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The Charity Commission has recently concluded its regulatory compliance case involving the Actors’ Benevolent Fund, drawing out important lessons for all charities.
This case, initiated in February 2022, stemmed from concerns about the Fund’s governance and financial controls. Significant disagreements about trustee appointments and removals disrupted the charity and its ability to fulfill its aims.
As a result, the Charity Commission advises all charity trustees to consider how to prevent disputes over trusteeship and, if they do arise, how to handle them while minimizing their impact on the charity.
Key Recommendations for Trustees:
- Review Governing Documents: Ensure the charity’s governing document is clear and fit for purpose, particularly regarding the appointment and removal of trustees and honorary roles. The Charity Commission provides guidance for this review.
- Governance Best Practices: Maintain good governance practices, such as running effective meetings and appointing or electing trustees according to the governing document.
- Trustee Rotation: Regularly rotate trustees. The Charity Governance Code recommends rigorously reviewing the reappointment of any trustee who has served for nine or more years.
- Transparency in Decision-Making: Ensure transparency in decision-making and governance processes. Keeping detailed minutes of meetings can protect the charity during internal disputes or when facing external scrutiny.
Addressing Disagreements
The Charity Commission acknowledges that disagreements can happen but urges trustees to always prioritize the charity’s best interests and the good work it does.
In the case of the Actors’ Benevolent Fund, the Commission found that unclear governing documents and inadequate financial policies contributed to the disputes. The charity has since updated its governing document and appointed a new board of trustees by election in January this year.
While the Charity Commission cannot mediate every difference of opinion between trustees, this case shows that it can intervene and appoint trustees when necessary.
The broader lesson here is to ensure that disagreements do not overshadow the positive work of your charity.
