London, 7 October 2021 – The Chartered Governance Institute UK & Ireland has today published new guidance for the remuneration committees of charities registered in England and Wales. The guidance will be useful to any charities seeking to strengthen their governance arrangements in line with key aspects of the Charities Statement of Recommended Practice and the Charity Governance Code.
Louise Thomson, Head of Policy (Not for Profit) at the Institute says:
“The issue of executive pay in the charity sector and other parts of the economy is a perennial issue and one that attracts the attention of the media and sector commentators alike. This is particularly true now given the detrimental financial impact of the COVID-19 pandemic on society. While there has always been the expectation that charities should be transparent about how they spend their resources, the requirement for decisions about levels of executive pay to follow a robust evidence-based process and be reasonable and defensible has never been higher.
“It is worrying, therefore, that a recent survey by ACEVO found that 49% of charity leaders reported having no formal salary review on a regular basis. Remuneration committees have a critical role to play in balancing the interests of donors and other stakeholders with the need to attract senior leaders who will be effective in using a charity’s resources to deliver the charity’s stated purposes to those communities it is set up to serve. These model terms of reference will allow remuneration committees to provide the evidence necessary to allow trustees to make informed decisions about the pay and benefits for senior staff, thereby helping them to attract and retain appropriately-qualified staff.”
The model terms of reference offer guidance about the following:
The guidance can be downloaded for free at www.cgi.org.uk/charityremcom
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Notes to Editors: