Sir Stuart Etherington: Getting executive pay right 'is critical to public trust and confidence' in charities Britain is a markedly generous country when it comes to charitable donations. Our research shows that over £9 billion was given to charities last year. Although overall donation levels dipped slightly, just as other consumer spending did, it's clear to me that Britain is still very much a country which believes in giving to charity. In order that this continues, it's crucial that charities retain the trust of those who give to them. Charities are deeply careful with their money, always conscious that every pound is precious. Equally, any organisation can only cut so many costs before it finds itself in the realm of false economies and its effectiveness is reduced. These dilemmas are familiar to everyone in the charity sector. They agonise over spending on a daily basis. Will this make the biggest difference? Can we do it cheaper? And where they can, they invariably do. The modern charity sector is highly diverse. Charities range from small, local organisations to large, complex organisations. All have their place and all contribute to a stronger society, and of course their salary policies will reflect this diversity. All charities are governed by trustees. Nearly all of them are volunteers - they are not paid for their time, a feature unique to charities. But they have the tricky task of setting executive remuneration. They have to balance attracting and retaining quality staff with making the most of the charity's limited resources. They have to ensure that they can secure, in the case of many charity chief executives, someone with decades of professional experience in their area, capable of running a complex organisation effectively. Putting the right price on this expertise is not easy. Of course, there will always be someone willing to give it a go for less - but a good leader is crucial to an organisation's success. The trustees are accountable for recruiting the right person. We will create, with the Charity Commission's backing, clear guidance on the process trustees should go through in order to get their decision right. Our work will be led by a group of chairs of trustees from charities of different types and sizes, those with experience of making these decisions. I expect it will cover important matters relating to benchmarking, seeking independent advice, and being transparent. The best do this already, but it is clear that there is public concern on this matter, and all charities must focus on ensuring their processes are as strong as possible. Getting this right is critical to public trust and confidence in individual organisations and the charities as a whole. Sir Stuart Etherington is Chief Executive of the National Council for Voluntary Organisations