relevant but non-private sector experience and vice-versa?
If you would like to discuss any of the above, you can find my contact details here.