All charities need to be aware of changes to the regulations regarding who can perform certain roles at charities. These rules will be in force from 1 August 2018. The Charity Commission has recently issued guidance and charities need to start preparing now.
Charities should go through an induction and reference process with new trustees. Currently the main disqualifications are:
- An unspent conviction for an offence involving dishonesty or deception
- Undischarged bankruptcy or being subject to an individual voluntary arrangement (IVA) with creditors
- Disqualification from being a company director
- Having been removed a charity trustee for misconduct by the High Court, Charity Commission or equivalent
- Where a charity works with children or vulnerable adults the necessary additional safeguarding checks will be required
The new rules mean someone can also be disqualified from being a charity trustee for the following additional reasons:
- Being on the Sex Offenders Register
- Unspent convictions for:
- terrorism, money laundering and bribery
- particular offences under the Charity Act 2011 for disobeying a Charity Commission order or direction (including against those who resign as trustees before they can be removed from that role)
- offences for misconduct in public office, for perjury and perverting the course of justice
All the reasons for disqualification are also being extended to senior managers within a charity. Essentially, this will cover chief executive or chief finance officer or equivalent positions, determined by the role served rather than the job title.
What charities need to do
In preparation, charities should look to:
- Update procedures so prospective charity trustees and relevant senior managers make appropriate declarations that they are not disqualified before they are appointed
- Ask current charity trustees and relevant senior managers to sign a new declaration confirming that they are not disqualified under the new rules (The Charity Commission will publish a new model charity trustee declaration on 1 February 2018)
- Refresh the declarations at reasonable intervals (as per the Charity Commission recommendations)
- Check the official registers recording those disqualified from acting as charity trustees. These can be accessed via the ’setting up a charity’ section of the Charity Commission website
- Review employment and consultancy contract terms in relation to any relevant senior manager positions to ensure that these reflect the new rules
- Ensure that any trustee or senior manager that will now be disqualified, does not continue to act in their role. However, there is provision to apply to the Charity Commission for a waiver, which would permit them to take on the role. Such an approach must be made by the individual and not by the charity. Although in practice the charity’s support will usually be needed.
The commission will only grant a waiver where it considers that:
- It is not likely to damage public trust and confidence in the charity or charities generally
- It is in the best interests of the particular charity
- In reviewing applications, the Charity Commission will consider the seriousness of the conduct, the circumstances that led to the disqualification, how long ago the conduct occurred and whether it caused damage to a charity
These rules are there to protect charities, but the waiver recognises that there are circumstances where a charity will benefit from the experience of someone who has been convicted of a relevant offence or is in an insolvency situation. Indeed, such individuals can often bring insights that are very valuable for charities working in particular fields.
Charities need to prepare now. For advice and support on identifying relevant senior manager positions, updating recruitment processes and reviewing employment contracts, or any other issue raised in this article, please contact by telephone on 01726 74433 or email firstname.lastname@example.org