London, 29 March 2018 – ICSA: The Governance Institute has today released guidance for charities on trustee eligibility as part of its efforts to bolster good governance in the sector. The guidance, which is freely available to all, focuses on constitutional and legal considerations, Charity Commission waivers, disqualification, due diligence and senior manager implications.
“Charity trustees are responsible for the overall direction, strategy and vision of over 167,000 registered main charities in England and Wales and their effectiveness is central to the success of these charities. Given the large number of beneficiaries who rely on these charities, it is essential that the right people are recruited to the board, not just in terms of skills, attributes and competences, but also in ensuring an individual meets the legal and constitutional eligibility criteria. Appointing a trustee who is not eligible can have serious consequences for the individual, the board and the charity,” says Louise Thomson, Head of Policy (Not for Profit) at ICSA: The Governance.
ICSA’s advice to charities and trustees is to:
- Adopt a robust and transparent approach to recruitment, including ensuring that background checks with the Individual Insolvency Register, Disclosure and Barring Service, Companies House or Charity Commission are carried out and that prospective trustees of charities receiving gift aid meet the HMRC ‘fit and proper persons test’
- Make sure that all trustees are aware of the specific trustee disqualification criteria relating to their charity and ensure that they meet the requirements before appointment and whilst in position
- Be aware that the extended automatic disqualification regime now includes relevant senior managers within a charity such as the chief executive and chief financial officer. As paid employees, there are other factors that must be considered should such an employee be found to be disqualified
- Ensure that their charity has taken action before new limits on who can be a trustee introduced by the Charities (Protection and Social Investment) Act 2016 come into force on 1 August 2018.
“It is crucial that charities do not recruit trustees who are disqualified as this is an offence and means that the appointment will be invalid. Not only that, if problems arise with a trustee and it emerges that existing trustees failed to follow Charity Commission guidance, the Commission may consider the trustees to have acted improperly,” warns Louise.
The guidance can be downloaded for free at www.icsa.org.uk/charity-trustee-eligibility
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Notes to Editors:
- ICSA: The Governance Institute is the professional body for governance. We have members in all sectors and are required by our Royal Charter to lead ‘effective governance and efficient administration of commerce, industry and public affairs’. With over 125 years’ experience, we work with regulators and policy makers to champion high standards of governance and provide qualifications, training and guidance.
Website: www.icsa.org.uk