CHARITIES looking ahead in the new year should ensure they focus on two key areas – governance issues and employment matters.
As a firm with specialist expertise and with many charities amongst our clients, our experience tells us that governance and employment are constant sources of requests for advice, particularly as charities seek ever more efficient and commercial models to compete for scarce funding.
The governance structures for charities and third sector organisations are constantly evolving. Every organisation should seek to ensure that the governance arrangements that it operates are the most effective possible to enable the aims of the organisation to be achieved.
Is your constitution up to date and does it reflect how you wish to operate? Should your charity take advantage of being able to operate as a Scot-tish Charitable Incorporated Organisation (SCIO)?
Key aspects of any governance arrangements are the relationship between the members and the trustees and the rights of members.
There are two established membership models that can work equally well for different organisations.
The pros and cons of each have to be applied to ensure what is best for your organisation.
One model, the traditional model, is that the members comprising individuals and corporate bodies have the right to attend the AGM and to vote in and remove directors. This is the model often used for companies limited by guarantee but is also suitable for SCIOs.
The other model might be called the ‘trust model’. Here although the organisation may be established as a company limited by guarantee or a SCIO, the members and the trustees are one and the same people.
This narrow model of membership can be effective in operating a flexible and quick responding organisation.
One aspect that has prevented many organisations from adopting the trust model is the concern that the democratic rights of members are being lost.
This is certainly an argument but one needs to ask how these rights and practices are being exercised.
For many members, their engagement with the organisation that they are a member of is restricted to an invitation to the AGM and many simply do not attend the AGM.
We are aware of organisations that have many hundreds of members that struggle to get more than a handful to attend their AGM.
As a firm that acts for a large number of charities, one area we are most constantly asked to advise on are employment issues in relation to charities. These can arise in connection with joint working, mergers of charities or potential redundancy issues as a consequence of funding restrictions.
Lindsays act for a number of charities in the Borders and myself, as head of charities, and Ben Doherty, head of Lindsays’ employment team, are paying a number of visits to charities in the Borders to discuss issues, particularly governance and employment issues.
If you feel your organisation could benefit from a free consultation with myself and Ben at your offices or Lindsays’ offices, as you prefer, please contact me (firstname.lastname@example.org; 0131 656 5746) or Paul Roper (director, Lindsays, Jedburgh office).