New Disqualification Rules for Charity Trustees and Other Managers

From 1 August 2018, new rules will extend the criteria disqualifying certain individuals from acting as trustees or holding senior management positions in charities. The Charity Commission has recently published guidance on this which can be read in full here, but the essentials are summarised below.

1. The new rules in brief

There are currently rules in place which prevent an individual from acting as a trustee of a charity if they meet certain criteria. In particular, you may not act as a trustee if you are bankrupt, or have an unspent conviction for an offence involving dishonesty or deception.

After 1 August 2018, these rules will be extended to include the following additional criteria:

• Having an unspent conviction for a money laundering, bribery or terrorism-related offence, among others;
• Having ever been found to be in contempt of court;
• Having ever been removed as an officer or employee of a charity for misconduct or mismanagement;
• Being subject to notification requirements under sexual offences legislation (i.e. they are on the sex offenders register); or
• Being a “designated person” under anti-terrorist legislation.

See here for a full list of disqualifying conditions under the new rules.

2. “Senior Management Positions”

The other change to the rules is that in addition to applying to trustees, any of the above conditions will now disqualify individuals from acting as either the Chief Executive or the Chief Finance Officer of a charity.  In preparation for the change, charities should double-check whether any of the restrictions may apply to individuals holding these positions within their organisations.

Whether an individual falls into one of these senior management positions will be judged using the following criteria:

• A Chief Executive is a person who is accountable only to the trustees, and who carries overall responsibility for the day-to-day management and control of the charity.
• A Chief Finance Officer is a person who is accountable only to the Chief Executive or the trustees, and who is responsible for the overall management and control of the charity’s finances.

Only one person is likely to fall into each of the Chief Executive and Chief Finance Officer roles in a given charity, regardless of how big the charity is. If you are not sure who within your organisation might hold such a position, see here for further guidance and examples.

3. Waivers

Finally, it is worth noting that if a person does fall under the above criteria, the only lawful way for them to hold one of the positions above is to obtain a waiver from the Charity Commission. Without a waiver, acting in one of these positions whilst disqualified is a criminal offence.

If the new rules will affect you, you can now apply for a waiver online using the updated form on the Charity Commission website. See here for further details of what criteria the Charity Commission will apply.

If you are concerned about how these new rules may apply to you, or have any other questions about the issues above, please do get in touch.