This post is also available in: Japanese
Japanese businesspeople often tell me how prominent the charitable sector seems to be in the UK compared to Japan. They often receive requests from employees to sponsor them on a fund raising run, or see many charity shops lining British high streets. Half of the £50.6bn annual income of charities in the UK is derived from individual donations, and the rest is from sources such as government funding, the state-run National Lottery and the private sector.
Earlier this year I became a trustee of two charities – the Japan Society of the UK and also of a charity local to the city I live in which helps refugees, asylum seekers and other immigrants to integrate into British society. Both charities are also “incorporated” so I am both a director, accountable to Companies House and a trustee, accountable to the Charities Commission.
Trustees of charities and directors of companies in the UK have similar duties, arising from their obligation to safeguard the money from donors or from shareholders. They must ensure that the charity or company complies with regulations, that the charity or company acts in accordance with the charitable purpose or strategy they have committed to and that relevant risks are recognised and dealt with.
At the workshop I attended to understand my duties as a trustee, the trainer confirmed my impression that the UK’s charitable sector is much larger not only than Japan’s but also than other European countries’ and the US’s. In other European countries the state looks after its citizens more, whereas in the USA the individual has to be more self-reliant. The regulation of trustees in the UK dates back to the 17th century, when the gap between what the state would support and what individuals would provide in the UK was filled by charities, often church based. Some of these charities were, however, seen as corrupt or of very little benefit and were not trusted. So citizens were appointed as “trustees” to make sure that the charity was acting in the public interest.
The trainer pointed out another difference between the USA and the UK, which may be of interest to Japanese businesspeople familiar with both cultures. In the US, the ends are all that count – so long as the targets of the charity are met, there is less concern about how that target was reached, or where the donor money is coming from. This is the same in American business life – you have to obey the law, but the morality of what you do otherwise in your business is up to you.
In the UK however, trustees and directors are meant to be concerned about the means as well as the ends. You are judged in court not just on whether or not you broke a law, but by whether your behaviour was “reasonable”. So long as you made sufficient efforts to do the right thing, a mistake, an oversight or a failure to reach a goal is forgiven.
This article was originally published in Japanese in the Teikoku Databank News on 9th October 2019
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