Inverness Leisure is a multi-award winning leisure centre located in the Bught area ... featuring over 120 classes per w
CALEDONIA COMMUNITY LEISURE LIMITED
BOARD MEMBERS’ HANDBOOK
TABLE OF CONTENTS
Handbook Content Introduction What is the role of CCLL? How new Board members are identified? What are the responsibilities of Board members? What is the composition of the Board? How does the Board work? How people resign/stand down from the Board? Finance Health & Safety Other useful reading
Annex 1: Board Trustee Job Profile and Person Specification Annex 2: Trustee Registration of Interests form Annex 3: Memorandum and Articles of Association Annex 4: Scheme of Delegation Annex 5: Company Code of Practice Annex 6: Standing Orders: Code of Conduct at meetings Annex 7: Board Sub-Committee Structure and Terms of Reference Annex 8: Other useful reading
What is the role of the Caledonia Community Leisure Limited (Trading as “Inverness Leisure) Board? Inverness Leisure – About us Inverness Leisure is a multi-award winning leisure centre located in the Bught area in the City of Inverness. The centre employs around 140 individuals across a number of areas including a 25 metre competition pool as well as a family sized leisure pool with many fun water features; two sports halls; climbing wall; multi-functional gym; two studios featuring over 120 classes per week; meeting and conferencing facilities; afterschool activities and a Bistro with facilities for over 60 covers. Caledonia Community Leisure Limited is a company limited by guarantee as a Scottish Company (SC181712) as well as being recognised by Her Majesty’s Revenue and Customs as a Scottish Charity (SC27392). The Board of Caledonia Community Leisure Limited are responsible for the management and operation of the facilities known and trading as “Inverness Leisure”. The role of Inverness Leisure is to provide: •
Strategic leadership by using the experience, knowledge and skills of the Board to guide the Company’s activities. This includes strategy development, the allocation of resources and approval of major projects.
•
A governance role to monitor the performance of the Company. This assures prudent control of resources and accountability to stakeholders including Highland Council and local communities.
The Board members are offered clear guidance and direction through this handbook and the Scheme of Delegation outlined later in this handbook. The Memorandum of Association outlines that the objectives of the Company is: “to provide and assist in the provision of facilities for recreation or other leisure time occupation for the community and visitors to Inverness and Highlands area in the interests of social welfare, such facilities being provided to the public at large save that special facilities may be provided for persons who by reason of their youth, age, infirmity or disability may have need of special facilities.” The role of the Inverness Leisure Board is to: • • • • • •
develop and influence the Company’s strategy; consider and approve major projects over £25,000; approve the allocation of the Company’s resources through the annual budget; monitor the Company’s performance through receipt of regular monitoring reports; challenge and scrutinise the Senior Management Team (SMT) in a positive way; help influence the values and culture of the organisation.
How are new Board members identified? When vacancies occur, applicants are sought from partner and representative organisations inviting them to apply through an open advert in the press or for people to put themselves forward. When a vacancy arises on the Board, the Board’s Recruitment and Selection panel reviews the applications and tries to match the selection against the current needs of the Board. These needs are defined as particular skills, experience and knowledge which in part reflect the Company’s current strategic direction and priorities. Following the Company’s Recruitment and Selection processes the panel recommendation is them submitted to the Board for approval.
What are the responsibilities of Board members? The Board have approved a Job Profile and person specification for any Trustee joining the Board (Annex 1). • • • • • • • • • •
Governance; The members of the Board must do what is best for the charity; Operate in a manner consistent with the charitable purpose; Act with care, diligence and integrity; To present yourself in an open and transparent manner declaring any conflicts where they may occur ensuring the Trustee Registration of Interests form (Annex 2) is kept up to date; Comply with relevant acts and legislation; Comply with the Company’s Memorandum and Articles of Association (Annex 3); Comply with the Scheme of Delegation (Annex 4); Comply with the Company Code of Practice (Annex 5); Monitor and review the financial performance of the Company; Health & Safety; strategy and policy setting and Company risks.
What is the composition of the Board? The Board consists of 12 non-executive Trustees who are elected for a three year term and subsequently entitled to restand for re-appointment for a further two terms. The Board is divided into three categories of Trustee: •
Community Business Trustees These four Trustees are appointed following the placement of an advert within the facility and/or in the local press. The applicant must have owned and operated their own business or have held a senior position within a large organisation in order for them to be considered for the position. These Trustees have full voting rights.
•
Elected Member Trustees These four Trustees are serving Highland Councillors and are appointed by their organisation. However, when acting as a Trustee, their corporate (Company) responsibilities supersede their Councillor duties. These Trustees have full voting rights.
•
User Trustees These four Trustees come from ‘users’ of Inverness Leisure. appointed thus:
They are
One from both wetside and dryside clubs operating from within Inverness Leisure; One from Inverness Leisure Customer Forum Group; One from Inverness Area Sports Council. These Trustees have full voting rights. The Board meets up to six times per year with one meeting being the AGM. The Board Meetings are supported by the Chief Executive and the Senior Management Team (SMT) with papers being circulated to all attendees approximately 7 days prior to the meeting. The Code of Conduct for all Board attendees to adhere to at meetings is set out in the Standing Orders in Annex 6. The Board also has a number of sub-committees that meet on: •
a scheduled basis:
•
Finance & Executive; Building & Technical; Governance Review; Remunerations; or
an ad-hoc basis: HR Standards; Appeals; Short-term project groups.
A structure and the remits of the above Sub-Committees can be found in Annex 7. The Board will also appoint a number of individual ‘liaison’ Trustees to work directly with key members of the Senior Management Team or in Management Groups. All Sub-Committees must have representation from all Trustee categories (including Associate Advisors (non-voting staff advisors) where appropriate). Membership to the Sub-Committees is agreed annually at the regular July Board meeting. All non-executive Trustees receive no remuneration but they are entitled to claim out of pocket expenses.
How does the Board work? The Board works through three main processes: •
Working as a team For the Board to carry out its duties effectively, it is important for Board members to operate as a team. This allows all the individual qualities, skills and knowledge to be brought together to address the core purposes of the business. To enhance team working we encourage all Board members to attend Board meetings, lunches and workshops as well as any Company social events. At these meetings we discuss strategic issues affecting the Company and they provide an opportunity for members to get to know each other and discuss issues of mutual interest in an informal setting.
•
Working in partnership with the Senior Management Team Critical to the success of the Company is a strong ‘partnership’ between the Board and the Senior Management Team. This partnership must be based on mutual trust, understanding and confidence. Whilst the Senior Management Team has responsibility for running the Company, the Board and individual members have a crucial role to play in using their expertise, knowledge and networks to determine and achieve the strategic priorities for the Company and to support their management.
•
Working with partner agencies, funders and stakeholders Equally critical to the success is the strong ‘partnership’ between the Board and Officers with external bodies. It is essential that any such partnerships are based on a high level of mutual business-to-business trust and confidence.
How people resign/stand down from the Board? Trustees may resign from the Board by informing the Chair in writing of their decision. In addition, Trustees may be asked to stand down if deemed to have brought the Company or its objects into disrepute. Any such decision will be confirmed in writing from the Chair of the Board.
Finance The Board of Trustees has ultimate responsibility for the Company’s finances and these include: • • • •
To ensure the Company’s finances are managed in line with the Scheme of Delegation, Financial Handbook, Standing Orders and any other documents of relevance; To ensure the solvency of the Company; To safeguard the Company’s assets; To ensure the effective and efficient use of resources;
• • • •
To ensure that suitable controls are in place for the financial systems, which are working effectively and that a statement of assurance is produced by the internal auditor annually; To ensure that the Company complies with all appropriate legislation and requirements of regulatory bodies; To approve annual and longer term budgets and to approve the annual financial statements; To approve any significant borrowing in respect of, or refinancing of, the Company: forming any subsidiary of the Company; the purchase of shares in any other Company, or the acquisition of business or interest in a joint venture, legal partnership or similar undertaking; to approve a proposal to effect administration, liquidation, dissolution or winding-up of the Company; to approve a material change in the nature of the business of the Company, or the discontinuance or termination of the business of the Company; to approve the sale of all or substantially all of the business assets of the Company.
Health and Safety •
• • • •
The Board accepts their collective role in providing strong and active health and safety leadership in the organisation. In particular the Board have a clear responsibility to approve the Company’s Health & Safety Policy Document and to ensure it is reviewed regularly and appropriately. Each member of the Board accepts their individual role in providing health and safety leadership. All Board decisions will reflect our commitment to achieving the objectives set out in this health and safety policy statement. The Board will seek to engage the active participation of employees in improving health and safety. The Board accept that effective two way communication is essential including reviewing health and safety performance and achievement of strategic targets.
A member of the Board is nominated as the health and safety Trustee who will liaise with the qualified health and safety advisor and the Head of Operations to oversee the day to day management of health and safety in the organisation
Other useful reading Other information which may be of use to Trustees can found in Annex 8.
ANNEX 1 Job Profile & Person Specification
Board Trustee
(including Company Chair addendum)
Main purpose of position: The post holder is responsible for providing strategic direction and governance to Caledonia Community Leisure Limited (Trading As “Inverness Leisure”) as well as offering expert advice and support to the Senior Management Team. Key Relationship: Company Chairperson Main responsibilities: In conjunction with the Chief Executive: 1. To provide effective governance of the company and do what is best for the organisation; 2. To ensure the financial probity of the company; 3. Approval of the Company’s annual budgets and financial statements; 4. To ensure the timeous submissions of the Company’s annual returns; 5. Establishing the vision, aims and objectives of the Company; 6. To oversee the development of the business planning process; 7. To develop, monitor and revise company policies and ensure their implementation; 8. To appoint the Company’s Chief Executive and assist in the appointments of other members of the senior management team 9. To establish and promote the organisation’s role within the community; 10. To ensure the Company is compliant with all appropriate Health & Safety legislation, regulations and recommendations; 11. To promote the company, its activities and its needs to the private, public and voluntary sectors so as to enhance the profile and assist with fundraising; 12. To act as an ambassador for Caledonia Community Leisure Limited.
Other general responsibilities: 1. "The Companies Act 2006 sets out seven general Directors' duties which form a code of conduct setting out how Directors are expected to behave. The duties, which are owed by the Directors to the company, are as follows: a. To act within the company's powers; b. To promote the success of the company; c. To exercise independent judgement; d. To exercise reasonable care, skill and diligence; e. To avoid conflicts of interest; f. Not to accept benefits from third parties; g. To declare interests in proposed transactions or arrangements. 2. Additional duties and responsibilities of Directors:Job XX- Issue 1
November 2012
Job Profile & Person Specification
Board Trustee
(including Company Chair addendum)
a. Directors have a personal responsibility to ensure that accounting records are maintained so that at any time they are able to demonstrate and explain the financial position of the company; b. Companies must deliver annual accounts and reports to Companies House and the duty to ensure that the accounts are submitted on time lies with the Directors. 3. Where the company is a charity the Directors are "charity trustees" and their principal duty is to maintain overall control of the charity. They need to ensure that the charity is administered effectively and is able to account for its activities and outcomes both to the Office of the Scottish Charity Regulator ("OSCR") and to the public. The Charities and Trustee Investment (Scotland) Act 2005 describes four general duties that charity trustees are required to comply with, namely, a charity trustee must: a. Act in the interests of the charity; b. Seek, in good faith, to ensure that the charity operates in a manner consistent with its objects and purposes; c. Act with the care and diligence that it is reasonable to expect of a person who is managing the affairs of another person; d. Ensure that the charity complies with the provisions of this Act, and other relevant legislation. 4. The 2005 Act also puts additional specific duties on charities which charity trustees must ensure are met. These duties relate to such areas as providing charity details on the Scottish Charity Register, reporting to OSCR, financial record keeping and reporting and providing information to the public. Additional responsibilities of the Company Chair 1. The Chair is the leader and spokesperson of the Board and as such must keep closely in touch with the Company and its activities. 2. The Chair will normally represent Caledonia Community Leisure Limited at outside events, though may delegate this to the Vice Chair or another colleague. 3. The Chair of the Board is the line manager of the Chief Executive of Caledonia Community Leisure Limited. The Chair will support and, where necessary, challenge the Chief Executive and will ensure the Board as a whole works in partnership with the executive staff. 4. Additionally, the Chair acts as the decision maker on any matters that cannot be progressed without Board authorisation, but cannot wait until the next Board meeting. Ideally the Board will delegate specific powers over matters in progress to the Chair, but this is not always possible. However, no financial decisions involving amounts above £15,000 can be made by the Chair or Chief Executive alone. All decisions made by the Chair between meetings will be brought to the full Board for ratification and must be within agreed policy parameters. 5. In the absence of the Chair, the duties and powers of the Chair will be undertaken by the Vice Chair.
Job XX- Issue 1
November 2012
ANNEX 2 Caledonia Community Leisure Ltd Trustees’ Register of Interests and Offers of Gifts or Hospitality Parts 1 to 3 should be completed on appointment and updated when there is a change of circumstances. A new form, with Part 4 only completed, should be created on each occasion there has been an offer of hospitality or a gift. See guidance notes below. Trustee Details Name Homes Address
I ………………………………………………. (print full name) a Trustee of Caledonia Community Leisure Limited, give notice that I have set out below, the interests which I am required to declare as outlined in the Board Members’ Handbook. Part 1 Business Interests Detail the nature of the interest(s) e.g. property address, business name and position.
Self/Partner/Relative
Part 2 Voluntary/Non-Executive Interests Detail the nature of the interest(s) e.g. property address, name and position.
Self/Partner/Relative
Part 3 Membership Interests Detail the nature of the interest(s) e.g. name of club or organisation.
Self/Partner/Relative
Date completed: Trustees are expected to ensure that the entries against his/her name in the Register of Trustees’ Interests are at all times accurate, comprehensive and upto-date.
