When a senior employee leaves the charity suddenly, the trustees demand to know why but are left in the dark by the chief executive. Jesper Christensen advises what to do.
A member of our senior management team (SMT) has left our charity unexpectedly and at very short notice. As trustees we had been aware unofficially there had been a difference of views between the person and our chief executive (CE).
We raised the issue of the sudden departure of such a senior member of staff at a board meeting but our chair and CE refuse to provide trustees with any information on the grounds of a confidentiality clause in the compromise agreement. Surely the board, as employer, is entitled to know the main reason for this sudden departure. We believe that we need to be reassured that this is not a situation where the outgoing member of the SMT discovered something untoward and was on the point of whistleblowing. Who is right?
A trustee being kept in the dark
Dear trustee kept in the dark
You are entirely right that the board of trustees of a charity does have a right to know about this individual’s departure. Collectively, the trustees own the organisation (albeit held on trust) and are entitled to be privy to its affairs, including about its employees.
As a member of the board you would ordinarily be aware of the circumstances of the SMT member’s departure and the terms of any compromise agreement when the settlement is approved by the board in principle. Any obligations on the charity to keep terms confidential will cover disclosure to individuals outside the organisation. There is no reason the trustees should not be informed why the SMT member left and on what terms, as the trustees are part of the charity.
In actual fact, as you rightly point out, there are important reasons why you should be provided with this information. As a trustee, you have a duty to ensure that the charity complies with its governing objectives, the requirements of the Charity Commission and its wider legal obligations. In this instance, were you to believe the SMT member may have discovered that a malfeasance had taken place, the trustees have a particular need to be informed of the circumstances surrounding his or her departure. Trustees are responsible for the charity’s overall regulatory compliance.
Furthermore, if the settlement which the SMT member received is above what the Charity Commission would consent to, then you, with the other trustees, could be personally liable to repay the excess out of your own money. You will therefore want to know the terms of the deal and should have known these before it was finalised.
I would suggest that you and your fellow trustees force the chair to disclose to the entire board the details of what has taken place. The chair may have instructed the CE not to do so and it is the chair who should be pressed to comply.
Jesper Christensen, partner, Bircham Dyson Bell LLP