The Charity Commission has launched a three-month public consultation on how it should implement new powers to disqualify certain persons from being trustees in circumstances where they are judged not fit to act on behalf of a charity, for a period of up to 15 years
The power, which was included in the Charities (Protection and Social Investment) Act 2016, will come into effect in April 2017. It is distinct from existing provisions where some people are automatically disqualified from being trustees.
The Commission is seeking feedback on its proposed approach from professional advisers, charities, members of the public and other regulators.
In particular, it invites comments on the factors that the Commission will take into account when deciding whether the tests set out in the Charities Act have been met, and its approach to deciding on the length of the disqualification.
The Commission will only be able to make a disqualification order when it is satisfied that each of three tests is met. These are that at least one out of six ‘conditions’ applies; secondly, that the person is unfit to be a trustee; and thirdly, the order is desirable in the public interest in order to protect public trust and confidence in charities.
The ‘conditions’ include caution or conviction here or abroad for offences such as misadministration or theft of charity funds or bribery; anyone judged by HMRC not to be a ’fit and proper person’ to be a manager of a body or trust; an officer or employee of a charity or a corporate trustee who was responsible for, contributed to or facilitated misconduct or mismanagement in a charity or who failed to take any reasonable step to oppose it.
Cases are likely to fall within three disqualification periods: 10-15 years; five to nine years; and less than five years. Among the examples of aggravating and mitigating factors the Commission will take into account is ‘actual significant financial loss arising from the conduct’, which would result in a longer period of disqualification.
The Commission is proposing that before an order is made, there will be a notice period in which the individual will be able to make representations to the commission contesting its decision. Individuals will also have the right to appeal to the First Tier Tribunal (Charity) a disqualification order is made.
The consultation closes on 22 August.
The policy paper, Charity Commission Power to disqualify from acting as a trustee, is here