Signed…………………………………………………………………….. (Trustee) Date………………………
Signed……………………………………………………………..……
(Company Secretary)
Date………………………
Part 4: Trustees’ Offers of Gifts or Hospitality A new form, with Part 4 only completed, should be created on each occasion there has been an offer of hospitality or a gift. Trustee Details Name Homes Address
Part 4 Describe the nature of the gift or offer and approximate value along with who it came from.
Receipt/Offer of Gift or Hospitality over the value of £25
From Whom & Action Taken
Signed…………………………………………………………………….. (Trustee) Date………………………
Signed……………………………………………………………..……
(Company Secretary)
Date………………………
GUIDANCE NOTE DECLARATION OF TRUSTEES’ INTERESTS What interests should be disclosed? In order to maintain public confidence, the Company requires adhering to principles of best practice in its approach to conflicts of interest affecting Trustees. In line with that policy, each Trustee is required to disclose any interest which might be perceived as liable to influence his/her judgement in taking decisions as a Trustee or in exercising his/her other powers as a Trustee; this therefore involves disclosure of a wider range of interests than those which would require to be disclosed under the general law. Examples of interests which should be disclosed include the following: •
A business interest in any company or other enterprise which is tendering for the provision of goods or services to the Company, or which has already entered into a contract of that nature;
•
A Trusteeship in an organisation which has applied for grant funding from the Council, where the Company will be making recommendations to the Council in relation to that grant application;
•
A position as employee with a body with which the Company has a partnering arrangement;
•
A relationship as consultant to an organisation which is working with the Company in delivering a major event.
It is important to note that the question of whether or not the Trustee will be deriving any personal financial benefit is not conclusive in determining whether there is a conflict of interest for the purposes of the Articles of Association or this Code of Conduct. Where, for example, a Trustee serves on the management committee of an organisation in a voluntary capacity, any benefit which that organisation obtains through e.g. delivering a project on behalf of the Company will flow to the organisation, and not to that Trustee; nevertheless, there could be a perception that his/her involvement in that organisation might have influenced the decision to enter into the arrangement, so it is important that the existence of that linkage is made known in the interests of transparency. As well as disclosing the Trustee's own personal interests, the Trustee should also disclose personal interests held by any "Connected Party". For this purpose, an individual or body will be deemed to be a Connected Party in relation to a given Trustee if that individual or body falls within any of the following categories: •
the Trustee's spouse, civil partner, parent, child or step-child (regardless of age);
•
a person with whom a Trustee lives as partner in an enduring family relationship;
•
a child or step-child of a Trustee's unmarried partner;
•
a body corporate with which a Trustee is “connected” (a Trustee is connected with a body corporate if, but only if, he/she and the persons connected with him/her together (a) are interested in shares comprised in the equity share capital of that body corporate of a nominal value equal to at least 20% of that share capital; or (b) are entitled to exercise or control the exercise of more than 20% of the voting power at any general meeting of that body;
•
the trustees of a trust of which the beneficiaries or potential beneficiaries include a Trustee or any person within the categories listed above (persons acting in the capacity of trustees under an employees' share scheme or pension scheme being disregarded for this purpose); and
•
any firm of which a Trustee is a partner, any of a Trustee's business partners, or any partner of a person who is connected with a Trustee under any of the above categories.
When should disclosure be made? If the Company proposes to enter into a new contract or arrangement with another party in respect of which a Trustee (and/or a Connected Party) has a personal interest, then the Trustee should declare that interest either at the Board meeting at which the question of the Company entering into the contract or arrangement is first considered or at the next Board meeting after the Trustee (or the relevant Connected Party) has acquired his/her interest. If the Trustee (and/or a Connected Party) acquires an interest in a contract or arrangement after it has been entered into by the Company, then the Trustee should declare this interest at the next Board meeting. In addition to decisions relating to the Company entering into contracts or other arrangements with other parties (which represent the main focus for declaration of interests under general company law), there are a range of other matters where decisions of the Board might be perceived as having been influenced by inappropriate considerations where a Trustee (or a Connected Party) had a personal interest or duty e.g. through membership of the board of another organisation. Accordingly, each Trustee is required: •
to disclose to the Company Secretary in writing, upon appointment to the Board, all Trusteeships and other positions (paid or unpaid) held with other bodies; and particulars of all major shareholdings and similar interests (where these are of sufficient materiality as to fall within the definition of “Connected Parties” above)
•
to disclose to the Company Secretary in writing any new Trusteeship or other position with another body, or any new shareholding or other similar interest (of sufficient materiality as to fall within the definition of “Connected Parties”), which is acquired by him/her during his/her period in office as a Trustee.
Register of Trustees’ Interests The Company Secretary will maintain a formal Register of Trustees’ Interests, recording all information disclosed by the Trustees in compliance with the requirements set out above. The Register of Trustees’ Interests will be open to inspection by the Trustees, any member of the senior management team, and any member of the public. Each of the Trustees will be expected to ensure that the entries against his/her name in the Register of Trustees’ Interests are at all times accurate, comprehensive and up-to-date.
ANNEX 3 MEMORANDUM AND ARTICLES OF ASSOCIATION OF CALEDONIA COMMUNITY LEISURE LIMITED Incorporated December 1997 (as amended October 2005) (as amended January 2009) THE COMPANIES ACT 1985 COMPANY LIMITED BY GUARANTEE AND NOT HAVING A SHARE CAPITAL MEMORANDUM OF ASSOCIATION OF CALEDONIA COMMUNITY LEISURE LIMITED 1.
Name The name of the Company is Caledonia Community Leisure Limited (“the Company”).
2.
Interpretation For the purposes of this Memorandum: “Member” means a person who has become and remains a member in accordance with the provisions of the Articles of Association “Board” means the board of the Company appointed in accordance with the Articles of Association “Trustee”
3.
means a member of the Board
Registered Office The registered office of the Company will be situated in Scotland.
4.
Objects and Powers
4.1
The Company is established with the following objects (“the Objects”):
4.1.1 to provide and assist in the provision of facilities for recreation or other leisure time occupation for the community and visitors to Inverness and the Highland area in the interests of social welfare, such facilities being provided to the public at large save that special facilities may be provided for persons who by reason of their youth, age, infirmity or disability may have need of special facilities; and
4.1.2 to provide operate and manage the provision of leisure and sports and recreation facilities by means of the operation of a recreation centre at Bught in Inverness and at such other alternative or additional locations as the Trustees may determine. 4.2
In order to further its Objects but not otherwise the Company has power:
4.2.1 to enter contracts and arrangements of any nature with any party or body whether carried on for profit or not; 4.2.2 to draw, make, accept, endorse, discount, execute and issue promissory notes, bills, cheques and other instruments, and to operate bank accounts in the name of the Company; 4.2.3 to purchase or otherwise acquire land of any tenure or any interest in land; 4.2.4 to raise or borrow funds from any person for the objects of the Company including investment upon such terms and conditions as the Company thinks fit: provided that in raising funds the Company shall not undertake any substantial permanent trading activities and shall conform to any relevant statutory regulations; 4.2.5 to charge or mortgage all or any part of the assets of the Company; 4.2.6 to purchase, hire or otherwise acquire and hold, any property, to maintain and alter any such property and to sell, lease or otherwise dispose of or mortgage any such property; 4.2.7 to appoint and remove any person or persons as an investment manager on such terms as shall be agreed by the Company including terms as to the holding and custody of any assets and dealings in any assets or investment; 4.2.8 to appoint and employ staff, consultants, agents or contractors to perform any function of the Company; 4.2.9 to grant pensions to employees and to pay to funds or schemes, whether established by the Company or not, for the provision of pension and retirement benefits in respect of employees of the Company and their widows and children or other dependants; 4.2.10 to insure and arrange insurance cover for, and to indemnify its officers, staff members and voluntary workers against, all such risks incurred in the course of the performance of their duties as the Company shall think fit provided that no such insurance or indemnity shall extend to any claim arising from fraud, wrongdoing or wilful neglect or default on the part of the Members, Trustees, volunteers or any of them; 4.2.11 to establish or support any charitable trusts, associations or institutions formed for all or any of the Objects; 4.2.12 to promote the interests of any Company which is for the time being a subsidiary, holding Company or subsidiary of any holding Company of the Company or any undertaking which is for the time being a subsidiary undertaking of the Company or any holding Company in any manner whatever (and, in particular, provided any such Company or corporate body or undertaking is a charity, by paying or discharging the liabilities thereof or giving any undertaking to do so by giving any indemnity or guarantee in respect of such liabilities and by giving any security or charge for any such indemnity or guarantee or for the payment of money or performance of obligations by any such Company or corporate body or undertaking as aforesaid), either with or without consideration and whether or not any
benefit flows to the Company other than the promotion of such interests as aforesaid to the intent that the promotion of the interests of any such Company or corporate body or undertaking as aforesaid shall be an object and not a power of the Company, subject to the power herein stated being exercised in a way that will not conflict with the charitable status of the Company. 4.2.13 to pay out of the funds of the Company the costs, charges and expenses of and incidental to the formation and registration of the Company; 4.2.14 to provide land, amenities or services, either exclusively or together with other persons; 4.2.15 to provide services of any description; 4.2.16 to enter into joint venture agreements with any person and to subscribe for shares in any charity; 4.2.17 to do all such other lawful acts and things as are necessary or desirable to the attainment of any of the objects of the Company or the exercise of any of its powers; 5.
Application of Assets
The income and property of the Company, shall be applied solely towards the promotion of its objects as set out in this Memorandum of Association and no part shall be paid or transferred, directly or indirectly, by way of dividend, bonus or otherwise to Members or Trustees except that the Company may make payment:5.1
of reasonable and proper remuneration for any services rendered to the Company to any member, officer or servant of the Company who is not a Trustee;
5.2
of interest on money lent by any member of the Company or Trustee at a reasonable and proper rate per annum;
5.3
of reasonable and proper rent for premises demised or let by any member of the Company or a Trustee;
5.4
to any Trustee of reasonable and proper out-of-pocket expenses;
5.5
of premiums for insurance indemnifying Trustees and other Members of the Company against any liability which would otherwise attach to them in respect of any negligence, default, breach of duty or breach of trust in relation to the Company. Such insurance or indemnity shall not extend to any claim arising from wilful fraud or wrong doing or wilful neglect omission or default on the part of any Member, or Trustee of the Company.
6.
Limitation of Liability
The liability of the Members is limited. 7.
Guarantee
Every Member of the Company undertakes to contribute to the assets of the Company, in the event of it being wound up while he is a member, or within one year after he ceases to be a member, for payment of the debts and liabilities of the Company contracted before he ceases to be a Member, and of the costs,
charges and expenses of winding up, and for the adjustment of the rights of the contributors among themselves, such amount as may be required not exceeding £1.00. 8.
Dissolution
If upon the winding up or dissolution of the Company there remains, after the satisfaction of all its debts and liabilities, any property whatsoever, it shall not be paid to or distributed among the Members, but shall be paid or transferred to some other charity or charities having objects similar to those of the Company and which prohibits the distribution of its or their income and property to an extent at least as great as is imposed on the Company by Clause 5 above. 9.
Change of Memorandum or Articles
The appropriate Charity Division at Her Majesty’s Revenue & Customs shall be notified of any change to the Memorandum and Articles of Association of the Company.
ARTICLES OF ASSOCIATION OF CALEDONIA COMMUNITY LEISURE LIMITED Incorporated December 1997 (amended October 2005) (amended January 2009) THE COMPANIES ACTS 1985 COMPANY LIMITED BY GUARANTEE AND NOT HAVING A SHARE CAPITAL ARTICLES OF ASSOCIATION OF CALEDONIA COMMUNITY LEISURE LIMITED Interpretation 1.
In these Articles: ‘the Company” means the company intended to be regulated by these Articles; “Appointed Trustee” means a Trustee appointed in accordance with Article 26(a); “Elected Trustee” means a Trustee elected in accordance with Article 30; “the Act” means the Companies Act 1985 including any statutory modification or re-enactment thereof for the time being in force; “the Articles” means these Articles of Association of the Company; “the Board” means the board of Trustees constituted as set out in Article 26; “Clear Days” in relation to the period of a notice means the period excluding the day when the notice is given or deemed to be given and the day for which it is given or on which it is to take effect; “Committee” means Committee or Sub-Committee “the Trustees” means the Trustees of the Company (and “Trustee” has a corresponding meaning); “Executed” includes any mode of execution; “the Council” means The Highland Council; “the Memorandum” means the memorandum of association of the Company; “Office” means the registered office of the Company; “the Seal” means the common seal of the Company if it has one; “Secretary” means the secretary of the Company or any other person appointed to perform the duties of the secretary of the Company, including a joint, assistant or deputy secretary;
“the United Kingdom” means Great Britain and Northern Ireland; and words importing the masculine gender only shall include the feminine gender. Subject as aforesaid, words or expressions contained in these Articles shall, unless the context requires otherwise, bear the same meaning as in the Act. Members 2.
The Members of the Company shall be the subscribers to the Memorandum and such other persons or organisations as are admitted to membership in accordance with the rules made pursuant to Article 62. No person shall be admitted as a Member of the Company unless his application for membership is approved by the Trustees, who will act reasonably in exercising their discretion.
General meetings 3.
The Company shall hold an annual general meeting each year in addition to any other meetings in that year, and shall specify the meeting as such in the notices calling it; and not more than fifteen months shall elapse between the date of one annual general meeting of the Company and that of the next provided that so long as the Company holds its first annual general meeting within eighteen months of its incorporation, it need not hold it in the year of its incorporation or in the following year. The annual general meeting shall be held at such times and places as the Trustees shall appoint. All general meetings other than annual general meetings shall be called extraordinary general meetings.
4.
The Trustees may call general meetings and, on the requisition of members pursuant to the provisions of the Act, shall forthwith proceed to convene an extraordinary general meeting for a date not later than eight weeks after receipt of the requisition. If there are not within the United Kingdom sufficient Trustees to call a general meeting, any Trustee or any member of the Company may call a general meeting.
Notice of general meetings 5.
