International Journal of Leadership in Public Services

Value-based Leadership: A Third Sector View

Astrid Kirchner
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Astrid Kirchner, (2006),"Value-based Leadership: A Third Sector View", International Journal of Leadership in Public
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 Value-based Leadership: A Third Sector View
perspectives on leadership

Astrid Kirchner
Head of Professional Development, acevo

Abstract
If the third sector leadership style is to become the model for other sectors then the third sector needs to raise its game
to fulfil this evolving role. As a whole the sector is taking leadership and leadership development more seriously, however,
in order to raise the bar the sector needs to be seen to:
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• invest more in development

• ensure effective recruitment and succession planning
• provide robust governance.

The Association for Chief Executives of Voluntary Organisations (Acevo) as an organisation is campaigning for greater
professionalism and stronger leadership for the sector.

Key words
values; third sector; leadership; acevo

The attractiveness of the third Acevo’s 2006/7 remuneration survey (acevo, 2006)
sector – filling the value gap highlighted that 31.2% of the sector’s CEOs came
from the private sector and over 50% from various
n the August 2006 edition of Management public sector categories. The main reasons given

I Today, Richard Reeves talked about growing

research interest into ‘meaning at work’ – and
apparently according to the same article, ‘a desire
for wanting to work in the third sector were ‘interest
in a specific job’ and ‘making a difference’, both
pointing towards the importance of meaning at
to find a job with more meaning is a more work. Having a deep emotional affinity to the work
common cause for exit than the pursuit of a fatter of the organisation is another reason for choosing
pay packet’. This is one explanation as to why the the sector (Cormack & Stanton, 2003).
third sector is increasingly becoming a career
choice, particularly for senior executives from Whilst it is obviously great for the sector to be seen
outside the sector. This might also explain why as an attractive place to work, it also highlights a
41.1% of those entering the sector from either the much more serious issue: that of the chronic under-
public or private sector are prepared to take a investment in leadership and development leading
pay-cut to do so (acevo, 2006). to the sector not being able to fill its own top jobs.
In order to raise its game the sector needs to:

The British Journal of Leadership in Public Services

30 Volume 2 Issue 4 December 2006 © Pavilion Journals (Brighton) Ltd
 Value-based Leadership: A Third Sector View

• invest more in development sector, compared to other sectors, is derived by the

• ensure effective recruitment and succession enthusiasm for the cause of the organisation and
planning the values it is seeking to promote. Apart from

perspectives on leadership
• provide robust governance. leading an effective organisation, chief executives
of third sector organisations also need to effectively
The latter two being symptoms of the first. manage the ‘passions’ of their employees, which
may be challenging at times.
The third sector leadership
Overall, however, the third sector’s strength lies in
model its independence, drive, freedom and flexibility.
The third sector is characterised in the widest sense Passion, commitment and strong emotional
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by its desire to promote social change and to act attachment to the cause of an organisation is often
where the public and the private sector fail to reach. what sets third sector leadership apart from other
The term ‘third sector’ encompasses a sector of sectors (Cormack & Stanton, 2003).
considerable diversity and CEO roles within the
sector vary accordingly (Cormack & Stanton, 2003). A third sector view on
Characteristics for the sector may briefly be
separated into external and internal factors.
professionalism
Acevo, the Association for Chief Executives of
External Voluntary Organisations, is the only professional
The third sector can be described to have the body in the sector dedicated to inspire, connect
flexibility of the private sector compared to the and develop third sector CEOs. Over the last 20
public sector, but does not have the resources of years, acevo has campaigned for increased
either of the other sectors. Furthermore, the third professionalism of the sector, by building strategic
sector often operates in an uncertain external alliances with world class business schools (CASS
environment, dependent on policy developments, Business School, Ashridge, Cranfield and Institute
the political and economic climate, funding of Directors (IoD)) to provide training, support and
circumstances and prevalent cultural/societal continued CPD to the sector’s CEOs.
values (ie. international NGO’s often intervene in
areas of unstable and difficult political situations). Acevo’s first qualification for third sector chief
executives, accredited by the Institute of Directors,
Internal was launched in 2004. Acevo now offers a structured
As outlined above the arena within which third approach to professional development for the CEO
sector chief executives operate is complex, fast depending on where they are on their career stage.
changing and often uncertain. The skills needed to
run a not-for-profit organisation are effectively wide- In 2005, acevo launched its manifesto for a
ranging and multifaceted, however, with fiscal modern and enterprising third sector – calling on
resources often directed to deliver on external the sector to be:
goals, financial resources within organisations for
training and development are limited. Also, staff • professional and passionate
motivation (paid and voluntary) within the third • well-led

