Commission updates model documents to give trustees more control 1

Finance | Tania Mason | 13 Jun 2011

The Charity Commission has revised its model charity trust deed, constitution and articles of association to give trustees more flexibility over decisions relating to financial benefits for themselves and others connected to them.

The new wording also brings the documents into line with the model constitutions of the new Charitable Incorporated Organisation.

All of the model documents now:

allow a trustee or connected person to be paid for supplying just goods to the charity (in addition to the statutory power for them to provide services)
allow a trustee or connected person to be employed or remunerated by the charity subject to getting permission from the Commission
include the same provisions for addressing conflicts of interests and conflicts of loyalties
allow a minority of the trustees to receive financial benefits as beneficiaries (ie where the benefit is money or has a monetary value)
encourage charity members to resolve internal disputes themselves before resorting to litigation
make it clear that charities operating substantially in Scotland and/or Northern Ireland must not apply their property for purposes which are not charitable in those countries.

The Commission stated that the new wording in the documents allows charity trustees “to run their charities in a flexible way, subject to a range of controls which reflect sound operational practice”.

This is consistent with comments made by Commission chair Dame Suzi Leather (pictured) at a public meeting of the regulator earlier this month, where she announced that the Commission’s new strategy would involve “less hand-holding” of trustees and greater trust that they know best how to run their own organisations.

Directory: Charity Commission
Who's Who: Suzi Leather

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Carl Allen
13 Jun 2011

It is a very good decision to allow greater discretion having explained that the exercise of such discretion is subject to greater public transparency and regulatory action where warranted.

However accountability is not the same as transparency and the exercise of discretion that fails to meet standards leaves regulators less room to execise discretion ...an instance of carrot, stick and nudge.

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