An annual general meeting and an extraordinary general meeting called for the passing of a special resolution shall be called by at least twenty-one Clear Days’ notice. All other extraordinary general meetings shall be called by at least fourteen Clear Days notice but a general meeting may be called by shorter notice if it is so agreed: (1)
in the case of an annual general meeting, by all the Members entitled to attend and vote; and
(2)
in the case of any other meeting by a majority in number of Members having a right to attend and vote, being a majority together holding not less than 95 per cent of the total voting rights at the meeting of all the members. The notice shall specify the time and place of the meeting and the general nature of the business to be transacted and, in the case of an annual general meeting, shall specify the meeting as such.
The notice shall be given to all the members and to the Trustees and auditors. 6.
The accidental omission to give notice of a meeting to, or the non-receipt of notice of a meeting by, any person entitled to receive notice shall not invalidate the proceedings at that meeting.
Proceedings at general meetings 7.
No business shall be transacted at any meeting unless a quorum is present. Three persons entitled to vote upon the business to be transacted, being Members or duly authorised representatives of organisations which are Members, or one tenth of the total number of Members for the time being, whichever is the greater, shall constitute a quorum provided that not more than 49% of the number of the persons present and voting at a meeting shall be elected members of the Council or employees of the Council.
8.
If a quorum is not present within half an hour from the time appointed for the meeting, or if during a meeting a quorum ceases to be present, the meeting shall stand adjourned to the same day in the next week at the same time and place or to such time and place as the Trustees may determine.
9.
The chairman, if any, of the Trustees or in his absence the Vice Chairman shall preside as chairman of the meeting, but if neither the chairman nor the Vice Chairman be present within fifteen minutes after the time appointed for holding the meeting and willing to act, the Trustees present shall elect one of their number to be chairman and, if there is only one Trustee present and willing to act, he shall be chairman.
10.
If no Trustee is willing to act as chairman, or if no Trustee is present within fifteen minutes after the time appointed for holding the meeting, the Members present and entitled to vote shall choose one of their number to be chairman.
11.
A Trustee shall, notwithstanding that he is not a Member, be entitled to attend and speak at any general meeting.
12.
The chairman may, with the consent of a meeting at which a quorum is present (and shall if so directed by the meeting), adjourn the meeting from time to time and from place to place, but no business shall be transacted at an adjourned meeting other than business which might properly have been transacted at the meeting had adjournment not taken place. When a meeting is adjourned for fourteen days or more, at least seven Clear Days notice shall be given specifying the time and place of the adjourned meeting and the general nature of the business to be transacted. Otherwise it shall not be necessary to give any such notice.
13.
A resolution put to the vote of a meeting shall be decided on a show of hands unless before, or on the declaration of the result of, the show of hands a poll is duly demanded. Subject to the provisions of the Act, a poll may be demanded: (1) by the chairman; or (2) by at least two Members having the right to vote at the meeting; or
(3)
by a Member or Members representing not less than one-tenth of the total voting rights of all the Members having the right to vote at the meeting.
14.
Unless a poll is duly demanded a declaration by the chairman that a resolution has been carried or carried unanimously, or by a particular majority, or lost, or not carried by a particular majority and an entry to that effect in the minutes of the meeting shall be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against the resolution.
15.
The demand for a poll may be withdrawn, before the poll is taken, but only with the consent of the chairman. The withdrawal of a demand for a poll shall not invalidate the result of a show of hands declared before the demand for the poll was made.
16.
A poll shall be taken as the chairman directs and he may appoint scrutineers (who need not be members) and fix a time and place for declaring the results of the poll. The result of the poll shall be deemed to be the resolution of the meeting at which the poll is demanded.
17.
In the case of an equality of votes, whether on a show of hands or on a poll, the chairman shall be entitled to a casting vote in addition to any other vote he may have, except where the chairman is an elected member of the Council or an employee of the Council in which case they shall not be entitled to a casting vote.
18.
A poll demanded on the election of a chairman or on a question of adjournment shall be taken immediately. A poll demanded on any other question shall be taken either immediately or at such time and place as the chairman directs not being more than thirty days after the poll is demanded. The demand for a poll shall not prevent continuance of a meeting for the transaction of any business other than the question on which the poll is demanded. If a poll is demanded before the declaration of the result of a show of hands and the demand is duly withdrawn, the meeting shall continue as if the demand had not been made.
19.
No notice need be given of a poll not taken immediately if the time and place at which it is to be taken are announced at the meeting at which it is demanded. In other cases at least seven Clear Days’ notice shall be given specifying the time and place at which the poll is to be taken.
Votes of Members 20.
Every Member shall have one vote. No votes may be given by proxy.
21.
No Member shall be entitled to vote at any general meeting unless all moneys then payable by him to the Company have been paid.
22.
No objection shall be raised to the qualification of any voter except at the meeting or adjourned meeting at which the vote objected to is tendered, and every vote not disallowed at the meeting shall be valid. Any objection made in due time shall be referred to the chairman whose decision shall be final and conclusive.
23.
A vote given or poll demanded by the duly authorised representative of a member organisation shall be valid notwithstanding the previous
determination of the authority of the person voting or demanding a poll unless notice of the determination was received by the Company at the Office before the commencement of the meeting or adjourned meeting at which the vote is given or the poll demanded or (in the case of a poll taken otherwise than on the same day as the meeting or adjourned meeting) the time appointed for taking the poll. 24.
Any organisation which is a member of the Company may by resolution of its Council or other governing body authorise such person as it thinks fit to act as its representative at any meeting of the Company, and the person so authorised shall be entitled to exercise the same powers on behalf of the organisation which he represents as the organisation could exercise if it were an individual member of the Company.
Trustees 25.
The first Trustees shall be those persons named in the statement delivered pursuant to section 10(2) of the Act, who shall be deemed to have been appointed under the Articles. Future Trustees shall be appointed as provided subsequently in these Articles.
26.
There shall be a Board consisting of up to 15 Trustees (but not less than 9 Trustees) appointed as follows:-
(a) (b) (c) (d) (e) (f) (g)
Four Members of the Council appointed by that Council; One appointee of the Board on the recommendation of Inverness Sports Council at the discretion of the Board; One appointee of the Board on the recommendation of Inverness Leisure Group at the Discretion of the Board; One appointee of the Board on the recommendation of Inverness Dryside Clubs at the discretion of the Board; One appointee of the Board on the recommendation of Inverness Wetside Clubs at the discretion of the Board; Four appointees of the Board chosen from the business community at the discretion of the Board; and The Board shall at its discretion be entitled to co-opt up to a further three Trustees in accordance with Article 27 The Board shall also be entitled to appoint up to 4 Associate Advisors who shall be entitled to attend and receive such notice of meetings of Trustees, and of Committees of Trustees, as is required to be given to Trustees but such Associate Advisors shall not be Trustees and shall not be entitled to vote at such meetings. If the Board determine that any item at any such meeting(s) should be held without the attendance of the Associate Advisors then the Associate Advisors shall have no entitlement to stay at such meeting(s) and must leave such meeting(s) whilst the item is being discussed and voted on. Associate Advisors shall also have no entitlement to receive Board papers on items which are considered confidential by the Board
27.
The number of elected members of the Council or employees of the Council appointed to the Board shall at no time be more than 49 per cent of the total number of Board Members or such other proportion as would at any time prevent the Company from being treated for tax purposes as a charity
and the Trustees shall ensure that they are kept informed of any changes in the Inland Revenue’s criteria for qualification as a tax exempt charity. 28.
A Trustee shall cease to be a Trustee if he or she: (1)
becomes bankrupt or makes any arrangement or composition with his creditors;
(2)
becomes prohibited by law from being Trustee;
(3)
becomes incapable by reason of mental disorder, illness or injury of managing and administering his or her property and affairs;
(4)
is the subject of a custodial sentence imposed by a court in the United Kingdom in respect of any criminal act or omission unless the Board determines otherwise;
(5)
is convicted of any criminal act or omission unless the Board determines otherwise;
(6)
resigns from office by giving written notice to the Company;
(7)
is removed by a resolution
(8)
(in the case of a Trustee who has been appointed by the Council under paragraph (a) of Article 26) ceases to be an elected member of the Council or an employee of the Council:
(9)
dies; or
(10) (in the case of a Trustee who has been appointed by the Board on a recommendation if that Trustee ceases to be so recommended); and a Member shall be prohibited from becoming a Trustee if he or she is at any time within one of categories 1, 2, 3 or 4 of this sub-rule. 29.
The Trustees referred to in paragraph (b), (c), (d), (e), (f) and (g) of Article 26 shall be elected by the Members at the Annual General Meeting save for the first such Trustees who shall be appointed by the Council and who shall vacate their offices at the first Annual General Meeting provided that no Trustee elected or appointed under this Article shall be an elected member of the Council or an employee of the Council.
30.
If any of the Trustees appointed in accordance with paragraphs (a) of Article 26 shall, during their term of office, become unable or unwilling to act the Council shall forthwith appoint a new Trustee to fill the vacancy.
Election of Trustees 31.
At the first and every subsequent Annual General Meeting of the Company all Elected and co-opted Trustees shall retire from office except that from the Annual General Meeting in the year 2000 all Elected Trustees and coopted Trustees shall retire at the Annual General Meeting following three years after their appointment or re-appointment to the Board. Associate Advisers will retire at the Annual General Meeting following one year after their appointment to the Board. Further if any Elected or co-opted Trustee or Associate Advisor is appointed by virtue of being a member or an employee of any organisation if they cease to become a member or an employee of that organisation they shall cease in the case of Elected or coopted Trustees to be Trustees and in the case of an Associate Advisor shall cease to be such an Associate Advisor.
32.
No person shall be eligible for re-appointment to the Board as an Elected Trustee if that person has already been re-appointed as an Elected Trustee on two previous occasions in order that the maximum period that any person can be an Elected Trustee is nine years
33.
On a vacancy occurring on the Board, either:-
(a)
the Council if they appointed the vacating Trustee; or
(b)
the Board on the recommendation of the same body as recommended the appointment of the vacating Trustee; or
(c)
in any other case the Board at their discretion; shall without delay appoint a Trustee to fill such vacancy, unless it has previously been resolved by the members of the Company in a General Meeting to abolish it, or for the time being to leave it vacant.
34.
No person other than a Elected Trustee retiring at the meeting shall unless recommended by the Trustees be eligible for election to the Board at any General Meeting unless, not less than three nor more than twenty-one days before the date set for the meeting, there shall have been left at the Office notice in writing signed by a member qualified to attend and vote at the meeting for which such notice is given, of his intention to propose such person for election and also notice in writing signed by that person of his willingness to be elected. The notice shall give the particulars of that person which would, if he were so appointed, be required to be included in the register of Trustees.
Powers of Trustees 35.
Subject to the provisions of the Act, the Memorandum and the Articles and to any directions given by special resolution, the business of the Company shall be managed by the Trustees who may exercise all the powers of the Company. No alteration of the Memorandum or the Articles and no such direction shall invalidate any prior act of the Trustees which would have been valid if that alteration had not been made or that direction had not been given. The powers given by this article shall not be limited by any special power given to the Trustees by the Articles and a meeting of Trustees at which a quorum is present may exercise all the powers exercisable by the Trustees.
36.
In addition to all powers hereby expressly conferred upon them and without detracting from the generality of their powers under the Articles the Trustees shall have the following powers, namely: (1)
to expend the funds of the Company in such manner as they shall consider most beneficial for the achievement of the objects and to invest in the name of the Company such part of the funds as they may see fit and to direct the sale or transposition of any such investments and to expend the proceeds of any such sale in furtherance of the objects of the Company;
(2)
to enter into contracts on behalf of the Company.
Trustees’ expenses 37.
The Trustees may be paid all reasonable travelling, hotel and other expenses properly incurred by them in connection with their attendance at meetings of Trustees or committees of Trustees or general meetings or otherwise in connection with the discharge of their duties subject to the production of satisfactory receipts, but shall otherwise be paid no remuneration.
Trustees’ appointments 38.
Except to the extent permitted by clause 5 of the Memorandum, no Trustee shall take or hold any interest in property belonging to the Company or receive remuneration or be interested otherwise than as a Trustee in any other contract to which the Company is a party.
Proceedings of Trustees 39.
Subject to the provisions of the Articles, the Trustees may regulate their proceedings as they think fit. A Trustee may, and the Secretary at the request of a Trustee shall, call a meeting of the Trustees. It shall not be necessary to give notice of a meeting to a Trustee who is absent from the United Kingdom. Questions arising at a meeting of the Trustees shall be decided by a majority of votes. In the case of an equality of votes, the chairman shall (unless he is an elected member of the Council or an employee of the Council) have a second or casting vote.
40.
(a)
The quorum for the transaction of the business of the Trustees may be fixed by the Trustees but shall not be less than five Trustees. In the case of any Committee, to which these Articles apply, the quorum will be one quarter of the membership of the Committee subject to there being a minimum quorum of no less than three members of the Committee .
(b)
No meeting shall be quorate if more than 49% of those persons present are elected members of the Council with full voting rights.
41.
The Trustees may act notwithstanding any vacancies in their number, but, if the number of Trustees is less than the number fixed as the quorum, the continuing Trustees or Trustee may act only for the purpose of filling vacancies or of calling a general meeting.
42.
The Trustees shall appoint one of their number to be the Chairman and one of their number to be the Vice Chairman of their meetings and may at any time remove a Chairman or Vice Chairman from office by a resolution. Unless he is unwilling to do so, the Chairman so appointed shall preside at every meeting for which he was appointed Chairman. If the Chairman or Vice Chairman is unwilling to preside or is not present within five minutes after the time appointed for such a meeting, any Vice Chairman of that meeting shall preside over the meeting as Chairman unless that Vice Chairman is unwilling to preside or is not present within five minutes after the time appointed for the meeting. If the Chairman or Vice Chairman are unwilling to preside or not present as aforesaid the Trustees shall choose one of their number to preside over that meeting as Chairman.”
43.
