[Ngo-lwg] Angelina Jolie Leaves Halo Trust over Board Members Paid for “Work”

Chuck Searcy chuckusvn at gmail.com
Thu Sep 3 17:18:27 BST 2015


I have sent the article below to the NGO Landmines Working Group only,
since the Halo Trust is primarily a mine action organization. However the
criticisms leveled by Angelina Jolie and this editorial comment by Rick
Cohen could equally apply to problems of governance and improprieties of
board members that may be found among NGOs working in any sector.

I suggest that the NGO Resource Center staff forward this to all working
groups, or to the entire NGO RC membership, whichever is easier.

CHUCK SEARCY

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*CHUCK SEARCY*
*International Advisor, Project RENEW*
*Vice President, Veterans For Peace  Chapter 160*
*Co-Chair, NGO Agent Orange Working Group*
*71 Trần Quốc Toản, Hà Nội, Việt Nam*

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Angelina Jolie Leaves Halo Trust
over Board Members Paid for “Work”By RICK COHEN
<http://nonprofitquarterly.org/author/rcohen51/>
September 2, 2015
[image: Angelina-Jolie]
<https://nonprofitquarterly.org/files/2015/09/Angelina-Jolie.jpg>*Angelina
Jolie calling for an end to rape as a weapon of war / UK Department for
International Development <https://www.flickr.com/photos/dfid/>*

Congratulations to Angelina Jolie for demonstrating an awareness of trustee
propriety that unfortunately seems to escape too many others. Jolie quit
the board of the Halo Trust
<http://www.dailymail.co.uk/news/article-3219384/Angelina-Jolie-quit-Princess-Diana-clearing-charity-row-trustees-paying-500-day.html>,
a charity that clears land mines from war zones, in protest of two other
trustees being paid as much as £500 a day for a total of £122,750, to
conduct a review of the charity’s governance, compensation, and structure.
They also received payment for other costs on top of their £500/day
remuneration. She also protested the practice of the charity to pay for the
school fees of the children of selected staff.

The Halo Trust responded to the criticism reflected in Jolie’s resignation
that the board had voted to authorize the organizational review, paid the
trustees for “carrying out this work and running the organization,” and got
approval for the arrangement from the UK’s Charity Commission. In other
words, the deal seems to have escaped falling into illegality. It doesn’t
appear that other trustees of the charity, such as Cindy McCain, wife of
Senator John McCain, were as nonplussed with the trustee payments as Jolie.

Good for Angelina Jolie!

The notion of board members being paid for work to benefit the charity they
are charged with governing is troubling. Was the board likely to tell the
two trustees—one of whom, Amanda Pullinger, a former hedge fund manager,
was the chair—that this plan might have been inappropriate? Assume that
Pullinger and the other paid trustee, Simon Conway, recused themselves from
the vote to authorize their remuneration. Does anyone think that the board
wouldn’t have nonetheless been influenced by knowing that payments to two
of their peers would be nixed if they were to vote against the deal? If
board members are being paid, what kind of due diligence and oversight of
their work is likely to be conducted about the quality of their product? It
would seem that the Pullinger-led review of the Halo Trust’s human
resources, financial planning, organizational structure, and compensation
practices apparently didn’t take a critical eye to compensation of trustees.

Don’t take this story lightly. It takes a special kind of integrity, even
for a major Hollywood star like Jolie, to walk away from a nonprofit board
because of practices that inappropriately benefit one’s peer trustees or
other insiders, even if they are legal—particularly because the practice of
self-dealing in charity may be more common than one might suspect. Although
the study is a bit dated, Francie Ostrower’s 2007 study of nonprofit
governance was truly shocking with its revelations of financial
transactions in nonprofits involving board members, and we suspect that
practices haven’t radically changed in the interim. Consider this striking
finding from Ostrower’s report
<http://www.urban.org/sites/default/files/alfresco/publication-pdfs/411479-Nonprofit-Governance-in-the-United-States.PDF>
:

According to respondents’ self-reports, financial transactions between
organizations and board members are extensive, particularly among large
nonprofits. Overall, 21 percent of nonprofits reported buying or renting
goods, services, or property from a board member or affiliated company
during the previous two years. Among nonprofits with more than $10 million
in annual expenses, however, the figure climbs to more than 41 percent.
Note, however, that among those nonprofits that say they did not engage in
transactions with board members or affiliated companies, fully 75 percent
also say they do not require board members to disclose their financial
interests in entities doing business with the organization, and thus,
respondents may have been unaware of transactions that do exist. According
to respondent reports, among nonprofits engaged in financial transactions,
most obtained goods at market value (74 percent), but a majority (51
percent) did report that they obtained goods below market cost. Under 2
percent reported paying above market cost.


We would guess that among those U.S. charities, there were board members
who might have been uncomfortable with paying their board colleagues for
functions that might have been more fairly purchased from outside vendors
and sometimes at less cost. One wonders whether the £500 a day paid to
Pullinger and Conway was far enough below market value to justify the
arrangement; we doubt it. Jolie appears to have thought that if the charity
wanted to call for a review of its operations, the trustees could have paid
it from their own pockets. Even then, however, having just two trustees
conduct their own review could mean that the board might have some
difficulty in giving the report an unbiased review. Jolie’s action is a
reminder to Pullinger, Conway, and all other charity board members that
their first and foremost function in a charity is to oversee and govern its
operations, not to confuse themselves for staff or vendors.

The Halo Trust was a favored charity of the late Princess Diana and an
occasional venue of charitable activity for her son, Prince Harry. For us,
it is now a favorite for a different reason, a case study of a board which
paid selected trustees handsomely for certain tasks, but where one trustee
found the practice unseemly enough to warrant her dropping off the board.
Our admiration for Angelina Jolie, already an activist in the humanitarian
sphere, has just risen several notches more.—Rick Cohen


[image: Rick Cohen]

*ABOUT RICK COHEN <http://nonprofitquarterly.org/author/rcohen51/>*

Rick joined NPQ in 2006, after almost eight years as the executive director
of the National Committee for Responsive Philanthropy (NCRP). Before that
he played various roles as a community worker and advisor to others doing
community work. He has also worked in government. Cohen pursues
investigative and analytical articles, advocates for increased
philanthropic giving and access for disenfranchised constituencies, and
promotes increased philanthropic and nonprofit accountability.




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