Helping groups understand who is responsible for what
There are key roles which must be filled for an organisation or small group to run.
Whether or not your organisation intends to have a membership may affect your choice of legal structure. There is only one legal structure that does not have a membership and that is a charitable trust
The main confusions that may arise with membership are:
Failure to maintain an up to date membership register.
The difference between the role of members and that of the trustees (who may also be members!)
Are members an asset or a liability?
Voting procedures at AGMs
Disputes between members and committees
The Charity Commission guidance addresses these issues and provides comprehensive coverage of the advantages and disadvantages of membership organisations as well as governance advice, and best practice.
The word “board” in modern language means the organisation’s governing body. It is the body which has overall responsibility for the organisation.
To be a charity trustee and company director you have to be eligible. The requirements that must be met by people who wish to serve on management committees, trustee boards or company boards are explained below, along with an outline of the responsibilities that go with the roles.
Who can sit on a board
The content that follows has been kindly provided by Bev Cross, Legal Consultant for Voluntary Action Sheffield.
Under charity law, a person must be aged 18 or over to serve as a trustee of an unincorporated charity, but can be aged 16 or over if the charity is also a limited company, provided there are certain safeguards in place: see the Charity Commission’s guidance on involving young people in running charities:
Under both charity and company law, a person is disqualified from acting as a company director or a charity trustee if he/she:
is an undischarged bankrupt or
is subject to an order for composition or arrangement with her/his creditors under the Insolvency Act 1986 and the order has not yet been discharged.
Under charity law, a person who is subject to an Insolvency Act Order for failing to make payments under an administration order is also disqualified, unless s/he has been specifically cleared to be a trustee by the Court that made the Order.
Please note: An undischarged bankrupt who acts as a company director knowing s/he is disqualified can be made personally liable for the company’s debts.
Under both charity and company law, a person is disqualified from being a company director or charity trustee if s/he has been convicted of a criminal offence involving dishonesty or deception which has not been spent under the Rehabilitation of Offenders Act 1974. NB: If the sentence on conviction for the offence was imprisonment (even if suspended) for 2½ years or more, then that person is disqualified for life.
Company directors or charity trustees who have been removed as directors or trustees by the High Court or the Charity Commission are disqualified from acting as directors or trustees.
Company Directors Disqualification Act 1986
Company directors cannot act as directors or charity trustees while disqualified by the Court under this Act. Directors can be disqualified for:
general misconduct i.e. persistently failing to file accounts and returns
conviction on indictment in relation to the formation. management or liquidation of a company
fraudulent trading resulting in the winding up of a company
unfitness to manage i.e. being involved in an insolvent company that has since wound up
because the Court declares the person unfit for other reasons
Company directors who serve while disqualified may be fined and required to pay back any to the company any expenses or salary received while they were directors. If they serve knowing they are disqualified, they may become personally liable for all the company’s debts.
The Chair’s Role
There are no specific legal responsibilities for the chair other than those that apply to directors and trustees generally. There may be additional responsibilities for the role that are contained in the governing document.
Chairs of third sector organisations are advised to join the Association of Chairs; this organisation supports chairs to lead their boards effectively. The association offers a peer network; seminars; resources; research; a voice for chairs and an e-newsletter.
Important qualities for the chair are:
- Commitment to the charity’s purposes
- Independent judgement
- Creative thinking
- Leadership skills
- Decision making abilities
- Fair minded
- Diplomatic and tactful
- Oral communication skills
- Respects confidentialities
- Inspires trust
- Team player
The job of the Chair is to….
- Ensure that the charity complies with the governing document and with the law
- Ensure that the charity only works within its objects
- Provide strategic direction and leadership
- Line manage the Chief Executive (if you have one)
- Ensure the board functions well
- Plan the annual cycle of board meetings (usually with secretary)
- Prepare the agenda for the board meetings with the secretary
- Chair board meetings, the annual general meeting and any other meetings of the charity
- Represent the charity and speak on its behalf
- Have an overview of the charity and its work
- Support and encourage trustees
- Ensure decisions are implemented
- Understand the roles of the secretary and treasurer
The chair is responsible for the conduct and many other elements of a meetings, but not the decisions.
The chair must make sure that the business of a meeting is completed, and help trustees to work together so that they leave the meeting feeling that something has been achieved.
Before a meeting the chair should…
- Check that the actions from previous meeting have been progressed
- Prepare the agenda (with the secretary if applicable) by prioritise agenda items and allocate time for each item
- Be clear about the purpose of the meeting, the possible implications of each agenda item, and what decisions have to be made
- Make sure that everyone has the relevant information well before the date of the meeting – send out the proposed agenda and background information in advance and in accordance with the requirements contained in the governing document. Those who cannot attend will have time to feed their views about important decisions to the chair
At a meeting the chair should…
- Have a copy of the charity’s governing document
- Ensure that the chair and secretary sit side by side
- Arrive in plenty time and start the meeting on time and clock-watch thereafter -the meeting should begin and end on time
- Ensure that a quorum is present before the business begins
- Make sure introductions are made and set the tone of being friendly but business like
- Ensure that trustees understand the structure of the meeting, as well as what is being discussed and why, explain points and items where necessary
- Ensure that all members know exactly what they are voting for or against and what has been decided
- Be prepared to alter the order of the agenda, or how an item is handled, if the trustees so wish
- Regularly sum up what has been decided and check that everyone is in agreement
- Ask a trustee to clarify what they are saying if other people do not appear to understand
- Discourage separate discussions by small groups within the meeting
- Discourage dominant trustees from taking over
- Make sure everyone has the chance to speak
- Encourage the expression of ideas and discussions, but try to prevent conflict
- Try to end on a positive note
In meetings the chair should be able to:
- Listen dispassionately; if you need to express an opinion – make it clear that you are doing so and then resume independent chairing
- Clarify, explain, lead, control and summarise
- Involve trustees, and give everyone a chance to contribute
- Maintain a balance between getting the business done and making sure trustees’ needs are met (how is everyone feeling?)
- Be patient – it takes time before people really start working together in a productive way
- Be objective, unbiased, and formal when appropriate
- Avoid speaking too much and make an effort to draw out anyone who hasn’t said much
- Delegate tasks fairly
After a meeting
- The chair should think about the meeting and how any improvements could be made for next time
- Minutes should be sent out promptly, this is usually the task of the secretary
The chair of a registered charity is not the person who does everything, but is the person who makes sure that things get done! All decisions are taken collectively.