The Commission has sought to reassure charities that during this period it will continue to act proportionately in the public interest. However, charity trustees are reminded to review and, where necessary, update their governing document and seek advice on specific issues to ensure compliance and good governance.
The Commission’s approach throughout the pandemic
While COVID-19 has had an unparalleled impact across the UK and the globe, charity trustees have remained legally responsible for managing the affairs and governance of their charities throughout the pandemic. Until recently, charitable companies, CIOs and mutuals could avail of temporary relaxed governance provisions introduced by the Corporate Insolvency and Governance Act 2020, including a more flexible framework for the holding of members’ meetings (such as an ability to hold meetings electronically even if not currently authorised under an organisation’s governing document). However, these provisions expired on 30 March 2021, leaving charities of all forms to question how to sensitively and legally conduct meetings in the midst of the easing of social distancing practices.
Throughout the pandemic, the Charity Commission has sought to take a proportionate approach if trustees have decided to hold meetings on a remote or hybrid basis or postpone or cancel a required meeting where there were no rules permitting this in the charity’s governing document. The Commission has been understanding in these circumstances, provided that:
- the circumstances meant the trustees could not reasonably make prior changes to the governing document to allow for alternative means
- the trustees could show that they had considered all relevant factors and possible alternatives (such as, if postponing or cancelling, holding the meeting on a remote or hybrid basis)
- the trustees followed all other rules on meeting governance
- trustees could show their decision is in the best interests of the charity having taken all the circumstances into account.
The Commission’s updated guidance
As lockdown restrictions gradually ease, the Commission has sought to reassure charities in its updated guidance that is will continue to adopt this proportionate approach to meetings in the short term as restrictions are lifted.
In particular, the Commission has noted the following:
- Face-to-face meetings: Charities can gradually return to face-to-face meetings and hold any outstanding annual general meetings (AGMs) or other meetings. However, COVID-19 will continue to have an ongoing impact on charity events and charity trustees may still need to consider how, and if, they can hold meetings.
- Electronic meetings: Charities trustees should check if their charity’s governing document allows them to hold meetings online, by telephone or on a hybrid basis (with some trustees meeting face to face and others joining virtually). Charities without rules permitting meetings to be held online, by telephone or on a hybrid basis are advised to update their governing document and to approve any previous decisions held contrary to their rules, as soon as possible.
- Cancelling or postponing meetings: Where a virtual, face to face or hybrid AGM or other meeting is not a viable solution, trustees may consider cancelling or postponing. If the charity’s governing document does not allow for postponement or cancellation of meetings, the trustees are advised to update their governing document to amend the rules to ensure you can hold meetings in a valid format and approve any previous decisions as soon as possible.
- Wider implications for the charity: Charity trustees should regularly consider the wider risks and implications of holding meetings remotely or postponing or cancelling meetings where this is not allowed by the charity's rules and contact the Commission about the plans as soon as the trustees reasonably can.
We would recommend all our charity clients familiarise themselves with the relevant provisions of their governing documents, and, if in doubt, contact a member of the Birketts Charities Team to advise on specific matters or concerns. Now would be an opportune time to undertake a ‘fit for purpose’ review of your charity’s governing document and ensure that it reflects evolving governance needs.
It is also important for the good governance of your charity that you record any decisions around meetings which are not in line with the current provisions in the charity’s governing document and ratify any non-compliant decisions as soon as possible. This is particularly important if it is not possible to hold your AGM, which may make it difficult for you to finalise your annual reports and accounts. If in doubt, contact a member of the Birketts Charities Team for advice.
The Commission sought to highlight in its guidance that additional requirements may imposed for certain forms of charities. For instance, for charitable companies whose articles do not expressly permit postponement, it would be necessary to convene the original meeting for the purposes of adjourning it, and that original meeting would need to be quorate. Charity trustees should take professional advice and fully understand the implications of any decisions made for their particular charity.
If you require any advice on any of the matters mentioned in this article, please get in touch with Liz Brownsell or another member of the Birketts Charities Team.
The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at August 2021.