Lessons for itself as well as for charities from Actors’ Benevolent Fund case, says Commission
Melanie May | 4 June 2024 | News
The Charity Commission says it has learned lessons from its case into the Actors’ Benevolent Fund, and has also issued guidance for charities, based on the case.
The Commission opened a regulatory compliance case into concerns about governance and financial controls at the Fund back in February 2022, due to a significant disagreement around how trustees were appointed into and removed or retired from the charity’s board.
As part of its case, the Commission used its legal powers to appoint temporary trustees based on the member votes counted during the charity’s AGM in 2022. The regulator also ordered the charity to hold a new election to give its members another opportunity to have a democratic say in the charity’s trusteeships.
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In addition, the Commission found that the charity was operating without sufficient financial policies and had an unclear governing document which ultimately contributed to the dispute.
Issues resolved
The governing document has since been updated, and the regulator is also now satisfied the charity’s new board of trustees was appointed via a valid election in January this year. It says it is assured the Actors’ Benevolent Fund’s new board of trustees are working together in the best interests of the charity, and that the charity has shown significant commitment to continuing to improve its governance. This includes developing a plan to revitalise governance and a strategy on how to better meet the needs of its beneficiaries. The Commission is therefore satisfied that its active engagement can conclude, expecting trustees to continue their efforts, and has closed the case.
Lessons for the Commission
The case saw the Commission itself receive a complaint about how it had treated trustees excluded from the Actors’ Benevolence Fund. In response, it conducted an internal review that concluded its treatment had been unfair. It now says it has learned from the experience about how to handle such cases in the future.
Learnings for charities
It also advises charities not to allow disagreements to overshadow their charity’s positive work and encourages all charities to take steps to help avoid disputed trusteeship and to minimise the impact if these or significant disagreements should arise.
The Commission advises trustees at any charity to:
- Use its guidance to check their governing document is fit for purpose and not open to differing interpretations, taking extra care to ensure it is clear on how to appoint trustees and honorary roles.
- Ensure good practice on governance essentials, such as running effective meetings and being clear on how to appoint or elect trustees in line with the charity’s governing document.
- Ensure regular trustee rotation. There is no legal requirement for fixed-term board appointments, but the Charity Governance Code recommends rigorous review of the reappointment of any trustee who has served for nine or more years.
- Ensure transparency in decision-making and governance processes. Minute-taking protects charities when decisions are challenged during an internal dispute or from external critics. The regulator has guidance on taking minutes and running meetings.
If disagreements do occur, the regulator urges trustees to not lose sight of their charity’s best interests or the good work it does. It recommends seeking mediation, showing good will and acting in good faith, and also encourages all trustees to be mindful to channel their belief in the charity’s mission in a constructive and collaborative way.
Helen Earner, Director of Regulatory Services at the Charity Commission, said:
“We have worked to draw a line under what has been a very disruptive period for the Actors’ Benevolent Fund and our regulatory compliance case has now concluded. The charity has set in motion several positive changes to strengthen how it operates and has a newly elected trustee board, and we’re hopeful there is now a renewed focus on helping beneficiaries.
“This has been a difficult time for all involved and we acknowledge some parties remain unhappy. We have ourselves learned lessons from this case and are already taking these forward in how we handle other cases where trustee appointment is disputed. We have also apologised for not including all past and present trustees in the early stages of our case, which was a fair challenge to our approach, but has not had a material impact on the overall outcome.
“We encourage other charities to recognise the impact disagreements can have and take steps to avoid these situations. As regulator we cannot referee differences of opinion between trustees, but if necessary, we will step in and use our powers to appoint trustees, or assist a charity or its members to appoint trustees.”
About Melanie May
Melanie May is a journalist and copywriter specialising in writing both for and about the charity and marketing services sectors since 2001. She can be reached via thepurplepim.com.