News

EGM held as Shetland Trust discusses compliance over OSCR-approved restructure

Governance | Niki May Young | 13 Sep 2012

The Office of the Scottish Charity Regulator has warned the Shetland Charitable Trust that it will examine all options available to it if there is further delay in the implementation of its approved governance restructure of the Trust.

The regulator warned that under the Charities and Trustee Investment (Scotland) Act 2005 it has the power to "suspend any persons concerned in the management or control of the charity who appears to have been responsible for, privy to, contributed to or facilitate misconduct", and that it would also have the option of petitioning the Court of Session for more permanent action to be taken. 

The warning is in response to delays in the implementation of the Trust's restructure approved by OSCR in July and regarding dissent over the approved structure in the current board.

The charity is holding an EGM today to discuss how to proceed after already failing to adhere to the conditions of the agreed restructure. 

In a letter sent to the charity on 13 August David Robb, chief executive of OSCR, raised concerns that five weeks since the regulator's approval of the restructure, little progress was evident. OSCR had approved the Trust's timeline for restructure which advised that within two weeks of approval the Deed of Trust would be revised. However this did not take place. 

Further Robb raised concerns about dissent within the Trust's ranks over whether to accept the charity's restructure:

"We are aware that at your recent workshop session, there has been further discussion about the approved scheme and whether it is the most desirable way to proceed," he said.

"I note with considerable disappointment that the current situation would indicate that at least some of the charity trustees are unwilling to proceed in the manner previously indicated to and agreed with OSCR.

"Accordingly, for the avoidance of doubt, let me be clear that it is the regulator's expectation that as charity trustees you will, as a priority, seriously consider your legal duties under charity law and act in line with the undertakings previously given by the Trust to the regulator.

"Where any charity trustee feels that a decision has been made or action taken that is not in the best interests of the charity, they should consider their position," he advised.

Subsequent to this letter OSCR remained in discussion with the charity's chairman, Drew Ratter and chief executive Dr Ann Black who advised a meeting would be convened today.

In a letter dated 24 August Robb advised that today's meeting must see "positive, urgent steps to implement the approved scheme" in order for the charity to remain compliant and allow OSCR to relax its "proactive monitoring of the Trust".

Vice chair contests the reorganisation

Within the letter Robb points to issues raised by Dr Jonathan Wills, vice chairman of the Trust who in a commentary in the Shetland News proposed the rejection of the approved restructure.

In his commentary Dr Wills takes umbrance on what he calls OSCR's "threat" that as trustees they would be personally liable for the costs of any legal action undertaken, but expresses strong views about the restructure which he said was decided upon by just nine of the 22 trustees in December last year, and that only three of the current trustees were part of that decision. 

"Once lost, we may never be able to restore democratic, elected stewardship of the Trust's £200m assets, and the hundreds of millions more that we're likely to earn from Viking Energy," said Dr Wills.

"OSCR won't listen to the argument that only three of the present trustees actually voted to end democratic control. The other six trustees were either defeated at this year's council elections, or did not stand again. We're bound by our predecessors' decisions, whether we like it or not, the regulator says," he continued.

"No amendment to their defective scheme to reorganise the trust can be considered," he went on, "We must implement it or start the process all over again, in which case OSCR will be extremely displeased and may discipline us for 'misconduct'.

"None of us earns a penny from being a trustee. The lawyers' bills could prove personally ruinous." 

Background

The restructure of Shetland Charitable Trust was ordered by OSCR after concerns were raised about the independence of the organisation from the Shetland Council and possible conflicts of interest, as 22 out of its 24 trustees are elected councillors.

The saga dates back to 2009 and has been a matter of much contention and debate with opinions polarised on whether the charity should be run by trustees independently selected or whether it be "democratically accountable" by being run by elected councillors.

The approved governance structure was to reduce the number of trustees to 15, comprising eight appointed non-councillor trustees and seven councillor trustees. A quorum of six, three of which must be non-councillors was decided upon.

Directory: Office of the Scottish Charity Regulator (OSCR)