It's sad to hear that the RSPCA have been given an Official Warning by the Charity Commission for a poor negotiation conducted by its trustees. The negotiation, which related to a settlement payment for a former Chief Executive, was criticised both for the lack of information the trustees gathered before making the deal, and for a lack of care and skill during the negotiation.
As a trustee of a charity and a negotiation consultant, I have a lot of sympathy with the trustees. In sitting on a charity board, there can be a tendency to be risk-adverse and the strategy of getting to a settlement with a potential litigant is sensible.
At the same time, of course, you are dealing with charity money and it is a fundamental duty of a trustee that they are not mis-spending these funds or acting against the Charity's best interests.
So, what would be advisable here?
Firstly, trustees should never pretend to have expertise they do not have. Negotiating is a skill and trustees need to feel confident before doing it. If they do not know how to negotiate, they should delay the negotiations in order to become competent.
Secondly, get training. The trustees collectively could get training in how to negotiate, in the same way that you can do trustee training about governance or finances. Negotiation training, such as CEDR's would set out a clear process, let trustees know how to plan for a negotiation, explore options, bargain effectively and work with numbers.
Thirdly, plan, plan, plan. Before entering into a negotiation, explore options and work out what you need to know to make a deal. They need to consult with stakeholders (for example, the charity commission) and conduct risk analyses, and strategies.
Fourthly, be prepared for a conversation. If a board of trustees comes up with an offer on its own to present to the Chief Executive, it is effectively negotiating with itself. This is not effective. Rather, the board needs to work out how it is going to negotiate with the Chief Executive and start a conversation.
Finally, consider engaging a facilitator or mediator. In complex negotiations with multiple people, it can be helpful to engage a facilitator who can take the lead on process, allowing the trustees to focus on what they want to achieve and what offers to make.
Negotiating challenging - and when you're not getting paid as a trustee it may seem more onerous still. However, the importance of getting it right is critical. You need to have more than the best of intentions.
If you are a Charity and are interested in training in negotiation, or finding out more, please contact me at email@example.com.
Frederick is a Negotiation Consultant and Manager of the CEDR Foundation responsible for CEDR's flagship negotiation training and the not-for-profit arm of the organisation. To speak to Frederick or any member of the CEDR Skills Team about how we can help, email firstname.lastname@example.org or call 0207 536 6070.
The RSPCA has been given an official warning by the charity watchdog for reportedly awarding a former chief executive a six-figure pay-off. [...] The Charity Commission criticised RSPCA trustees for not ensuring the decision was made properly, "particularly given the large sum of money involved". Trustees had "failed to act with reasonable care and skill" when negotiating the sum, the watchdog said. An official warning, which did not name Mr Ward or include details of his pay-off, said the failings amounted to "mismanagement in the administration of the charity".