A Chairman appointed by the Trustees shall be a Chairman for a period of two years from the date of his appointment unless earlier removed by a resolution. A Chairman may be reappointed at the end of that two year period for a further period of two years unless removed during that further period of two years by a resolution and no person shall be reappointed as a Chairman if he has served as a Chairman for four years. If a Chairman resigns or is removed then the person appointed as Vice Chairman will immediately cease to be Vice Chairman and shall act as Chairman until the next Annual General Meeting when the Trustees shall appoint a Chairman and Vice Chairman of their Meetings
44.
The Board may delegate any of their powers to committees consisting of such member or members of their Board as they think fit and the Board may grant to any such Committee power to co-opt additional members whether or not members of the Company; any Committee so formed shall be in the exercise of the powers so delegated conform to any regulations that may be imposed on it by the Board.
45.
The number of persons on any committee who are elected members of the Council or employees of the Council shall at no time be more than 49% and no meeting of a committee may be quorate if more than 49% of the persons present are elected members of the Council or employees of the Council.
46.
The members of any committee may appoint one of their number to be the chairman of their meetings and may at any time remove him from that office. Unless he is unwilling to do so, the member of the committee so appointed shall preside at every meeting of the committee at which he is present. But if there is no member of the committee holding that office, or if the person holding it is unwilling to preside or is not present within five minutes after the time appointed for the meeting, the members of the subcommittee present may appoint one of their number to be chairman of the meeting.
47.
Questions arising at a meeting of any sub-committee shall be decided by a majority of votes. In the case of an equality of votes, the chairman of that committee shall (unless he is an elected member of the Council or an employee of the Council) have a second or casting vote.
48.
All acts done by a meeting of Trustees, or of a committee of Trustees, shall, notwithstanding that it be afterwards discovered that there was a defect in the appointment of any Trustee or that any of them were disqualified from holding office, or had vacated office, or were not entitled to vote, be as valid as if every such person had been duly appointed and was qualified and had continued to be a Trustee and had been entitled to vote.
49.
A resolution in writing, signed by all the Trustees entitled to receive notice of a meeting of Trustees or of a committee of Trustees, shall be as valid and effective as if it had been passed at a meeting of Trustees or (as the case may be) a committee of Trustees duly convened and held. Such a resolution may consist of several documents in the same form, each signed by one or more of the Trustees.
50.
Any bank account in which any part of the assets of the Company is deposited shall be operated by the Trustees and shall indicate the name of the Company. All cheques and orders for the payment of money from such account shall be signed by at least two Trustees or such other persons as are authorised from time to time by the Board.
Secretary 51.
Subject to the provisions of the Act, the Secretary shall be appointed by the Trustees for such term, and upon such conditions as they may think fit; and any Secretary so appointed may be removed by them.
Minutes 52.
The Trustees shall keep minutes in books kept for the purpose: (1)
of all appointments of officers made by the Trustees; and
(2)
of all proceedings at meetings of the Company and of the Trustees and of committees of Trustees including the names of the Trustees present at each such meeting.
The Seal 53.
The Seal shall only be used by the authority of the Trustees or of a committee of Trustees and other persons authorised by the Trustees. The Trustees may determine who shall sign any instrument to which the Seal is affixed and unless otherwise so determined it shall be signed by a Trustee and by the Secretary or by a second Trustee.
Accounts 54.
Accounts shall be prepared in accordance with the provisions of Part VII of the Act.
55.
The Trustees shall comply with their obligations under Statute (or any statutory re-enactment or modification of that Act) with regard to the preparation of an annual report and its submission to the Registrar of Companies.
Annual Return 56.
The Trustees shall comply with their obligations under the Act with regard to the preparation of an annual return and its submission to the Registrar of Companies, Office of Scottish Charity Regulator (OSCR) and any other body to which it is required by statute or otherwise to be submitted.
Notices 57.
Any notice to be given to or by any person pursuant to the Articles shall be in writing except that a notice calling a meeting of the Trustees need not be in writing.
58.
The Company may give any notice to a Member either personally or by sending it by post in a prepaid envelope addressed to the member at his registered address or by leaving it at that address. A member whose registered address is not within the United Kingdom and who gives to the company an address within the United Kingdom at which notices may be given to him shall be entitled to have notices given to him at that address, but otherwise no such member shall be entitled to receive any notice from the Company.
59.
A Member present in person at any meeting of the Company shall be deemed to have received notice of the meeting and, where necessary, of the purposes for which it was called.
60.
Proof that an envelope containing a notice was properly addressed, prepaid and posted shall be conclusive evidence that the notice was given. A notice shall be deemed to be given at the expiration of 48 hours after the envelope containing it was posted.
Indemnity 61.
Subject to the provisions of the Act every Trustee or other officer or auditor of the Company shall be indemnified out of the assets of the Company against any liability incurred by him in that capacity in defending any proceedings, whether civil or criminal, in which judgement is given in his favour or in which he is acquitted or in connection with any application in which relief is granted to him by the court from liability for negligence, default, breach of duty or breach of trust in relation to the affairs of the Company.
Rules 62.
(1)
The Trustees may from time to time make such rules or bye laws as they may deem necessary or expedient or convenient for the proper conduct and management of the Company and for the purposes of prescribing classes of and conditions of membership, and in particular but without prejudice to the generality of the foregoing, they may by such rules or bye laws regulate:
(i)
the admission of members of the Company (including the admission of organisations to membership) and the rights and privileges of such members, and the conditions of membership and the terms on which members may resign or have their membership terminated and the entrance fees, subscriptions and other fees or payments to be made by members;
(ii)
the conduct of members of the Company in relation to one another, and to the Company’s servants;
(iii) the setting aside of the whole or any part or parts of the Company’s premises at any particular time or times or for any particular purpose or purposes; (iv) the procedure at general meetings and meetings of the Trustees and committees of the Trustees in so far as such procedure is not regulated by the Articles; (v)
generally, all such matters as are commonly the subject matter of company rules.
(2)
The Company in general meeting shall have power to alter, add to or repeal the rules or bye laws and the Trustees shall adopt such means as they think sufficient to bring to the notice of members of the Company all such rules or bye laws, which shall be binding on all members of the Company. Provided that no rule or bye law shall be inconsistent with, or shall affect or repeal anything contained in, the Memorandum or the Articles.
ANNEX 4
Schedule of Matters Reserved to the Board and Scheme of Delegation Introduction This document sets out the powers reserved to the Board of Caledonia Community Leisure Limited and the powers which may be delegated to the Chief Executive and staff and it should be referred to as the ‘Scheme of Delegation’. It should be noted that the Board of Caledonia Community Leisure Limited remains accountable for all of its functions, even those delegated to the Chief Executive and would therefore expect to receive information about the exercise of delegated functions to enable it to maintain a monitoring role. The Board will review the effectiveness of the Scheme each year and make amendments as required.
The Scheme of Delegation 1.
Matters reserved for Board approval
1.1
Governance
1.1.1 The following matters are reserved to the Board:(i) (ii) (iii) (iv) (v)
Appointment of the Chair and Vice-Chair; Review and approval of Board Handbook; Approval of proposals for action on litigation against or on behalf of Caledonia Community Leisure Limited; Establishment and dissolution of Sub-committees and Working Groups; and Approval of procedures for the evaluation of the effectiveness of the Board.
1.1.2 The Chief Executive is responsible for all other governance matters not precluded under the Board Handbook, specifically:(i) (ii) (iii) (iv) 1.2
Acting as the Board’s accountable officer; Recording and reporting on the Board’s governance arrangements; Undertaking the review of internal controls and publication of the Company’s annual report; and Ensuring that the performance of Caledonia Community Leisure Limited in relation to agreed standards is reported appropriately.
Strategy, policy, plans and budgets
1.2.1 The following matters are reserved to the Board:(i) (ii) (iii) (iv) (v) (vi) (vii)
Definition of the Board’s vision, mission, aims and objectives; Ownership of the business plan; Approval of the organisation’s strategic policies and procedures; Approval of the annual budget and estimates; Monitoring of performance and budget on a regular basis; Approval of business cases requiring additional revenue resources; Approval of arrangements of dealing with complaints.
1.2.2 The Chief Executive is responsible for all other strategy, planning and budgeting matters not precluded under the Board Handbook, specifically:(i) (ii) (iii) (iv) (v) (vi)
Preparation of the Board’s vision, mission, aims and objectives; Preparation of the draft business plan and implementation of the plan; Advising the Board on strategic issues; Ensuring that the Board’s policies and programmes are implemented; Advising the Board on general policy and to ensure that all proposals are consistent with policy; Preparation of the annual budget and estimates and controlling of income and expenditure;
2
(vii)
Ensuring appropriate systems are in operation for planning, monitoring, evaluating and reviewing performance for all services; (viii) Undertaking a review of risks and maintenance of the risk register; (ix) Making long term assessments of resources, needs and commitments and to co-ordinate advice on forward planning; and (x) Implementation of the complaints scheme. 1.3
Staffing
1.3.1 The following matters are reserved to the Board:(i) (ii) (iii) (iv) (v) (vi)
Appointment, appraisal and dismissal of the Chief Executive, where applicable; Assisting in the appointment of members of the Senior Management Team and consideration of Senior Management Team re-gradings; Approval of the Staff Handbook; Approval of the staff appraisal policy and performance appraisal of the Chief Executive; Approval of any organisational restructuring; and Setting of terms and conditions of employment.
1.3.2 The Chief Executive is responsible for all other staffing matters not precluded under the Board Handbook, specifically:(i) (ii) (iii) (iv) (v) 1.4
Appointment, appraisal and dismissal of members of the Senior Management Team; The recruitment and appointment of all staff in accordance with the appointments procedure; Implementation of the Staff Handbook; Implementation of the staff appraisal system and consideration of regradings up to but not including Senior Management Team level; Organisational restructuring, at a day to day operational level, which does not involve any compulsory redundancy
Financial arrangements
1.4.1 The following matters are reserved to the Board:(i) (ii) (iii) (iv) (v) (vi)
Approval of the Finance Handbook; Approval of the opening or closing of any bank account or other deposit media; Approval of the writing-off of any loss in excess of £1,000 per transaction; Approval of outline and final business cases for capital investment; Approval of the reserves policy; and Any other matter that is of significant financial or reputational risk to the board or any material issue of principle.
3
1.4.2 The Chief Executive is responsible for all other financial matters not precluded under the Board Handbook, specifically:(i) (ii) (iii) (iv) (v) (vi) (vii)
Implementation of the Finance Handbook; Authorisation of cheques and transfers of funds; Implementation of the reserves policy; Implementation of the credit control policy; Maintenance of a petty cash fund; Collection of income and payment of expenditure; Approval of the writing-off of any loss up to the value of £1,000 per transaction; (viii) Ensuring steps are taken to safeguard assets of the organisation; (ix) Ensuring all expenditure is planned and monitored continually so that it is within approved estimates and meeting the outcome of the Business Plan; and (x) Ensuring that financial management complies with the Finance Handbook.
1.5
Procurement
1.5.1 The following matters are reserved to the Board:(i) (ii)
Approval of the procurement policy as outlined in the Finance Handbook; Approval of the appointment of the following specialist services:a. b. c. d.
(iii)
Company Bankers Company Auditors HR Advisors Solicitor
Approval of contract/tenders in accordance with the Finance Handbook.
1.5.2 The Chief Executive is responsible for all other purchasing matters not precluded under the Board Handbook, specifically:(i) (ii) (iii) 1.6
Approval of contracts in accordance with the Finance Handbook; Authorising contracts/appointments which have been approved by the Board; and Implementation of the procurement policy as outlined in the Finance Handbook.
Income generation
1.6.1 The following matters are reserved to the Board:(i)
Approval of all fund raising and income generation programmes, including funding applications, service delivery contracts etc.
1.6.2 The Chief Executive is responsible for all other income generation matters, specifically:(i)
Generating income generation opportunities for Caledonia Community Leisure Limited and presenting proposals for approval by the Board. 4
1.7
Auditing and reporting
1.7.1 The following matters are reserved to the Board:(i) (ii) (iii)
Approval of the annual report and audited financial statements; The establishment of a Sub-committee to monitor and scrutinise the financial management of the Company; and Receipt of the annual management letter from the external auditor and agreement to the proposed course of action, taking into consideration the recommendations of the above Sub-committee, where appropriate.
1.7.2 The Chief Executive is responsible for all other auditing and reporting matters not precluded under the Board Handbook, specifically:(i) (ii)
Preparation of the annual report and financial statements; and Preparation of the annual Company report.
2.
Delegation of authority
2.1
In addition, the following matters are delegated to the Board’s various Subcommittees as outlined in their terms of reference, each of which will report regularly to the Board:(i)
The Finance and Executive Sub-Committee;
(ii)
The Building and Technical Sub-Committee;
(iii)
The Governance Review Sub-Committee;
(iv)
The HR Standards Sub-Committee;
(v)
The Appeals Sub-Committee;
(vi)
The Remuneration Sub-Committee; and
(vii)
The Chief Executive is responsible for all other matters not precluded under the Board Handbook.
2.2
The Chief Executive is not restricted from exercising his/her own delegation to staff for any of the matters for which he/she is responsible.
2.3
The Chief Executive is accountable for the actions of all officers.
3.
Custody of seal and sealing of documents
3.1
The Chief Executive shall hold the common seal in a safe place secured under lock.
5
3.2
All deeds and other documents to which the common seal of the Board shall be required to be affixed shall be sealed and witnessed by the Chief Executive.
3.3
The use of the seal will be recorded in the seal log, and will be endorsed at the next meeting of the Board.
4.
Urgent decisions
4.1
The Chief Executive is empowered to take urgent action on behalf of the Board in matters which would normally have been considered by the Board itself but where no meeting of the Board is available for that purpose. On all such occasions, he/she shall liaise with the Company Secretary and consult first with the Chair, or in his/her absence the Vice-chair, before taking action and shall seek endorsement of the action at the next Board meeting.
6
ANNEX 5 Company Code of Practice 1. Introduction As a Board Member or as an Officer of the Company you should not take decisions which will result in direct financial or other benefits to yourself, your family or your friends. This is facilitated by the completion of the Trustee Registration of Interests which should be updated regularly and no less than every term appointed.
