Charities will not face regulatory action for failing to apply new governance code, says Sarah Atkinson

But the director of policy and communications at the Charity Commission says the regulator will use the document to determine the overall health of the organisation

The Charity Commission will not take regulatory action against charities that fail to apply the new sector governance code, but will use it to determine the overall health of the organisation, according to Sarah Atkinson, director of policy and communications at the Charity Commission.

Speaking at the law firm Bates Wells Braithwaite’s annual charity and social enterprise tea party yesterday, Atkinson said that because the Charity Governance Code was voluntary, it would not form the basis for regulatory action, and said the commission was keen to avoid “regulatory creep”.

The Charity Governance Code, which was revised earlier this year, recommends a number of policies including larger charities submitting to an external reviews every three years.

Atkinson told the conference that charities would not be subject to regulatory action solely because they were not applying the code, or because they had not heard of it. 

“But we will think you are a stronger charity better equipped to face the challenges that you have if you are familiar with and applying the code,” she said. 

She said the commission would refer to the code when considering any sector-wider recommendations as part of a statutory inquiry.

“What we will take regulatory action on is our guidance set out in trustee duties,” she said.

Atkinson also said that she hoped the release of the code was “very much the start of what needs to be a process to socialise the code and create a movement around good governance”.

The code also recommends that charities review whether to retain trustees that have served nine years or more in the role, and Atkinson said it was important that decisions to keep trustees in place were taken in the best interests of the charity.

“It is important that when people want to stay for a long time, it is because the charity needs them, not because they need the charity,” she said.

“It can’t be about you – there has to be other ways you can continue to support and love that organisation. It has to be that the charity has particular need of something you can continue to bring, and continue to bring afresh.”

Philip Kirkpatrick, co-head of the charities and social enterprise team at BWB, said that it was important to balance “the need for continuity and knowledge, and the need for innovation and new ideas, and of course allowing for diversity” when deciding whether to extend trustees’ term of office past nine years.

He also said that there was a risk that the code “becomes a stick to beat people with rather than what the code team wanted it to be, which is an aspirational thing to pull people up”.

Also speaking at the conference, Rosie Chapman, chair of the Charity Governance Code Steering Group, which oversaw the redevelopment of the new code, said that she thought the latest version was realistic, but said that some charities already meeting other organisations’ governance codes, such as housing associations or sports charities, “might as well continue to meet their codes” to ensure funding remains in place.

Baroness Pitkeathley, chair of the House of Lords Select Committee on Charities, said that despite the pressures on modern trustees, the sector should be cautious about overemphasising the difficulties ahead of the benefits of trusteeship.

“I think we pile more and more responsibility onto trustees, and perhaps we should be cautious about emphasising all the possible negatives that there are in the responsibilities from being a trustee,” she said.

“I personally have had huge joy from being a trustee – I have learnt things, I have developed skills and I have had terrific experiences. I think we should always remember that when we think about the extras we are giving to trustees.”

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Albert Hall governance row referred to Attorney-General

The Charity Commission has asked Jeremy Wright QC to intervene after trying for several years to persuade the hall to change its constitution

The Charity Commission has asked the Attorney-General, Jeremy Wright QC, for permission to refer the question of the governance of the Royal Albert Hall to the Charity Tribunal.

The commission has been trying for several years to persuade the hall to change its constitution so that its trustee body no longer has a majority of people who own seats in the hall and can sell tickets privately at inflated prices.

Nineteen of the 24 members of the hall’s ruling council are seatholders, and the commission has told the hall it thinks there is potential for them to prefer their own interests to those of the charity.

A spokeswoman for the Attorney-General’s Office confirmed yesterday that the commission had submitted an application for permission to take a case to the tribunal. A spokesman for the commission declined to give any details.

One experienced charity lawyer, who asked not to be named, pointed out that the commission has limited powers to enforce changes in charities, such as the hall, which have constitutions laid out in acts of parliament. Before it can impose a scheme for change it has to persuade a court that the charity itself should have applied for a scheme itself but has unreasonably refused to do so.

Charity law also says that the Attorney-General can refer a case to the tribunal about “the application of charity law to a specific state of affairs”.

The lawyer said: “This is famously just about the longest-running compliance case the commission has dealt with. It’s not surprising that it has reached the end of its tether and taken the first steps towards enforcement action.”

News of the commission’s move has emerged on the day of the hall’s most prestigious annual event, the Last Night of the Proms. A spokeswoman for the hall said: “We have no comment at all to make.”

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Which? accepts three of six governance resolutions put forward by pressure group

The measures will be voted on at the charity’s annual general meeting in November

The Consumers’ Association, the charity behind the Which? publications and brand, has backed three of the six resolutions submitted by a 400-member pressure group to reform the charity’s governance.

