Charity update – Trustee disqualifications
Charities have less than two weeks until the disqualification provision of The Charities (Protection and Social Investments) Act 2016 takes effect.
Since the Act received Royal Assent back in March 2016, various provisions have been implemented (raising standards in fundraising, for example). From 1 August, the one relating to automatic disqualification of Trustees and Senior Managers will also apply.
While the sector, via the Charity Commission, already had disqualification provisions, these new requirements are far more extensive in nature and could have significant potential ramifications for your charity:
- Those individuals who have unspent convictions for offences of dishonesty or deception, declared bankrupt or disqualified from being a company director are already automatically disqualified as charity trustees
- A new wide range of unspent convictions will be added to this automatic disqualification, including:
- terrorism, money laundering and bribery
- perverting the course of justice
- breaching Charity Commission orders relating to finances or property
- attempting, aiding or abetting any of the above offences.
- The provisions extend all of the above unspent convictions to not only trustees, but also “senior management” – a definition is provided in the Act which outlines those employees who are management and/or have control over money. Almost definitely, your Charity CEO and Finance Director (or equivalent) will meet the definition.
The systems and controls in place to check Trustees are eligible (both for new appointments and, now given the new requirements, those already in post) will need to be reviewed and updated. Charities can make use of official registers which record the names of people who are disqualified from acting as charity trustees. These include:
- The Individual Insolvency Register maintained by the Insolvency Service.
https://www.gov.uk/search-bankruptcy-insolvency-register, which contains details of:
- bankruptcies that are either current or have ended in the last 3 months
- current individual voluntary arrangements and fast track voluntary arrangements
- current bankruptcy restriction orders and undertakings
- Searches of the Register can be made on the Insolvency Service website, by visiting your local Official Receiver’s office, or by post or fax.
- The register of disqualified directors maintained by Companies House
https://www.gov.uk/government/organisations/companies-house. Searches of the register can be made on the Companies House website.
- The register of all persons who have been removed as a charity trustee.
http://apps.charitycommission.gov.uk/trusteeregister/search.aspx either by the commission or by an Order of the High Court since 1 February 1993.
Those affected may also be able to apply for an advanced waiver from the Charity Commission (the service opened from February 2018 and must be applied for by the individual, rather than the Charity on their behalf) through https://www.gov.uk/guidance/automatic-disqualification-rules-for-charity-trustees-and-charity-senior-positions#apply-waiver
Further information can be found at https://www.gov.uk/guidance/automatic-disqualification-rules-for-charity-trustees-and-charity-senior-positions