2. Purpose of the code The code aims to define the standards expected of Inverness Leisure Trustees in order to ensure that: • the organisation is effective, open and accountable; • the highest standards of integrity and stewardship are achieved; and; • the working relationship with the Chief Executive and other staff is productive and supportive.
3. Integrity Inverness Leisure Trustees should conduct themselves in a manner which does not damage or undermine the reputation of the organisation, or its staff. More specifically they: • should not place themselves under any financial or other obligation to outside individuals or organisations that might seek to influence them in the performance of their role; • must avoid actual impropriety and any appearance of improper behaviour; and; • should avoid accepting gifts and hospitality that might reasonably be thought to influence their judgement.
4. Objectivity In carrying out their role, including making appointments, awarding contracts, recommending individuals for rewards and benefits or transacting other business, Inverness Leisure Trustees should ensure that decisions are made solely on merit. In arriving at decisions in areas where they do not have expertise themselves, Trustees should consider appropriate professional advice.
5. Accountability Inverness Leisure Trustees: • Have a duty to comply with constitutional and legal requirements and to adhere to best practice in such a way as to preserve confidence in Inverness Leisure; and; • Are accountable to the organisation members and other stakeholders for their decisions, the effectiveness of the Board and the performance of the organisation.
6. Openness Inverness Leisure Trustees should ensure that confidential information and material, including material about individuals is handled in accordance with due care; so that it remains confidential.
In addition they should be as open as possible about their decisions and the actions that they take. As far as possible, they should give reasons for their decisions and restrict information only when the wider interest clearly demands.
7. Honesty Inverness Leisure Trustees have a duty to avoid any conflict of interest so far as is reasonably practicable. In particular, they must make known any interest in any matter under discussion which creates either a real danger of bias (that is, the interest affects yourself, your family or your friends); or, which might reasonably cause others to think it could influence the decision. The Trustee should declare the nature of the interest and withdraw from the room, unless the remaining Trustees agree otherwise.
8. Leadership Inverness Leisure Trustees have a duty to promote and support these principles by leadership. For example; to maintain and strengthen trust and confidence in the integrity of the Trust in conducting business. Trustees must respect fellow members of the Board and employees of the Trust and the role they play, treating them with courtesy at all times.
9. Trustee’s Declaration I declare that: • • • • • • •
•
I am over age 18. I am not an undischarged bankrupt. I have not previously been removed from Director/Trusteeship of a charity by a court of the Office of the Scottish Charity Regulator. I am not under a disqualification order under the Company Directors’ Disqualification Act 1986. I am, in the light of the above, not disqualified by the Charities & Trustee Investment (Scotland) Act 2005 from acting as a Director. I undertake to fulfil my responsibilities and duties as a Trustee of Inverness Leisure in good faith and in accordance with the law and within Inverness Leisure’s objectives/mission. I do not have any financial interests in conflict with those of Inverness Leisure (either in person or through family or business connections) except those which I have formally notified in a conflict of interest statement. I will specifically notify any such interest at any meeting where Trustees are required to make a decision which affects my personal interests and I will, unless agreed otherwise absent myself entirely from any decision on the matter and not vote on it. I will abide by this code of practice for Trustees of Inverness Leisure.
ANNEX 6 Standing Orders: Code of Conduct at Meetings Standing Orders of the Board of Caledonia Community Leisure Limited relating to the Code of Conduct at Meetings. A.
Preliminaries
1.
Commencement These Standing Orders will apply and have effect on and after 31 July 2013.
2.
Alteration It shall not be competent to rescind or alter any of these Standing Orders unless the Board has passed a resolution following the procedure detailed in Standing Order 8.1, or where the Board has agreed at a previous meeting to consider such rescission or alteration. (For the avoidance of doubt this Standing Order cannot be suspended under Standing Order 4 below).
3.
Review The Board will review these Standing Orders each year, normally in July.
4.
Suspension of Standing Orders To suspend any of the Standing Orders, with the exception of 4, will require the consent of not less than two-thirds of the Board Members voting.
5.
Application of Standing Orders to Sub-Committees etc. The provisions of these Standing Orders will apply to all Sub-Committees of the Board as they apply to the Board.
B.
Calling Meetings/Items for Future Meetings
6.
Notice of Meetings
6.1
Generally Notice of the place, date and time of a meeting of the Board will, subject to the provisions of Standing Order 6.3 below, be given to every Trustee of the Board by or on behalf of the Company Secretary not later than the seventh day before the meeting by being delivered, posted, faxed or delivered or transmitted by other electronic means to his or her usual place of residence (or any other address stated in writing by the Trustee to the Company Secretary).
6.2
A Special Meeting of the Board will be called by the Company Secretary (a) on being required to do so by the Chairman of the Board or (b) on receipt of a requisition in writing for that purpose (i) stating the business proposed to be transacted at the meeting; and (ii) signed by at least a quarter of the membership (i.e. 3 members of the Board, the relevant number in the case of a Sub-committee being subject to a minimum of 3) and the meeting will be held within fourteen days of receipt of the requisition by the Company Secretary.
6.3
In the case of a Special Meeting called at the request of the Chairman of the Board where it appears to the Chairman that the item of business demands special urgency, the Company Secretary may call the meeting without giving the seven days’ notice specified in 6.1 above provided every effort is made to contact Trustees to give them as much notice as possible before the meeting. The Notice of Meeting will include: (a) The date, time and place of the meeting; and (b) information on the availability for inspection of the Agenda and accompanying reports.
7.
Place of Meetings
7.1
Meetings of the Board will be held at Inverness Leisure Centre, Bught Park, Inverness on the days and times fixed by the Board or at such place and time as may be otherwise fixed by the Chairman in consultation with the Company Secretary.
7.2
Meetings of the Board will be held at the Alex Sutherland Board Room, Inverness Leisure Bught Park, Inverness on the days and at the times fixed by the Board, unless agreed otherwise by the Board or by the Chairman for special reasons having consulted with the Company Secretary. The powers of the Chairman under this Standing Order include power to cancel an ordinary meeting if it appears to him or her, after such consultation, that there is insufficient business to justify the holding of a meeting.
8.
Notices of Motion etc. for Submission to Future Meetings
8.1
A Notice of Motion for submission to a future meeting of the Board will be in writing, signed by the Trustee of the Board giving Notice, counter-signed by at least one other Trustee and sent to the Company Secretary not later than 48 hours prior to the meeting of the Board concerned and no later than 5.00 pm on the final day. In calculating the notice, the day of the Board meeting will be excluded. If a Notice of Motion is late, it will be referred to the next available meeting of the Board, at the request of the Trustees involved.
8.2
Notice of Referral. The Company Secretary has the power in terms of the Scheme of Delegation to refer for further consideration by the Board by way of a Notice of Referral any decision taken which may be considered by that Officer as a contravention of law or any Code of Practice under any enactment, or maladministration leading to injustice.
C.
Attendance at Meetings: Basic Provisions
9.
Chairman
9.1
At a meeting of the Board, the Chairman of the Board or in the event of the Chairman's absence, the Vice Chairman will preside. If both the Chairman and the Vice Chairman are absent, the Company Secretary will preside until the members of the Board choose one of their number to preside.
10.
Quorum
10.1
No business will be transacted at a meeting of the Board unless at least 5 members of the Board are present. In the case of any Sub-Committee or other Group to which these Standing Orders apply, the quorum will be one quarter of the membership, subject to a minimum of 3.
10.2
If within ten minutes after the time appointed for a meeting of the Board, a quorum is not present, the Chairman will adjourn the meeting to a time he or she may then or afterwards fix and in the event of the Chairman being among those absent, the Company Secretary or her representative will record that owing to the lack of the necessary quorum no business could be transacted.
10.3
If during any meeting of the Board the attention of the Chairman is drawn to the number of members present he or she shall, unless it is apparent to him or her that a quorum is present, direct the roll to be called and if it is found that there is not a quorum present then the meeting shall end at that point.
10.4
The number of elected members of the Council or employees of the Council appointed to the Board, or in attendance at meetings, shall at no time be more than 49 per cent of the total number of Board Members or such other proportion as would at any time prevent the Company from being treated for tax purposes as a charity.
D.
Conduct of Business/Proceedings at Meetings
11.
Chairman: Powers and Duties
11.1
Deference shall at all times be paid to the authority of the Chairman and on all points of order, competency and relevancy, his or her ruling shall be final and not open to discussion. This includes discretion to rule on all questions of procedure where no express provision is made under these Standing Orders. It is the duty of the Chairman to preserve order and to ensure that Trustees obtain a fair hearing. In the event of disorder, the Chairman has absolute discretion to adjourn the meeting, and by quitting the Chair will bring the meeting to an end. In the event of this happening, the meeting will be reconvened by the Company Secretary for an alternative date.
11.2
In the absence of the Chairman, all powers and duties of the Chairman in terms of these Standing Orders shall be exercised by the Vice Chairman. If the Chairman or Vice Chairman are not present the Trustees shall choose one of their number to preside over that meeting as Chairman.
12.
Sederunt The Company Secretary, or a member of staff acting as Clerk to the Meeting, will record the names of the Trustees present at each meeting of the Board, as well as those who have submitted apologies for absence.
13.
Urgent Business
13.1
Except in the case of business brought before the meeting which is certified by the Chairman as urgent, no business will be transacted at a meeting of the Board other than that specified on the Agenda for the meeting.
13.2
It shall be in the sole discretion of the Chairman to decide whether any business not specified on the Agenda for the meeting should, by reason of special circumstances, be considered at the meeting as a matter of urgency, and such special circumstances must be specified in the Minutes of the Meeting.
14.
Order of Business/Adjournment The business of a meeting of the Board shall be conducted in the order set out on the Agenda for the meeting, provided that any item of business may, with the consent of the meeting, be taken out of its place. The Chairman may with the consent of the meeting also adjourn the meeting to any other day, time and place.
15.
Declaration of Interest
15.1
It shall be for any Trustee who has declared any financial interest in any matter and is present at a meeting of the Board at which such matter is the subject of consideration, to leave the room before the matter is discussed.
15.2
It shall be for any Trustee who has declared any other interest in any matter and who is present at a meeting of the Board at which such matter is the subject of consideration, to determine whether or not to leave the room, or to participate in discussion or voting, in accordance with the Code of Conduct.
16.
Obstructive or Offensive Conduct In the event of any Trustee at a Board meeting disregarding the authority of the Chairman or of being guilty of obstructive or offensive conduct, a motion may be moved and seconded to suspend such Trustee for the remainder of the sitting. Such a motion will be put to the meeting without discussion and if supported by a majority of Trustees of the Board present and voting will be declared carried. The offending Trustee will then be required by the Chairman to leave the meeting.
17.
Order of Speeches A Trustee wishing to speak will attract the Chairman's attention by raising his or her hand, and when called upon will address the Chair. The Trustee will direct his or her speech strictly to the matter under discussion or to the Motion or Amendment to be proposed or seconded by himself or herself or to a question of order.
The Chairman will decide between two or more Trustees wishing to speak by calling on the Trustee whom he or she first observed to raise his or her hand. 18.
Motions and Amendments: General
18.1
All Motions and Amendments arising at a meeting will be moved and seconded. A member cannot move or second both the Motion and an Amendment or more than one Amendment upon a Motion. Motions or Amendments which are not seconded will not be discussed.
18.2
If a Motion which is specified on the agenda for the meeting (under Standing Order 8.1) is not moved by the Trustee who has given the notice and seconded, then it will, unless moved by another Trustee and seconded on the day, or postponed with the agreement of the Board, be considered as dropped and cannot be moved again without fresh notice.
18.3
It will not be competent for a Trustee to move or second his or her own election or appointment as Chairman or Vice Chairman of the Board or any Sub-Committee or other Group or as a representative of the Board on any similar or outside body. This does not prevent a Trustee when such election or appointment is under consideration from indicating his or her interest in being nominated for election or appointment.
18.4
A Motion or Amendment once moved and seconded will not be withdrawn without the consent of the mover and seconder, and then only with the sanction of the meeting.
19.
Voting: Order of Motions and Amendments When only one amendment is made upon a Motion, the vote will be taken between the Amendment and the Motion. Where there is more than one Amendment, generally the Amendment last proposed will be put against the immediately preceding one, and the Amendment which is carried will be put against the next preceding, and so on until only one Amendment remains and the vote will be taken between that Amendment and the original Motion. However, particularly in relation to composite Motions, the Chairman may decide that Amendments be taken individually against the Motion. After the vote between an Amendment and the Motion whichever is carried will be the decision of the Meeting.
20.
Voting: Election, Selection or Appointment of Trustees to any Particular Office or Committee
20.1
In the case of an Election, Selection or Appointment of Trustees of the Board to any particular office, Sub-Committee or other Group or as a representative of the Board on an outside body, where the number of candidates nominated exceeds the number of vacancies, the Trustee(s) to be elected, selected or appointed as the case may be, shall be determined by vote. Trustees voting shall be entitled to cast as many votes as they wish up to the number of vacancies available.
20.2
Where only one vacancy requires to be filled the vote will normally be by ballot but may be by a show of hands and any candidate having an absolute majority of the votes cast shall be declared duly elected, selected or appointed as the case may be. Where more than one vacancy requires to be filled and the number of candidates nominated exceeds the number of vacancies, the vote shall be by ballot, the name of the candidate having least votes being struck out of the list of candidates. Such process of elimination by vote by ballot shall be continued until in a case where only one vacancy exists any candidate has an absolute majority of the votes cast, or in any case until the number of candidates remaining equals the number of vacancies when the candidate or candidates remaining shall be declared duly elected, selected or appointed as the case may be.
20.3
If in any ballot among more than two candidates there is equality in votes among the candidates having least votes, the candidate whose name shall be eliminated shall be determined by an additional vote by ballot and unless there again be equality in votes, the name of the candidate having least votes shall be struck out of the list.
20.4
Where in any vote between two candidates or in such additional vote by ballot there is equality in votes, the candidate to be selected or appointed or eliminated (as the case may be) shall be determined by lot.
