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Keeping It In The Family July 6, 2014

Posted by Audit Monkey in The Joy & Pain of Internal Audit.
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I haven’t felt like blogging of late but a recent article in ‘The Telegraph’ has rekindled my interest.  It regards the Halo Trust and the suspension of their Chief Executive.  By way of background, the Halo Trust is a charity which goes around the world clearing up landmines.  It does this by conducting surveys to identify landmines and training the locals in de-mining skills.  (I would have thought there’s an element of ‘insult to injury’ in the latter activity; you get bombed to an inch of your life and then you are invited to clear up the unexploded ordnance, thereby endangering your life again but there you go.)  The organisation rose to prominence as Diana, Princess of Wales visited a Halo project in Angola shortly before she died. The full article can be found here.

The organisation is the frame again as the Chief Executive, Guy Willoughby, who co-founded the Halo Trust, was asked to step down by the Charity’s Board. ‘Why?’ I hear you ask. In short, Mr.Willoughby received thousands of pounds from the Trust to privately educate his children, in addition to his salary of over £200,000. ‘So where’s the beef?’ What follows is a classic example of poor governance to say the very least.

Mr.Willoughby co-founded the Halo Trust. While this is very noble act, the salary seems excessive in comparison to the charity’s objectives.  Moreover, I find it unethical that someone founds a charity and then decides to remunerate one’s self through it. Presumably the Trustees authorised the salary but even so.

Mr.Willoughby’s wife was also employed by the Charity as a part-time Marketing Director and photographer. Now there’s a conflict of interest if ever I saw one and unsurprisingly it ended in tears.  When questioned about the payments for school fees, Mr.Willoughby argued that ‘as he and his wife were often overseas, someone had to look after the children’.  (No doubt many married couples with children probably ask themselves the same question every day.) I imagine Mrs.Willoughby joined Mr.Willoughby on trips to overseas projects to ‘take photos’ or to explore ‘marketing opportunities’.  The bigger question is who authorised her employment? Answer, the Trustees presumably but did they have their heads in the sand? I suspect they were presented with Mrs.Willoughby’s employment as a ‘slum dunk’, or Mr.Willoughby simply didn’t go through official channels or ‘due process’ when offering her employment.

Apparently the Trustees approved the payment of school fees but again, what planet were the Trustees on? Individuals donate to charity on the understanding that the monies will be used for humanitarian purposes, not the betterment of middle class children. In a statement the Trustees said:

“Our entire ethos as a charity is focused on efficiency and productivity to ensure that we achieve the maximum outcomes in the field and make the world a safer place. Halo’s beneficiaries and staff deserve and require a highly competent and professional management team and the board has taken the necessary steps to recruit and retain one”. See here.

Who are you trying to kid? It’s a charity, not a FTSE 100 firm.  I very much doubt the charity’s income was commensurate with that of the RNLI, Cancer Research and the like.  This is where all this corporate governance stuff breaks down. In their universe, the Trustees probably thought Mr.Willoughby was the appropriate individual.  However, it just goes to show that if Trustees accept everything on trust, don’t challenge or engage their brains, you can all the corporate governance you like but you will still get poor outcomes.


1. itmonkey101 - July 7, 2014

“The Telegraph disclosed how Mr Willoughby, 54, an Old Etonian, was receiving a financial package worth between £210,000 and £220,000 a year. The remuneration package included the cost of sending three of his children to two of Britain’s most expensive private schools – Oundle School in Northamptonshire and Queen Margaret’s School in York. His eldest child had had her boarding school fees paid as well but is now at university. ”

Charity begins at home as they say…

The article doesn’t mention the percentage of the donations that made it through to the field (so to speak), rather than the kid’s polo kits.

And this, ladies and gentlemen, is why I am wary of giving to charity. That and the fact that I’m incredibly tight 🙂

2. Audit Monkey - July 7, 2014

You can pull the accounts for all registered charities in the UK from the Charity Commission website. From memory, Halo’s UK income was £26m of which £12m-£14m was spent on salaries. The confusing part is how much was spent on staff in the field who were engaged in mine clearing activities. The other ‘problem’ with Halo is the charity is domiciled in the US and outside of the Charity Commission’s reach.

Digressing, this was the big problem with the charity founded in Roy Castle’s memory. The Charity Director was flying around the world in First Class on projects to promote Roy’s legacy. Roy’s widow assumed the Director was funding the travel from her own funds. Wrong; it was being charged back to the Charity. Sweet.

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