In a letter and voting pack that has been circulated to members of the charity, Which? has supported three resolutions from ordinary members out of 15 that will be discussed and voted on at the charity’s annual general meeting on 15 November.

The association has been criticised by some members for its pay and bonus policies for a number of years. A Third Sector investigation last year showed bonuses worth a total of £2.24m were set aside by the charity in 2015/16.

Of the ordinary resolutions submitted by members, the charity said it accepted a measure to make it seek a second legal opinion on whether it could run trading subsidiaries as profit-making enterprises. The charity had already put this into practice, it said, and recommends in its voting pack that members should support this amendment.

The charity’s articles state that the charity should not run commercial operations for a profit, but Which? said that legal advice obtained in 2007, 2008 and 2017 confirmed that none of its trading subsidiaries conflicted with the charity’s articles.

Which? is also supporting a request to make available audio recordings of all general meetings, and another resolution to consider creating a standing body of the entire council and 30 ordinary members that would meet twice a year and discuss the charity’s direction.

There have been controversies about the pay of the charity’s executive team and the controversial use of long-term incentive payments, a practice that was abandoned by the charity earlier this year.

But the charity has opposed three resolutions put forward by members, one of which calls for a reversal of changes agreed by ordinary members in 2007 to grant voting rights to associate members in council elections.

The charity’s voting pack for the AGM says its council recommends that members vote against this proposal, saying it could not work to support consumers’ interests while removing their right to choose representatives for its council.

Another resolution that the council recommends members should reject would reverse changes agreed by ordinary members in 2012 and increase the size of the council to incorporate 12 ordinary members.

Which? says in the voting pack that this resolution would contravene good practice for the charity sector, and that the current mix of nine elected and six co-opted council members “strikes the right balance”.

The charity is also opposing a resolution to change the level of support needed to requisition a resolution to 50 members or 5 per cent of ordinary members, and remove the cost of doing so from the charity’s membership.

Instead, the charity proposes capping the number of ordinary members needed to support resolutions being put to the AGM at whichever is the lowest out of 400 ordinary members or 5 per cent of ordinary members.

The council has also proposed another two special resolutions, one of which will allow a coordinated review by ordinary members of the notice of AGM, annual report and accounts, and council election ballot papers.

Which? has also backed a resolution to clarify rights where more than one person is named in a single entry on the charity’s register of members, which would ensure one vote per each ordinary member in the charity.

A Which? spokeswoman said: “The Consumers’ Association’s council is supportive of changes that take us towards better and stronger governance to ensure we can tackle consumer detriment for decades to come.

“We cannot support proposals we believe could undermine the effective governance of our organisation, but we have proposed alternatives where we can.”

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RSPCA’s governance must be brought up to standard, says regulator

The Charity Commission was responding to the immediate departure of chief executive Jeremy Cooper, which was announced yesterday

The Charity Commission has said that the RSPCA’s governance should be “brought up to standard” after the charity’s chief executive departed with immediate effect.

The comments follow the news yesterday that Jeremy Cooper had stepped down with immediate effect from his role as chief executive of the charity after just a year in the role.

After Cooper’s departure was announced, a spokeswoman for the Charity Commission said: “The charity is undergoing and implementing a governance review. We have been engaging with the charity, both about this review and more generally about its administration and management.

“The RSPCA is a significant institution and it is important that its governance is brought up to the standard that the public would expect.”

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Cooper, who joined the RSPCA in 2013, became chief executive last year after a difficult period for the charity, including criticism from some sections of the national press for the for the successful prosecution of the Heythrop Hunt and the removal and euthanisation of a number of animals.

He replaced Gavin Grant, who stepped down in 2014 for health reasons after two years as chief executive.

Three trustees of the charity also stepped aside last year amid concerns about how the charity was being run.

In an interview with Third Sector last year after his appointment as chief executive, Cooper said he wanted to provide the society with a clear sense of direction after difficult period.

“The absence of a full leadership team and a permanent chief executive means we’ve been dealing with immediate priorities only,” Cooper told Third Sector at the time. “So the first thing is to take stock and say where we want to go.”

A source close to the situation told Third Sector that Cooper had been asked to leave immediately last week, but the charity said in a statement that he had chosen to move on.

Cooper’s LinkedIn page shows that he is now a strategic business consultant based in West Sussex.

Michael Ward, interim chief executive of the RSPCA, said today that the charity had made “great strides” in recent years.

“We have a new five-year strategy that sets out how we are going to prevent cruelty and create the conditions for improved animal welfare, while continuing to modernise our organisation,” he said.

“My energy will be devoted towards us progressing our enduring mission to protect animals, prevent cruelty and alleviate suffering.”

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