“In their own words”…Context matters – not for profit

In the following extract from the ICAS research publication “Speak up? Listen up? Whistleblow? In their own words – Insights into the ethical dilemmas of ICAS members” we hear from ICAS members about their real-life experiences of ethical challenges, “In their own words”.

"My life would have been far, far easier if I had never done anything because I wouldn’t have had the conflict, I wouldn’t have had the internal turmoil – but I would never have been able to live with myself." (Extract from interview with Morven)

6.3 Not for profit

5% of ICAS member work in the not-for-profit sector (FRC, 2018). In this section, the views of interviewees working in a wide range of organisations spanning the public sector, charities and government agencies are reviewed.

As included in Section 6.3, Robert had seen a number of issues at his whistleblowing charity relating to small firms. In his experience, small charities often had similar issues:

"Small charities as well tend to have the same sort of similar tensions where you have trustees who may have been family trustees, that kind of thing, the same sort of tension where they don’t understand why they can’t act in a certain way. Whereas in a larger organisation there are more levers that you might be able to pull."

Claire’s experiences of working in the public sector had left her with a negative impression because of the power relationships involved – “it’s the personal corruption of abuse of power, so, it’s not financial corruption per se” - and, in her view, people working in finance jobs in local authorities have “a tough job”:

"Perversely, I know this is a bit controversial, I find that the public sector has poorer morals than the business sector. And people would think it must be the other way around and I actually believe in the public sector, I believe there’s certain goods best delivered collegiately, utilities and things like that. But that whole slippery slope about small things, about power, because in local government and in the nature of politics, you have got this whole problem about power and the use of power. And you get tiny things which happen and it’s actually very, very hard to maintain your ethical position."

In Diane’s case, she felt that her not-for-profit organisation had a very healthy culture, where people “are able to have an open conversation” and “are communicating all the time”. In fact, this culture is one of the reasons she enjoys working there as the culture is “unique” and “one of the reasons why I think it is so great”. Nonetheless, there can be challenges that are not dissimilar to those faced by private sector organisations. She describes pressures to recognise revenue, grow targets and capitalise items rather than expense them. She has also experienced an issue where she has some concerns that there may be pressure to use some funds in ways that she does not feel align with the stated values of the not-for-profit organisation. She described her discomfort because she feels that, given the nature of the organisation, she has a “stewardship, guardianship sort of role”:

"I feel really uncomfortable about that and I have spoken to my CEO about it and he knows how I feel about it. But I suppose the reason I feel uncomfortable is probably the ethical dilemma I feel that is not the best use of the funds in line with the organisation’s objectives."

Funding issues had also concerned Sam. At an earlier point in his career, Sam worked for a publicly-funded organisation in a heavily unionised environment where there were continual funding pressures. This made for a challenging work environment which he dealt with by being transparent and ensuring that no information was hidden.

Matthew had worked on an interim basis at a number of organisations in the health sector and health trusts and, as Jill had found in the large private sector multinational where she worked, there were a variety of differing subcultures. He said that the differing cultures “was a function of the individuals within the trust” because “governance standards are totally dependent on the personality and standards of the individual”:

"So, when people say, ‘Is the NHS good or bad?’ They use the singular, I strongly believe I would put an ‘s’, the first thing I would do would put an ‘s’ on it. Because it is actually a multitude of trusts and bodies with different standards."

Calum works for a quasi-governmental organisation that advises on business deals and start-ups. He recounted an example where he had been advising a management buy-out and had been attending a board meeting in an observer capacity. He had asked some questions about a set of accounts that gave him “a bad feeling” (the “smell test”, as he put it). He was told “not to worry” and even “the bank were embarrassed by it so told me to shut up”. It transpired that Calum had been right in his concerns as the firm was found to have suffered a £3m fraud. Calum did not frame this as speaking up – he viewed the situation as straightforward – “solve it today so tomorrow you won’t have a problem”.

A number of interviewees had experience of working in non-executive positions after their full-time career had come to an end. Ethan is involved with some charities which “play a great role in society” but he notes that “they are under great pressure to cut costs or not be funded, if you follow, but still provide the same services”. In such a context, he regards diversity around the board table in terms of experience of different sectors and disciplines as being “critical” from an ethics point of view.

Logan had an advisory, non-executive type position at a charity whose primary function he regards as being extremely beneficial, hence his desire to get involved. Having becoming aware of concerns about improper use of funds and conflicts of interest that were not being disclosed, he approached the relevant regulator as described in Section 5.3. He had become very disillusioned with the organisation as, in contrast to the supportive culture he had experienced as a partner in a large accountancy firm, he describes the culture in the not-for-profit organisation as “about the blame game”.

In a series of extracts from the research hear from ICAS members about the real-life situations they have faced -  “In their own words”.

Hear more about the key findings from the author of the research Catriona Paisey, Professor of Accounting, University of Glasgow

Hear more about the key recommendations from the author of the research Catriona Paisey, Professor of Accounting, University of Glasgow

Hear from Norman Murray, Past President of ICAS and Past Chair of the ICAS Ethics Board

Hear from James Barbour, ICAS Director, Policy Leadership