Part 2: When the board becomes the management
How to safely move between non-executive and executive roles in a charity without losing your independence or “NEDness”.
In the first article of this series, I argued that the charity boardroom is not a training ground or lesser version of corporate governance and is instead a distinct discipline, which provides valuable lessons to any aspiring or existing Non-Executive Director (NED). I wrote about the power of the Mission to focus and align an organisation, and the challenges of governing on behalf of stakeholders who are not always in the room.
In this article, I will cover one of the challenges with charity boards that can be hardest to manage in practice. On a company board, the distinction between executive and non-executive is reasonably well defined. On a charity board, the distinction can be far more blurry, with committee members often being asked to ‘roll their sleeves up’ and help in more practical ways. In my experience, this can create issues that a NED must be mindful of.
Why the line blurs
In the UK, around one in five charities are described as micro or small, with an income of below £100,000. 1 Often these charities, by virtue of their size, have no paid staff and a chief executive who is supported by a team small enough to fit around a kitchen table. Also, there are no functional directors waiting in the wings to provide expertise in their chosen field.
This becomes even more critical when the chief executive leaves. A well-run executive search takes time, often more than 3 months from briefing to offer. Even then, notice periods add significant lead time, so six months is a more realistic timeframe before a permanent replacement is in place. 2
Six months is a long time in any organisation, but this is even more challenging when the services you are delivering are to people who depend on them. Someone must approve the payroll, make the payments, and keep the doors open.
In a company, these gaps are often filled by internal promotion or a professional fractional interim hire paid for out of a budget that exists for these eventualities. In a small charity however, it’s often the trustees themselves that are asked to step in, given their knowledge and relationship with the charity. And because they care about the cause, they often volunteer to do so, resulting in a non-executive stepping over the board table into an executive role, usually for the best reasons and frequently within short time scales.
I have been a trustee of several charities, and I have also stepped into an interim chief executive role for the same reasons highlighted above. Running a charity was, without a doubt, the most rewarding role of my career, but it also taught me some valuable lessons around the blurring of the lines between executive and non-executive, and how quickly and invisibly your independence can drain away.
Crossing the line properly
If your charity finds itself in a position where it needs some emergency cover, the first question the committee should ask is not who should do it, but whether you are allowed to do it all as a charity and any protections required to the potential candidate before it happens. Start by reviewing the governing document, which as I covered last time, is often silent on these types of details. The normal default position is that the trustees should serve voluntarily and cannot benefit from the charity (e.g. being hired as the paid interim chief executive). This creates a challenge, but it’s not insurmountable with the right governance steps.
The Charity Commission's guidance states that paying a trustee should only happen "in exceptional circumstances and for a temporary period of time", and that the Commission authority will often be needed. It also warns, in terms that ought to focus the mind, that where the rules are not followed, the trustee who received the payment may have to repay the charity.3
The next area for the committee to tackle is the conflict of interest. The Commission’s framework documents that it is the responsibility of the trustees to identify any conflict of interest early, declare it, and consider whether it should be removed rather than managed. It’s critical that the trustees clearly document this in the charity’s records. As a minimum, the conflicted trustee must declare their interest, leave the discussion and take no part of the decision to be appointed in their interim capacity. 4 A trustee must never sit in the meeting that appoints them, set their own terms, or vote on their own remuneration, however obvious the answer may seem to everyone in the room.
Beyond this, there are four other practical considerations to think about.
Firstly, ensure you put the arrangement in writing, defining the scope and time frame, ensuring the latter is not “until we find somebody”.
Secondly, be explicit about who the interim reports to, which in practice means the chair. Without a named line manager, the interim is accountable to a board they sit on, which can mean they become accountable to no one. The chair becomes the point of escalation for decisions beyond the interim's remit, and the route staff can use to escalate that does not run through the person leading them.