21.
Voting: Appointment of Staff Where there is Trustee involvement in staff appointments, staff will be appointed in the same manner detailed in Standing Order 21 for the election, selection and appointment of Trustees to any particular post or office or Sub-Committee except that where applicants for appointment to any particular post or office are being interviewed by a Sub-Committee or Appointments Panel, the members of the appointing body will be entitled to participate in the voting for that appointment only if they have been present throughout all of the interviews. A further exception applies in relation to equality of votes, as is laid down in Standing Order 21.3.
22.
Method of Voting
22.1
The vote of the Board, including ballots referred to in Standing Order 21 and the recording of abstentions, will normally be taken by show of hands.
22.2
If any member objects to the vote being taken by show of hands and a majority of the Trustees of the Board present and voting signify their support of the objection, the vote will be taken by calling the roll or by paper ballot.
22.3
All votes on procedure will be taken by show of hands.
23.
Casting Votes
23.1
The Chairman or the Trustee presiding in his or her absence in accordance with Standing Order 9 shall in the case of an equality of votes give the casting vote.
23.2
In the case of the election, selection or appointment of Trustees to any particular office or Sub-Committee in terms of Standing Order 21, in any case of equality of votes between candidates as described in Standing Order 21.4 the Chairman or member presiding in his or her absence will not have a casting vote but the candidate to be elected, selected, appointed or eliminated as the case may be will be determined by lot.
23.3
For the avoidance of doubt, in the case of the appointment of a member of staff to a post as described in Standing Order 22 where in any vote between candidates there is equality in voting the Chair will exercise a casting vote in determining the candidate to be selected or (in the case of an additional vote) to be eliminated in terms of Standing Order 21.4.
24.
Recording of Dissent from Decision A member of the Board may have his or her dissent recorded to a decision of the Board provided that he or she has moved a Motion or Amendment and failed to find a seconder or else has taken part in a vote provided that such member asks immediately after the item is disposed of that such dissent be recorded.
25.
Minutes of Board Meetings All Minutes of the proceedings of the Board in which will be recorded the names of the Trustees who attended the meetings will be drawn up by or on behalf of the Company Secretary and so far as practicable issued to Trustees of the Board not later than the fourth day before the next ensuing ordinary meeting at which they will be submitted, held as read, corrected if need be, and where held to be a true record of the proceedings to which they relate will be signed by the person who presided at the previous meeting or who presides at the meeting when the Minutes are approved.
26.
Decisions of Sub-Committees and Submission of Minutes
26.1
A Sub-Committee may carry into effect any decision on the following without the necessity of first having reported this to the Board:(a)
a matter included in the delegation to the Sub-Committee or remitted with powers to the Sub-Committee;
(b)
a matter remitted with full delegated powers to the Sub-Committee which may be implemented immediately;
(c)
any matter which in the opinion of the Sub-Committee is one of urgency on the understanding that, even though not included in the Annual budgets, the decision does not involve major expenditure and has the approval of the Chairman of the Sub-Committee; and
(d)
any routine matter not involving a change of policy.
26.2
The Minutes of Meetings of Sub-Committees will be submitted for confirmation as correct records of the proceedings to the next ordinary meeting of the Sub-Committee by the Chair of each Committee (whom failing the Vice-Chair) (a) for information in respect of business delegated or remitted with powers and (b) for approval in respect of matters referred.
26.2
The Minutes of Meetings of Sub-Committees will be submitted to the Board for information and scrutiny.
E.
Miscellaneous
27. Vacation of Office by Failure to Attend Meetings 27.1
If a Trustee of the Board fails throughout a period of six consecutive months to attend any meeting of the Board, he or she will unless the failure was due to some reason approved by the Board, cease to be a member of the Board.
27.2
Attendance as a Trustee at a meeting of any Board or Sub-Committee of the Board or other body by whom for the time being any of the functions of the Board are being discharged, and attendance as representative of the Board at a meeting of any body of persons, will be deemed to be attendance at a meeting of the Board.
28.
Company Code of Practice All Trustees of the Board will be bound by the provisions of the Company Code of Practice.
Caledonia Community Leisure Limited Structure Permanent Sub-Committees Finance & Executive
Building & Technical
Governance Review
Remuneration
(Quarterly)
(Quarterly)
(Annually)
(Triennially)
Catering
Gym Refurbishment
Board
HR Standards
Appeals Ad-Hoc
HR Standards
Appeals Ad-Hoc
Catering
Gym Refurbishment
(Triennially)
(Annually)
(Quarterly)
(Quarterly)
Board
Remuneration
Governance Review
Building & Technical
Finance & Executive
Permanent Sub-Committees
Caledonia Community Leisure Limited Structure
ANNEX 7
FINANCE & EXECUTIVE SUB-COMMITTEE TERMS OF REFERENCE FREQUENCY OF MEETINGS:
Quarterly
CHAIRPERSON:
Company Vice-Chair
GROUP MEMBERSHIP:
2 Community Business Trustees 2 User Trustees 1 Elected Member Trustee (shared)
OFFICIAL IN ATTENDANCE:
Company Secretary Chief Executive Head of Finance & Administration Highland Council Liaison Officer
QUORUM:
3 voting members
Sub-Committee Objectives To be responsible for monitoring, scrutinising and challenging management on all aspects of the Company’s financial performance such as performance management, staffing costs, capital expenditure etc. To assist the Senior Management Team in setting the financial budgets that will allow the Company to achieve its business targets as well as offering advice, support and guidance to the Management team. The Sub-Committee will also consider the appropriate allocation of funds for nonbuilding and technical purchases up to the value of £25,000 providing it is supplied with a minimum of three competitive quotations. To recommend the appointment of the Company’s External Auditors. Thereafter to comprehensively scrutinise and challenge the business’s annual accounts received from the Company’s External Auditor and when satisfied make subsequent recommendations for approval to the Board of Trustees. To review the Company’s Finance Handbook and monitor the integrity of the Company’s internal auditing processes as well as to ensure an up-to-date Company Risk Register is in place and being implemented by Management. To be the main conduit with the Board of Trustees with regard to financial matters and to ensure that Finance & Executive business is reported back to other Trustees. To annually appoint a Risk Register Liaison Representative. Other responsibilities In conducting its business, the Sub-Committee must be mindful of the Company’s financial position, Business Plan; Vision & Values; Policies, Procedures and Handbooks along with any other relevant Company documents and strategies at any particular time. Finance & Executive Members will agree to attend training and meetings which may support or enhance their service on the Committee and Company in general. 5 July 2013
BUILDING AND TECHNICAL SUB-COMMITTEE TERMS OF REFERENCE FREQUENCY OF MEETINGS:
Quarterly
CHAIRPERSON:
Selected from the Sub-Committee membership
GROUP MEMBERSHIP:
2 2 1 1
OFFICIAL IN ATTENDANCE:
Head of Operations Building & Technical Manager Highland Council Liaison Officer
QUORUM:
3 voting members
Community Business Trustees User Trustees Elected Member Trustee (shared) Associate Advisor (non-voting)
Sub-Committee Objectives To be responsible for major Capital works being undertaken in and around Inverness Leisure and to be the key Company link with the Landlord in this respect. To prioritise the larger-scale building and maintenance works (non-capital) associated with the facilities under the management of the Company. The Sub-Committee will also consider the appropriate allocation of funds for larger-scale maintenance works up to the value of £25,000 providing it is supplied with a minimum of three competitive quotations. To monitor health and safety and analyse faults and breakdowns in service throughout the Inverness Leisure facilities and how these are being managed. To work with facility management to ensure all aspects of building and technical health and safety are complied with at all times. To be the main conduit with the General Board of Trustees with regard to maintenance, building and technical matters and to ensure that BTEC business is reported back to other Trustees. To annually appoint a Health and Safety Liaison Representative. Other responsibilities In conducting its business, the Sub-Committee must be mindful of the Company’s financial position, Business Plan; Vision & Values; Policies, Procedures and Handbooks along with any other relevant Company documents at any particular time. BTEC Members will agree to attend training and meetings which may support or enhance their service on the Committee and Company in general. 3 July 2013
GOVERNANCE REVIEW SUB-COMMITTEE TERMS OF REFERENCE FREQUENCY OF MEETINGS:
Minimum of annually
CHAIRPERSON:
Company Chair
GROUP MEMBERSHIP (VOTING):
1 1 1 1
IN ATTENDANCE (NON-VOTING):
Chief Executive Company Secretary
QUORUM:
3 voting members
Community Business Trustee Elected Member Trustee User Trustee Associate Advisor (Advisory, non-voting)
Sub-Committee Objectives To review the effectiveness of the Board and Sub-Committees and the appropriate Governance of the same. To be responsible for ensuring that the Company’s Governance processes, procedures and documentation is regularly reviewed and in line with the Company’s current business objectives and needs. To be responsible for undertaking said review in consultation with the Company Secretary and Chief Executive. To take legal advice where necessary to ensure the Company’s governance processes are fully in line with current legislation and have the delegated authority of the Board to do so up to a value of £5,000. To ensure that all Board Trustees and Senior Officials are fully conversant with the Company’s governance expectations and requirements. To identify and/or review the training needs of the Board. To ensure that Company Officials are maintaining a register of Policies and Procedures and to review the register no less than triennially. Other responsibilities In conducting its business, the Sub-Committee must be mindful of the Company’s financial position, Business Plan; Vision & Values; Policies, Procedures and Handbooks along with any other relevant Company documents and strategies at any particular time.
3 July 2013
REMUNERATION SUB-COMMITTEE TERMS OF REFERENCE FREQUENCY OF MEETINGS:
As and when required Minimum of triennially (salary review)
CHAIRPERSON:
Company Chair
GROUP MEMBERSHIP (VOTING):
Chair of Finance & Executive Committee 1 Trustee (not an F&EC member)
IN ATTENDANCE:
Company Secretary Chief Executive*; Head of Operations*; Head of Finance & Administration*
QUORUM:
3 voting members
Sub-Committee Objectives To be responsible for recommending the Company’s salary settlement for all Associates (generally triennially); The Company process for considering Associates’ salary re-grading applications is as follows: o Associate makes re-grading application to Section Head; o Section Head will consider the application and make a formal recommendation to the Chief Executive; o The Chief Executive will consider the recommendation and uphold or reject the re-grading application (in consultation with the Company’s Employment Law Advisors); o The Remuneration Sub-Committee will act as: The appeal body for any decisions taken by the Chief Executive. Where a Senior Management re-grading is presented, the Remunerations SubCommittee will assume the responsibility of the Chief Executive, as the Chief Executive will have assumed the role of the Section Head. The Appeal Sub-Committee would hear any appeal against a decision reached by the Remuneration Sub-Committee. Other responsibilities In conducting its business, the Sub-Committee must be mindful of the Company’s financial position, Business Plan; Vision & Values; Policies, Procedures and Handbooks along with any other relevant Company documents and strategies at any particular time. *Where asked to be in attendance by the Sub-Committee Chair.
3 July 2013
HR STANDARDS/APPEALS SUB-COMMITTEE TERMS OF REFERENCE FREQUENCY OF MEETINGS:
As and when required
CHAIRPERSON:
Elected from within the membership
GROUP MEMBERSHIP:
1 Community Business Trustees 1 User Trustees 1 Elected Member Trustee Chair & Vice Chair will not sit on either Sub-Committees Only members of the Committee are entitled to attend meetings
OFFICIALS IN ATTENDANCE*:
Company Secretary
This document is a combined terms of reference for the HR Standards Committee and the Appeals Committee. Although they have the potential to be related they are each individual committees in their own right.
Sub-Committee Objectives The HR Standards Sub-Committee will be responsible for undertaking formal investigations into the performance and standards of Senior Management where necessary. The HR Standards Sub-Committee will undertake any formal disciplinary procedures against Senior Management where it is deemed necessary. The HR Standards Sub-Committee will consider any formal grievances against the Chief Executive. The Appeals Sub-Committee will act as the Appeals ‘Officer’ for any applications against an HR related decisions taken by the Chief Executive. At all times both Committees will work with the Company’s Employment Law Advisors* through the Company Secretary in order to ensure that both they and the wider Company operates within current HR legislative parameters. Other responsibilities The Sub-Committee will commit to observing the confidentialities of the matters being considered and will neither discuss beyond the membership of the Sub-Committee nor outside the meeting(s) including fellow Trustees or members of staff. At any time advice can be sought from the Company Secretary. In conducting its business, the Sub-Committee must be mindful of the Company’s financial position, Business Plan; Vision & Values; Policies, Procedures and Handbooks along with any other relevant Company documents and strategies at any particular time. HR Standards/Appeal Sub-Committee members will agree to attend training and meetings which may support or enhance their service on the Committee and Company in general. *The Sub-Committees have the full delegated authority of the Board to invite the Company’s Employment Law Advisors to attend any/all of the meetings.