The British Journal of Leadership in Public Services

Volume 2 Issue 4 December 2006 © Pavilion Journals (Brighton) Ltd
31
 Value-based Leadership: A Third Sector View

• well-governed accessing training is time (52.4%), followed by

• innovative and enterprising. money (20.5%) (acevo, 2006).
perspectives on leadership

2005 also saw the establishment of a third sector For a modern and enterprising organisation,
leadership centre, which officially launched in 2006. however, leadership skills are essential.
Unfortunately throughout the history of the sector
Acevo’s 20th anniversary year, 2007, will be marked investment in these skills has suffered from
by a celebration of the uniqueness of third sector chronic under-spend and low prioritisation. This
leadership and will see an in-depth examination and culture has already led to a lack of demand for and
exposure of the skills required by a chief executive supply of, high-level training and development to
of a successful not-for-profit organisation – local, address the needs of people operating in a very
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regional, national or international. complex environment. The resulting skills gaps in

organisations cause underperformance – see
Professionalism has long been a guilty secret of the Figure 1 (Aldridge N & Kirchner A, 2006).
third sector and an ambivalent attitude towards
training and professional development prevails. Symptoms of under-investment
Allocated training budgets for third sector leaders
at the best of times is 1% of turnover, compared to Succession planning
3% in the public and private sectors (Cormack & This issue of under-investment and under-
Stanton, 2003), and even that 1% is often not fully performance is further highlighted by the lack of
spent. The main barrier identified for people career development and succession planning

Figure 1: The third sector: heading for a skills deficit? (Aldridge & Kirchner, 2006)

Low supply of and demand Ambivalent attitude towards

for continuous professional CPD amongst third sector
development (CPD) organisations and funders

Lack of investment in CPD

for staff and volunteers

Skills gap and

leadership deficit

Underperformance

The British Journal of Leadership in Public Services

32 Volume 2 Issue 4 December 2006 © Pavilion Journals (Brighton) Ltd
 Value-based Leadership: A Third Sector View

found in the sector. 74% of CEOs stated that they sector’s Code of Governance. As Bubb (2006)
do not have a succession plan in place for their argues, this is not exactly a clear advertisement for
senior management team. Even if inappropriate for the sector’s accountability arrangements.

perspectives on leadership
CEOs who were not thinking of moving anywhere,
71% of CEOs surveyed have said that they have no Summary
natural successor within their organisation. Is it
surprising then that over 80% of the sector’s CEOs As the third sector is increasingly becoming a
are from either the public or private sector and that career choice, the sector needs to become more
only 16.3% of the sector’s CEOs have actually focused on professionalism and raise its leadership
always worked in the third sector? (acevo, 2006). game. Not least to be able to develop and prepare
the sector’s existing talents for top jobs within and
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Governance outside the sector.

The sector shows a significant lack of diversity on
their boards with the following shocking statistics: Furthermore, organisations need to demonstrate
94% of trustees are white, 64% are 55 and older and genuine accountability through sound governance,
only 30% are women. Throughout the sector there is and by developing its their own capacity to deliver,
a significant lack of appraisal system for board or without compromising the independence, drive,
chair appraisal, an issue that acevo is currently freedom and flexibility that characterise the sector.
addressing. On a good note, however, over 63% of
the sector’s CEOs are board members or trustees of Address for correspondence
other organisations. How far this extends to other Astrid Kirchner
sectors, however, is unknown (acevo, 2006). Head of Professional Development and Training
Association of Chief Executives of Voluntary
Implications for public service Organisations (acevo)
1 New Oxford Street
delivery London WC1A 1NU
‘At their best third sector organisations
have compelling advantages in public Tel: 0845 345 8497
service provision. They focus on Email: [email protected]
service users not institutions, they put
user involvement ahead of staff References
interest and have the flexibility to Acevo (2006) Raising Our Game acevo 2006/07 pay survey.
London: acevo.
innovate, promote change and work
across government silos’ (Bubb, 2006). Aldridge N & Kirchner A (2006) Double devolution – How to put
amateurs in charge. In: Craig J (ed) Production Values
(p132–144). London: Demos.
Currently, however, the sector faces particular
Bubb S (2006) Choice and Voice – The Unique Role of the Third
challenges around funding, contracts and Sector. London: acevo.
commissioning. Furthermore, compared to the
Cormack J & Stanton M (2003) Passionate Leadership. The Hay
public sector, governance structures and Group Management Limited.
arrangements for transparency are underdeveloped
Reeves R (2006) Management Today August.
– with only 35% of chairs being familiar with the

The British Journal of Leadership in Public Services

Volume 2 Issue 4 December 2006 © Pavilion Journals (Brighton) Ltd
33