Thirdly, be clear about their delegated authority and what decisions they importantly cannot make alone. This matters because an interim drawn from the board tends to assume they already have the authority which may not be the case. Writing down the reserved matters, which would usually cover anything above a set financial limit, hiring and dismissal, any commitment extending beyond the interim period, and anything touching the strategy the board has set, protects the interim as much as the charity.
Finally, agree, in advance and in writing, what happens at the end of the agreed period. The agreement should say what happens if the end date arrives without a successor, who decides whether to extend and on what basis, and whether the trustee returns to the board, returns with restrictions, or steps down altogether. Deciding that at the start, when nobody is invested in the answer, is far easier than deciding it nine months later when everybody is.
The risk nobody warns you about
This all seems reasonable, easily documented, and procedural. The real risk however, is what the minutes rarely capture. Once you have stepped over the threshold into the executive role, how do you ensure that you don’t lose the ability to see the charity objectively.
One of the biggest values of a board of NEDs is not the intimate knowledge of the business, because the executive will always know more. The real value is perspective, arriving with fresh eyes, without the baggage and being able to ask the naïve question that people inside the organisation stopped asking years ago.
If you spend six months running the charity, every one of these advantages quietly disappear. You are now the person who chose the new database, hired the people and defended decisions along with the compromises you have had to make and understand from the inside. When you return to the board, the awkward questions about that new platform you implemented becomes a question about your competencies and whether you made the right decision.
In my experience, there are three ways that your lack of objectivity and independence might manifest. The first is that you can start marking your own homework, questioning the decisions that you made, often under pressure and with imperfect information. The second is that the rest of the board starts to defer to you. You were the one that was there and so your account becomes the boards account. The third, and probably the most uncomfortable, is that you are invested. In my case I cared deeply for the role and the people that I had left behind – you want the period to have gone well, because it was yours.
In practice, the corporate world takes this risk far more seriously than the charity sector does. The UK Corporate Governance Code explains that a chief executive should not go on to become chair of the same company, and lists being an employee of the company within the last five years, as a circumstance that may impair a director's independence.5
Five years... the considered view of the listed company world is that it takes half a decade for an executive to become independent again. A charity trustee who runs the organisation for six months is typically expected to resume challenging it at the very next meeting. This is a challenge any NED that is looking to step into an interim role in order to help must face.
The most instructive corporate example of this is Patisserie Valerie. In October 2018, the company suspended its shares after discovering accounting irregularities, with the rescue including a £20m personal loan from its Chairman, Luke Johnson. The business collapsed into administration the following January.6 I make no criticism of Johnson, who I am sure was trying his best to save a business and his own reputation with it, but the governance point is clear. Once the chairman is also the company’s biggest lender and the architect of its rescue, he cannot at the same time be the independent check on how the rescue efforts are going.
This same logic applies around the charity board table. In my opinion, you cannot be both the person running (or who has run) the charity and the person independently assessing whether the charity is being run well.
Returning to the board seat
In my experience, the hardest part of the whole experience is not the stepping in to an interim executive role, but the stepping back out again. My advice is that this should be something that you carefully plan for before you begin, and you should be honest about your options, which I think are threefold.
Firstly, you can return to the board as before. This is the most frequent choice and the one that deserves the most scrutiny for all of the risks identified above around independence and objectivity. Secondly, you can return to a board seat but recuse yourself from decisions concerning your own period in the executive seat, including the new chief executive's assessment of what they inherited. This can be difficult in practice, as you will need to avoid the trap of wanting to challenge when the all-important context can be missing from a discussion related to a decision made during your interim tenure. Finally, you can conclude that you are no longer independent and stand down, which sounds dramatic, but is sometimes the cleanest and most respectful thing a trustee can do.
Whichever option you choose, I find three steps are useful to consider. Document your handover in writing, so the incoming chief executive is not reliant on your memory and your framing. Give them explicit permission to criticise what you did, and mean it, because they will find issues and will be nervous about bringing them up. And ask the board to review the interim period without you in the room, which is uncomfortable for about ten minutes but worth it. Whether the new CEO wants your support or not is also a choice for the incoming. Not being insulted if the honest answer is that they would prefer to create their own path without the outgoing CEO’s advice, however good intentioned it is.