5 July 2013
MISSION STATEMENT & CUSTOMER PROMISE OUR MISSION STATEMENT “Putting our people first by delivering our Customer Promise all the time”
CUSTOMER PROMISE “At Inverness Leisure we will put our customers first by… Welcoming everybody into a safe, clean and friendly environment… “A welcoming smile and a clean and safe environment will be the rule, not the exception”
Listening and responding to your needs… “Having asked you for your opinion, we will strive to meet and exceed your needs”
Offering value for money products and services at all times…
Providing qualified, motivated and willing Associates
“Value for money does need to mean ‘cheap and cheerful’ – value and quality is our aim”
“You expect a high standard from our facility and our excellent associates will deliver that standard”
Encouraging all of our associates to take ownership of our facility…
Being honest – if we get it wrong we will admit it and do all we can to correct it quickly…
“By asking for input when developing our policies, programmes and procedures we involve our Associates in the innovation and development of our facility”
“We will admit our mistakes and rather than try to make excuses, we will do our utmost to correct those mistakes as soon as possible and ensure they do not happen again”
VISION & VALUES OUR VISION “To provide a facility that is safe, clean and enjoyable for our Customers and Associates”
OUR VALUES Excellent Customer Service
A Can Do Attitude
“We are committed to positive relations with our Customers and Associates by striving to meet and, wherever possible, exceed expectations”
“Through training and development our Associates are willing and able to take decisions they believe will improve Customer’s visits to our facility”
Teamwork
Open and Honest
“Our Associates work in an organisation which is clearly defined, motivating and developing with rewarding and challenging opportunities”
“We are committed to keeping our Customers and Associates fully aware of developments within our organisation that may affect them, with a willingness to use all possible channels of communication”
Respect
Commitment to Our Community
“By promoting trust, sensitivity, understanding and the willingness to listen to our Customers and Associates”
“To be seen as trendsetting, innovative and developing opportunities to enhance the quality of life, health, leisure and sporting activities within our facility and the wider community”
6 July 2012
OSCr
Office of the Scottish Charity Regulator
Guidance for Charity Trustees ‘acting with care and diligence’
4
OSCr
OSCR is grateful to the following people for their support and assistance in producing this guidance: Pat Armstrong Les Bell Colin Liddell Andrew Jackson Lucy McTernan Helen Munro Shirley Otto Elaine Parr John Robertson Selina Ross
OSCr
Office of the Scottish Charity Regulator
Contents Page Section 1
Introduction 1.1 The guidance 1.2 Who is this guidance for? 1.3 How to use the guidance
1 1 1 1
Section 2
The charity trustees 2.1 Who are charity trustees? 2.2 The “shadow trustee” 2.3 Disqualification
3 3 3 3
Section 3
What is expected of charity trustees – general duties 3.1 The duties of charity trustees 3.2 The general duties of charity trustees 3.3 Acting in the interests of the charity 3.4 Operating in a manner consistent with the charity’s purposes 3.5 Acting with care and diligence 3.6 Compliance with the Act and other legislation 3.7 Collective or corporate responsibility
5 5 5 5 7 7 8 9
i Section 4
What is expected of charity trustees – specific duties 4.1 Charity details on the Scottish Charity Register 4.2 Reporting to OSCR 4.3 Financial records and reporting 4.4 Fundraising 4.5 Providing information to the public
10 10 10 12 13 15
Section 5
Charity trustee remuneration 5.1 What is remuneration? 5.2 Conditions for remuneration 5.3 Exemptions from the conditions for remuneration 5.4 Examples of remuneration 5.5 Trustee indemnity insurance
16 16 16 17 17 18
Section 6
Investment powers of trustees
19
Section 7
Breach of duty
21
Section 8
Checklist of duties and responsibilities with examples of good practice
22
Section 9
Sources of advice and support 9.1 Websites 9.2 Publications and other resources
26 26 27
Annex 1
Section 66 of the Charities and Trustee Investment (Scotland) Act 2005
29
Guidance for Charity Trustees ‘acting with care and diligence’
ii
1
OSCr
Office of the Scottish Charity Regulator
Section 1 Introduction 1.1 The guidance The Charities and Trustee Investment (Scotland) Act 2005 (referred to as “the Act”) establishes a new, comprehensive and coherent regulatory framework for charities in Scotland. The Act establishes the Office of the Scottish Charity Regulator (known as “OSCR”) as the statutory regulator of the charity sector, with enhanced powers and responsibilities, including the responsibility for facilitating and encouraging compliance with the new legislation. This guidance is one in a series of publications which are intended to assist charity trustees and others to navigate their way through the principles and the specific requirements of the new legislation. The focus in this guidance is on the duties and responsibilities of charity trustees in Scotland. It also offers examples of good practice in the governance of charities which should help charity trustees fulfil their duties and responsibilities.
1.2 Who is this guidance for? This guidance is for trustees of all Scottish charities, i.e. organisations entered in the Scottish Charity Register maintained by OSCR. Depending on the individual charity and its legal form, the charity trustees may be called board members, directors, management committee members, trustees or whatever is relevant to the charity. Whatever the terminology used by the charity, for the purposes of the legislation, the group of people who manage and control the charity are known as “charity trustees”. The term “charity trustee” will be used throughout this guidance. The guidance is written principally with the charity trustees of small to medium-sized charities in mind (i.e. charities with an income below £500,000) because they make up the great majority of charities in Scotland.1 However, the guidance should also prove useful to charity trustees of larger charities.
1.3 How to use the guidance The key reason for providing this guidance is to assist charity trustees to understand what is expected of them, as individuals and collectively, under the Act. The guidance is intended to be used in a number of ways: • as a document for a charity’s trustees to read, so as to ensure they know about their duties and understand their legal responsibilities. This would be especially important when an organisation applies to join the Scottish Charity Register • as part of the information prepared for new or potential charity trustees, for example as part of an induction pack • as the basis for handouts and other resource material for use in training courses on governance in charities This guidance can both be used as a reference to help with particular questions and concerns, or it can be read all the way through.
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‘Scottish Charities 2005’ OSCR 2006
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Guidance for Charity Trustees ‘acting with care and diligence’
The guidance covers eight topics, presented in separate sections: • who are charity trustees? This includes who may qualify and who are disqualified • the general duties of charity trustees as required by the new charity legislation • the specific duties of charity trustees as required by the new charity legislation • charity trustee remuneration (i.e. payments or benefits in kind given to charity trustees other than for out-of-pocket expenses) • the investment powers of trustees of trusts, including charitable trusts • the consequences of misconduct or “breach of duty” or if the requirements of OSCR are persistently not met • a checklist of duties and responsibilities linked to practical examples of good practice • suggestions as to where to obtain more information and assistance This guidance focuses on what charity trustees must do to comply with the law. However, at various points examples of good practice are highlighted to help charity trustees identify how they can fulfil their duties and responsibilities.
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OSCr
Office of the Scottish Charity Regulator
Section 2
The charity trustees
2.1 Who are charity trustees? There are many different types of organisation which can be charitable, for example a company, a trust or a voluntary association. The people who make up the governing body which controls these organisations can be called by different names, e.g. directors, trustees, management committee members or even quite simply committee members. Whatever their title, if their organisation is a charity and they have “general control and management” of it, no matter how they have been appointed or elected, these people are defined by the Act as being a “charity trustee”. Therefore the duties, responsibilities and liabilities of “charity trustees” within the meaning of the Act apply to them. The rules relating to legal capacity or the authority to act on behalf of an organisation as a charity trustee are complicated. If a charity is proposing to appoint or elect a charity trustee under the age of 16, or about whom there is doubt regarding their capacity to act, the charity should seek legal advice on the particular circumstances. This area is governed by legislation other than the 2005 Act.
2.2 The “shadow trustee” The Act states that charity trustees are the people who have “the general control and management” of a charity. However, there can be situations in which one or more people who are not formally appointed as charity trustees can exercise influence and even control over a charity. Such people may be considered as “shadow trustees”. An example might be where an elected member or employee of a local authority attends meetings of the charity trustees. In determining whether they may be a “shadow trustee”, charity trustees will need to consider the degree of participation and influence these people have at meetings. The Act makes the following two points clear: • first, charity trustees are responsible for the charity and may not pass this responsibility onto anyone else as long as they remain a charity trustee • secondly, any person who, though not formally elected or appointed as a charity trustee, exercises some degree of control over a charity, may nevertheless be held legally liable as a charity trustee
2.3 Disqualification The constitution or governing document of a charity should specify who is eligible to be elected or appointed to the governing body. However, under section 69 of the Act the following are disqualified from acting as charity trustees: • someone with an unspent conviction for dishonesty or an offence under the Act • an undischarged bankrupt • someone who has been removed under either Scottish or English Law or the courts from being a charity trustee • a person disqualified from being a company director It is the responsibility of individual charity trustees to ensure they personally are not disqualified from being a charity trustee.
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Guidance for Charity Trustees ‘acting with care and diligence’
It is also in the interests of the charity for the charity trustees collectively to ensure that no charity trustees are disqualified from being a charity trustee. Anyone who acts as a charity trustee whilst disqualified is guilty of an offence punishable by a fine or imprisonment, or both. The disqualified person may apply to OSCR for a waiver to lift the disqualification generally, or in relation to a specific charity or type of charity. However, a waiver lifting a disqualification will not be given lightly by OSCR. Examples of good practice • Prospective charity trustees sign a form before their election or appointment to confirm they are not disqualified from acting as a charity trustee. • Consider whether any other checks need to be carried out. This may be particularly relevant for charity trustees working with vulnerable beneficiaries where there are likely to be requirements under other legislation.
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Office of the Scottish Charity Regulator
Section 3 What is expected of charity trustees – general duties 3.1 The duties of charity trustees As noted above, charity trustees are defined as those responsible for “the general control and management of the administration of a charity” and they carry out these functions within the context of the charity’s legal framework. This does not mean that charity trustees necessarily undertake day-to-day operations; some charities may have staff who do this. However, charity trustees, irrespective of the employment of staff, are and remain responsible for the governance and strategy of the charity. It is the principal duty of charity trustees to maintain general overall control of the charity. They need to ensure that the charity is administered effectively, and is able to account for its activities and outcomes both to OSCR and to the public. The Act defines: • four general duties which are fundamental to charity trustees carrying out their role. These are described in more detail in sections 3.2 to 3.6 below • a number of more specific duties with which charity trustees must comply. These are described in more detail in section 4
3.2 The general duties of charity trustees Section 66 (see Annex 1) of the Act describes four general duties of charity trustees which are fundamental to their role as a charity trustee. Charity trustees are required to comply with these while carrying out their functions as a charity trustee. A charity trustee must: • act in the interests of the charity • seek, in good faith, to ensure that the charity operates in a manner that is consistent with its objects or purposes • act with the care and diligence that it is reasonable to expect of a person who is managing the affairs of another person • ensure that the charity complies with the provisions of this Act, and other relevant legislation The rest of this section explains in more detail what are the implications of these principles for charity trustees, both as individuals and as a group.
3.3 Acting in the interests of the charity Charity trustees are expected to put the interests of the charity before their own interests or those of any other person or organisation. Three possible scenarios which may give rise to conflicts of interest are described here along with how they should be resolved. They should not be seen as the only areas where conflicts of interest can arise, but are provided as examples of the most common.
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Guidance for Charity Trustees ‘acting with care and diligence’
First, individual charity trustees should avoid circumstances in which there is a conflict between their personal interests and those of the charity. Where there is such a conflict, they must put the charity’s interests first. An example might be where the charity trustee has a connection with a company that may be awarded a contract by the charity. It would be good practice for the charity trustee to make the conflict of interest known to the other charity trustees, and not take part in any discussion or decision-making on this matter. Secondly, where a charity trustee is faced with a conflict of interest between the interests of the charity and those of a person or organisation responsible for their appointment as a charity trustee, the interests of the charity must come first. The charity trustee must act in the interests of the charity to which they have been appointed, not in the interest of the person or organisation which appointed them, for example a local authority or another charity. If in relation to a particular issue the conflict of interest is irreconcilable, then the charity trustee in question must make this known to the other charity trustees, and not take part in any discussion or decision-making on the issue. An example might be when a charity trustee has been appointed by an organisation which pays rent to the charity. It may be in the charity’s best interest to raise the rent. However, the appointing organisation has an interest in the rent being set as low as possible.
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Thirdly, there may be the possibility of a conflict of interest between the concerns of two different organisations to which a charity trustee is affiliated. The trustee should declare the conflict of interest to the other charity trustees, and refrain from participating in any discussion or decisionmaking process about the subject in question. An example might be where a charity trustee is a member of two different organisations which are applying to the same trust for a grant. The conflict of interest should be disclosed (while respecting the confidentiality of both organisations) and the charity trustee should not take part in any discussion or decision-making. It is not only the responsibility of individual charity trustees to act only in the interests of the charity and avoid conflicts of interest, but also the duty of their fellow charity trustees to take reasonable steps to ensure that they do so. Collectively the charity trustees must also take all reasonable steps to make sure that a trustee who has acted improperly in relation to a conflict of interest corrects the situation and does not repeat the offence. The Act makes clear that if a charity trustee is in serious or persistent breach of these requirements, then it is the responsibility of all the other charity trustees to initiate procedures for removing them from their position as trustee. Examples of good practice • Charity trustees declare any conflict of interest and do not take part in any discussion or decision on the matter • Maintain an up-to-date register of each charity trustee’s interests • Agree a code of conduct for managing conflicts of interest • Review the constitution to ensure the power to remove charity trustees who are in serious or persistent breach of the Act is available
OSCr
Office of the Scottish Charity Regulator
3.4 Operating in a manner consistent with the charity’s purposes Charity trustees should carry out their duties in accordance with the specific terms of their charity’s constitution or governing document. The constitution or governing document will set out the aims of the charity and the powers it has to act, and will include provisions for how the charity is to be run. Charity trustees must ensure that: • all the activities of the charity fall within the objects, aims or purposes as stated in the constitution or governing document of the charity • the charity adheres to the terms of its constitution or governing document • the charity’s assets are only used for the charitable purposes set out in the constitution or governing document Examples of good practice • All charity trustees have a copy of and are familiar with the charity’s constitution or governing document • An induction pack is given to all new charity trustees which includes the constitution or governing document, up-to-date information about the activities of the charity and any statement of the values of the charity • Board and staff refer to the charity’s purposes when developing and agreeing strategic plans
3.5 Acting with care and diligence The Act makes clear that charity trustees must take such care of the charity’s affairs as is reasonable to expect of someone who is managing the affairs of another person. This means that a charity trustee would be expected to take even more care than they would if acting on their own behalf. Acting with care and diligence would mean that charity trustees: • ensure the charity is run properly, responsibly and lawfully • ensure the charity is solvent • act as guardians of the charity’s assets • ensure the board is “fit for purpose” and the charity trustees are working together • apply a duty of care to paid staff and volunteers It is OSCR’s view that acting with care and diligence would also mean that charity trustees must exercise reasonable business sense in concluding any contracts on behalf of the charity. These contracts would include funding agreements with central or local government as well as grant-providers. Taking a reasonable business approach would include having a considered view on whether the costs of a particular project are fully covered and what would be the possible consequences of going ahead if they are not. It would be reasonable for charity trustees to take appropriate professional advice, e.g. from solicitors or accountants. Charity trustees should also be prepared to consider what action to take in order to protect the charity’s assets. These assets would include, for example, the charity’s name and any intellectual property such as a recognisable logo.
