Pay and Equalities 2021 report: risk of complacency on key governance issues

The 2021 Pay and Equalities Survey attracted over 1,000 respondents, the largest sample size since the survey began. In the wake of the Covid-19 pandemic and its impacts on the sector there are some warning signs in the data that usage of some key governance tools has reduced.

This includes 49% of CEOs reporting having no formal salary review on a regular basis, a steep increase on the 39% figure from 2020 and a return to the levels seen in 2018 and previous years. The number of CEOs holding an up-to-date job description has dropped from the encouraging lift to 75% in 2020, down to 69% in 2021. Those with a current statement of delegated authorities dropped to 45% in 2021 from 47% in 2020, while less than a fifth of CEOs (17%) have personal development plans. As the sector builds back better, it is more vital than ever that boards provide robust professional frameworks to support leaders.

The 2021 survey shows that 60% of respondents feel their board prioritises their wellbeing, an encouraging increase on 54% last year. More than eight in 10 CEOs would recommend a career in the sector, but there remains a need for stronger career support in some areas; just half of charity leaders are satisfied with chair/board support for the investment of time or resources in their learning and development.

The median CEO salary in 2021 was £58,000, up from £55,993 in 2020, but England-based CEOs were less likely to have received a pay rise than CEOs based in Scotland or Northern Ireland. However, it is encouraging to notice that 88% of respondents did not need to take a pay cut as a result of the pandemic, and it is also positive that the overall pay gap between male and female CEO respondents continues to fall: at 7.6% in 2021, down from 12.1% in 2020 and 13.8% in 2018.

Awareness of diversity, inclusion and representation continues to rise among CEOs, but this does not correspond to them feeling satisfied with the composition of their boards. 43% of respondents stated that they planned to address ethnic diversity on their boards within the next year while just 25% of respondents were happy with the ethnic diversity of their boards. While leaders are continuing to identify the lack of diversity, equity and inclusion as a sector-wide issue, more ambitious action is needed quickly to see a marked change in representation in charities.

Vicky Browning, CEO, ACEVO said: “The last year presented numerous challenges for charities and their leaders, so it is encouraging to see that satisfaction levels remain high,  that most CEOs did not need to take a pay cut as a result of the pandemic, and that 75% of respondents still expect to be working in the sector in five years’ time.

“We were encouraged in 2020 to see an increase in the prevalence of regular salary reviews and up to date job descriptions; however, this year’s data shows a drop in these figures which is a cause for concern. While the challenges faced by the sector as it recovers from Covid-19 are significant, organisations will only be able to build back better if boards keep the focus on these key governance processes which allow leaders to make the biggest possible difference. Prioritising CEO wellbeing and professional/personal development is hugely important to ensure that the communities and causes charities work with and for continue to access the best possible service.”

Sarasin & Partners LLP is delighted to sponsor this year’s survey. As specialists in charity investment management we recognise the enormous challenges that have faced charities and their leaders over the past year. Whilst we can see some areas of progress in the data from this survey, many of the results resonate with our own industry. We recognise the urgency and need to improve diversity and inclusion in our own firm as well as the businesses in which we invest. To build back better we must ensure we hold onto the lessons learned and improved working practices that have emerged from the pandemic.

Find out more at www.acevo.org.uk or by emailing info@acevo.org.uk.