Environmental, social, governance (ESG) Accounting and reporting

CEO pay - the wrong reaction?

I used to work with a smashing guy whose wife applied to be on a certain reality TV programme, in which several individuals cook for each other and then mark the results. She got through to the last stages, at which point she was dropped because she was ‘too nice’ and her unwillingness to be horrid about others' attempts would ‘not have made good telly’.

Black and white positions, polarised views, angst and tension are all far more interesting than reasonableness. As a sector, we recently got sucked into perpetuating this approach on the subject of CEO pay. Whilst it’s unsurprising that many feel real anger at the media, I think we missed an opportunity to focus the debate on the real issue - what does ‘charity’ mean today?

Our definition is becoming increasingly disconnected from ‘public’ ideas of what charity is, and this signals a growing crisis that I have written about before. We won’t convince everyone, but here is the simple truth: ‘charity’ is not a single thing. It covers a multitude of business models and causes, from large complex organisations to tiny voluntary setups, with everything in between.

Serving all faiths or none, pro- or anti- private education, with a passion for animals, aid, or health, there is something for everyone. I’ve come to the conclusion that we cannot hope to transform stakeholders' opinions on this if we become defensive or simply denounce the criticism as having a political agenda (even if it does). Don’t get me wrong - I believe we have good reason to feel aggrieved. William Shawcross’ comments did not help us. We do have to respond, and the time for grasping this nettle is well and truly here. But the wrong response is worse than no response in winning the hearts and minds of those on whose support we rely.

Transparency is our most likely saviour, not judgement or defensiveness. Arguments that we could earn more elsewhere, though true, will never convince those for whom ‘charity’ should be synonymous with ‘voluntary’. Fortunately, we are already more transparent than many others, but we also need to help people understand what our information means. We’re not perfect. Inevitably, some people in the sector are not motivated by the calling of ‘doing good’, are ineffective, earn too much, do a terrible job, have forgotten that their charity exists to serve others (not themselves) and take volunteers for granted. However, the vast majority of people I have personally encountered are motivated by the desire to make a difference, work incredibly hard, and don't earn much in return. So, instead of responding with anger, defensiveness, or outrage, let’s pull this debate back into the realms of rationality - even if that’s less interesting for the journalists!


This post was last reviewed on 6 August 2018 at 16:05
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