What each sector can learn
Charity boards can learn a great deal from corporate practice when it comes to the filling of interim leadership. A clear delegated authority, setting out what the board can decide versus the executive, removes most of the ambiguity before the crisis arrives and can sometimes be missing. In my experience this is not always a clear in the third sector as it is the corporate.
When considering the costs of finding a professional interim, a charity board needs to also weigh the cost of losing an independent challenger, if thinking that appointing a trustee to the role is a "free" option. And the concept of a cooling-off period, long established in corporate governance as the required interval between an executive role and joining a board, deserves consideration in the charity boardroom too.
Finally, a point that may sound obvious: the succession plan for the chief executive should be a living, breathing document with real succession opportunities for the existing leadership and a clarity on the gaps that exist and training required for those individuals. A solid succession plan means that if the worse does happen, the charity is well prepared for what needs to happen next.
The learnings run the other way around too. Very few listed company NEDs have ever had to operate the organisation they govern. Trustees who have done it (and have come back to the boardroom well) understand deeply what a board paper costs to produce, what a delegated authority feels like from the receiving end, and how quickly an executive team notices when the board is asking for things which does not advance the charity’s mission.
This understanding makes for better-calibrated challenge and gives any NED incredibly valuable experience.
Some practical guidance
To summarise, five questions a charity board should ask before heading down the path of appointing a board member into an interim executive role
Does the governing document permit such an appointment, and if it does not, whose authority do we need?
Who will the interim executive report to, and what are they explicitly not allowed to decide alone?
What is the end date, and what triggers a review if we reach the end date without a successor?
How will the rest of the board get comfort that it is being given the full picture, when the person who normally provides that picture is now the person being assessed? Agree in advance where the information will come from instead, whether that is the treasurer seeing the numbers directly, the auditor being put on notice, or a standing item where the interim leaves the room.
And finally, the question I would put on the agenda in writing, what will we do to reinstate that trustee's independence when they come back to their board seat?
Next topic in the series: the challenges of spending donated money that is not yours. The strings that are attached that cannot be untied and the collective responsibility the board carries for its safe spend. I will unpack restricted funds, reserves and public scrutiny, and why a director who has held both a charity seat and a commercial one at the same time gets the most complete education available for any NED.
Use of AI statement
This article was written by Julia Warrander, its human author. AI was used to research background sources, to check quotations and figures against the original documents, and to compile the footnotes. It did not write the argument, the interpretation or any of the original editorial. The article was reviewed and edited by Peggy Curley, Chief Communications Officer, and approved for publication under the NEDness Editorial Policy.
Sources
1 NCVO, UK Civil Society Almanac 2024, executive summary: approximately 166,000 voluntary organisations in the UK, of which 80 per cent are micro and small with income below £100,000 (2021/22 data). NCVO – UK Civil Society Almanac 2024 ↩
2 Prospectus, "Why are more charity boards hiring an interim CEO before they've even started the permanent search?", 27 August 2026. Prospectus – Interim CEOs in charity leadership transitions ↩
3 Charity Commission for England and Wales, Charities paying a trustee or a connected person: understand the rules (CC11), "Paying a trustee for carrying out trustee duties", published 25 April 2025, updated 20 August 2026. GOV.UK – CC11: Paying a trustee for carrying out trustee duties ↩
4 Charity Commission for England and Wales, Conflicts of interest: a guide for charity trustees (CC29). GOV.UK – CC29: Conflicts of interest ↩
5 Financial Reporting Council, UK Corporate Governance Code, January 2024, Provisions 9 and 10. FRC – UK Corporate Governance Code 2024 ↩
6 Patisserie Holdings plc: shares suspended 10 October 2018 following the discovery of accounting irregularities; rescue announced 12 October 2018 including a £20 million personal loan from chairman Luke Johnson; the company entered administration on 22 January 2019. ↩