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Guidance for Charity Trustees ‘acting with care and diligence’
The Act does not impose a higher standard on “professionals” who are charity trustees, e.g. solicitors or accountants. These charity trustees are expected to demonstrate the same standard as it is reasonable to expect of other charity trustees. However, “professional” trustees may be covered by other legislation which may impose a higher standard, for example, on the professional directors of charitable companies. Examples of good practice • Agree and regularly review the strategy and policies of the charity • Agree financial delegation, agree budgets, and monitor financial performance • Agree framework for support and management of paid staff and volunteers • Ensure procedures are in place to keep up-to-date with legal responsibilities, e.g. employment legislation • Agree expectations of charity trustee attendance at meetings and what to do if these are not met • Annually review the progress and effectiveness of the charity and agree priorities for improving performance • Issue charity trustees’ induction pack identifying role, responsibilities and liabilities, and the remit of any sub-committees
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• Agree and implement programme for charity trustee training, board building and renewal • Agree and apply process for managing serious differences between charity trustees, and between charity trustees and staff • Take professional legal or financial advice if required
3.6 Compliance with the Act and other legislation Charity trustees must ensure that the charity complies with the provisions of the Act and with the requirements imposed by other relevant legislation or regulators, for example: • health and safety law and regulations • company law in the case of charitable companies • data protection law • employment law if employing staff The Act specifically requires charity trustees to make certain that the charity complies with any direction, requirement, notice or duty imposed on it by the Act. Not to do so (for example by not sending in annual accounts or OSCR’s Annual Return) is technically a breach of charity trustee duty. See section 4 for more information on the specific duties under the Act. OSCR will encourage and facilitate compliance by issuing general guidance (such as this guidance), by consulting widely on proposals for change and by offering advice where it detects errors and failures. It will generally use its powers of intervention only where this is a reasonable response to instances of breach and misconduct. For further information see section 7.
OSCr
Office of the Scottish Charity Regulator
3.7 Collective or corporate responsibility Charity trustees as a body are collectively or corporately responsible for all the activities of the charity. This means that all charity trustees are equally accountable for their organisation. They have a collective general duty of care for the charity, and they must all observe the requirements of the Act. Charity trustees are expected to act together as a board or committee to realise the values and purposes of the charity and to comply with legislative and regulatory requirements. Generally, charity trustees cannot delegate their responsibilities to others, although they can delegate some of their functions. So, for instance, sub-committees, operational volunteers or paid staff may well perform tasks and activities associated with these responsibilities. However, ultimate accountability remains with the charity trustees. For example, OSCR requires that a charity trustee must sign the Annual Return - not a member of staff. It is also the charity trustees who are responsible for approving the accounts. If a charity trustee fails in his or her duty, it is the obligation of the other charity trustees to take reasonable steps to ensure that the misconduct is rectified and not repeated. They also need to ensure that anyone guilty of serious or persistent misconduct or breaches of their duties no longer remains a charity trustee. Examples of good practice • Charity trustee misconduct procedures formulated and applied • Review constitution or governing document to ensure the power to remove charity trustees is available where there is serious or persistent breach of the Act • Agree expectations of charity trustee attendance at meetings and what to do if these are not met
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Guidance for Charity Trustees ‘acting with care and diligence’
Section 4 What is expected of charity trustees – specific duties In addition to the general duties of charity trustees outlined in section 3, the Act also puts additional specific duties on charities which charity trustees must ensure are met. These additional duties relate to the following: • charity details on the Scottish Charity Register • reporting to OSCR • financial record keeping and reporting • fundraising • providing information to the public
4.1 Charity details on the Scottish Charity Register The Act requires OSCR to maintain a Register of Scottish Charities. The Register must contain: • the name of the charity • the principal office or the name and address of one of the charity trustees (unless OSCR is satisfied it is necessary to protect an individual or the charity's premises) • the charity's purposes • certain other information (including whether it is a designated religious charity or national collector)
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The Register will be available for public inspection at realistic times at OSCR’s principal office. OSCR will also use its website to make the Register widely and freely available. OSCR may also provide information from the Register in Braille, large print, or other mediums as requested. OSCR may charge a fee for this service which will not exceed the cost of supply.
4.2 Reporting to OSCR The Act requires charities on the Register to supply certain information to OSCR. Compliance with this requirement is a statutory duty, and it is central to the new regulatory regime. An accurate Register is the key to transparency, and underpins public understanding and confidence in Scottish charities. Basic information When applying to register as a Scottish Charity, applicants must supply basic information for the Register. As individuals, charity trustees must sign a declaration that they understand their duties. Thereafter, charity trustees are responsible for ensuring that the details on the Register remain accurate and charities must notify OSCR of any change to the information set out in the Charity’s entry in the Register. Annual and Monitoring Returns Every year, charities will be issued with an Annual Return, which will already have in it the Register entry information. In addition, charities with a gross income of £25,000 or above will receive a supplementary Monitoring Return. This will seek additional information for example about their: • annual accounts • fundraising activities
OSCr
Office of the Scottish Charity Regulator
• remuneration agreements with trustees • dealings with connected trading companies Every charity must file the signed Annual Return, supplementary Monitoring Return (if appropriate) and annual accounts with OSCR within 9 months of the charity’s financial year end (10 months for accounting periods starting before 1 April 2006). Changes to the structure or constitution of a charity A charity can only make changes to its constitution or governing document if the constitution or governing document gives it the power to do so and, in making the changes, the terms of the constitution or governing document are followed. This flows from the general principle that charities have to follow the specific terms of their constitution. In addition, some changes that a charity may wish to make to its constitution may only be made with the consent of OSCR. This is because these changes could affect a charity’s status on the Register. The changes that require the consent of OSCR are: • changing the name of the charity • amending the charitable purposes of the charity • amalgamation with another body • winding up or dissolving the charity • applying to the court in relation to amending its purpose, amalgamating or winding up OSCR can withhold consent to a change of name only if the new name may raise objections (for example the new name is the same or similar to that of another charity). If a charity wishes to amend its purposes, it must give OSCR 42 days’ notice, and not carry out the change without OSCR’s consent. Other changes to the constitution, for example how board members are elected or appointed, do not require OSCR’s prior consent. However, OSCR has to be notified of the changes within three months of them being made.
i Further information can be found in OSCR guidance – Consents and Notifications – available from the OSCR website: www.oscr.org.uk What does OSCR expect to receive? ✓ Annual Return (all charities) ✓ Monitoring Return (charities whose income is £25,000 or above) ✓ Individual forms where a charity wishes to: ■ change its name ■ change its constitution ■ wind up or dissolve ■ amalgamate ■ make changes to the information on the Register
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Guidance for Charity Trustees ‘acting with care and diligence’
4.3 Financial records and reporting Charities must keep accounting records of sufficient detail that are able to: • show, day by day, the money received and spent by the charity • record the assets and liabilities of the charity • disclose the financial position of the charity at any time At the end of each financial year charities must: • prepare a statement of account, including a report of activities, which must be independently examined or audited • after the independent examination or audit has been completed, send a signed copy of the statement of account to OSCR at the same time as the Annual Return and, if appropriate, the Monitoring Return Accounting records must be kept by the charity for at least 6 years from the end of the financial year to which they refer.
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The preparation and audit or independent examination of the annual statement of account must be carried out in accordance with the relevant Charities Accounts (Scotland) Regulations and any additional legislative requirements for organisations formed under other statutes (e.g. charitable companies formed under company law). Guidance on the Charities Accounts (Scotland) Regulations 1992 and the Charities Accounts (Scotland) Regulations 2006 is available from the OSCR website. Charity trustees should be aware that section 46 of the Act provides a new duty for those carrying out an independent examination or audit of a charity’s statement of account to report in writing immediately to OSCR any matter that may have material significance to OSCR’s work. Areas of particular interest to OSCR include: • dishonesty or misuse of funds • serious breach of a legislative requirement • operating beyond powers contained in the constitution or governing document
What does OSCR expect to receive? ✓ Statement of account ✓ Annual Return ✓ Monitoring Return, if appropriate
i For further information: The Charities Accounts Regulations – Guidance available from OSCR website: www.oscr.org.uk
OSCr
Office of the Scottish Charity Regulator
4.4 Fundraising The Act provides charities, and therefore charity trustees, with greater control over those who fundraise for them. This part of the Act covers not just charities but all benevolent organisations (i.e. organisations with charitable or philanthropic purposes whether or not they are actually charities). Sections 81 of the Act requires a formal agreement between the charity or other benevolent body and any professional fundraiser or commercial organisation that is involved in raising funds for them. The agreement must state the level of remuneration and expenses to be paid to the fundraiser, and satisfy a number of requirements that will be set out in the forthcoming Fundraising Regulations. If these requirements are not met, the agreement is only enforceable against the charity or other benevolent body by an order of the sheriff. Section 82 of the Act also allows the charity or other benevolent organisations, under certain circumstances, to obtain an interdict banning fundraising on their behalf. Examples where an organisation may take this action could include: • if the organisation objects to the methods of fundraising • if the person involved is not a fit and proper person to fundraise • if the organisation does not want to be associated with the venture The Act also allows Scottish Ministers to make Regulations controlling both the collection of money from the public and those carrying out such collections. At the time of publication the Regulations are still under consideration. The Act also has provisions covering: • public benevolent collections • designated national collectors • breach of regulations and agreements These provisions are explained below. However, they have not yet come into force. Meanwhile the regulations governing public charitable collections are contained in section 119 of the Civic Government (Scotland) Act 1982, and the Public Charitable Collections (Scotland) Regulations 1984 and the Amendment Regulations 1988. Public benevolent collections A public benevolent collection is a collection from the public of money, or promises of money, for the benefit of organisations with charitable, benevolent or philanthropic purposes. Organisers of such collections are required to apply to the relevant local authority for permission to collect unless any of the following conditions apply: • the collection is by a designated national collector (see below) • the collection takes place at a public meeting • the collection takes place on land occupied by the organiser • the collection is by an unattended receptacle in a public place Unauthorised collection under any other conditions is an offence.
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Guidance for Charity Trustees ‘acting with care and diligence’
Local authorities are required to make enquiries before they either give or refuse permission to collect. This requirement may be waived for certain types of applications. They are also able, under certain circumstances, to withdraw permission previously granted. Local authorities must have regard to the guidance issued by OSCR in exercising these functions. The organiser of a public benevolent collection may appeal to the sheriff against the decision of the local authority. Designated National Collectors OSCR may designate charities that meet certain criteria as Designated National Collectors. Before setting the criteria OSCR must consult representatives of local authorities, representatives of charities, and any other persons that it thinks fit. Collections by Designated National Collectors must be notified to the appropriate local authority, which may prohibit the collection if it is considered likely to cause undue local inconvenience. A Designated National Collector may appeal to the sheriff against the decision of the local authority. The Designated National Collector must also report annually to OSCR.
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Breach of regulations and agreements A person or organisation that contravenes any of the Regulations will be guilty of misconduct. They may also be guilty of a criminal offence and liable on conviction to a fine. It is unlawful for an organisation or promoter to fundraise if the Court has prohibited them from doing so, or if the charity or other benevolent body with which they had an agreement has withdrawn from that agreement. Charity trustees have a duty to consider what action to take in the interests of the charity if they become aware of unauthorised fundraising carried out in their name or on their behalf.
Examples of good practice • Adopt the codes of fundraising practice developed by the Institute of Fundraising • Join the self regulation scheme developed by the Fundraising Standards Board
What does OSCR expect to receive? ✓ An annual report where a charity is a designated national collector
i For further information: OSCR website: www.oscr.org.uk Institute of Fundraising
OSCr
Office of the Scottish Charity Regulator
4.5 Providing information to the public Charity details on stationery, etc. The way in which charities refer to themselves, for example on their stationery, is important to members of the public understanding which organisations are legitimate charities. Scottish Ministers will make Regulations directing charities on how they should refer to themselves in their main documents (and their literature, brochures, website, etc.) to show clearly that they are a charity and are registered. It is likely that the Regulations will cover documents such as cheques, credit cards, annual reports, headed notepaper, raffle tickets, and advertising material. OSCR may require examples of these documents from charities. At the time of publication the Regulations regarding how charities should refer to themselves are still under consideration. However, once the Regulations come into force there is likely to be a short period to allow charities time to use up existing stationery and make any other changes required. Public access to charity accounts and constitution or governing document The Act allows for members of the public to have access to particular information about charities on the Register. Charities must, if the request is reasonable, provide a copy of their constitution or governing document, or latest statement of account to anyone who asks for them. The person asking for these documents may also specify the format in which they are to be delivered, again provided that the request is reasonable. The charity is able to charge a fee for making these documents available, as long as the fee does not exceed the cost of supplying the copies (or any fee Scottish Ministers may decide upon). The cost of supply does not include the cost of preparing accounts, as there is a statutory requirement for the charity to maintain records, prepare accounts and supply these to OSCR and the public. See 4.3 above. For the present OSCR does not propose to publish charity accounts online, but may do so in the future. What information should charities provide to the Public? ✓ Charity details specified on stationery, cheques, invoices, etc. (the relevant Regulations have yet to be confirmed) ✓ Charity details on the OSCR Register ✓ Copies of accounts and constitutions or governing documents on request
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Section 5 Charity trustee remuneration Because charity trustees must act in the interests of the charity, any personal benefit to a charity trustee, whether direct or indirect, has to be treated with some caution. Sections 67-68 of the Act deal with one particular aspect of this – the remuneration of charity trustees. Section 67 specifies that a charity trustee must not be remunerated from charity assets unless certain conditions set out in the Act are met.
5.1 What is remuneration? Remuneration in this context would include payment or benefit in kind: • for being a charity trustee • under a contract of employment • for other services to or on behalf of the charity This may include payment made either to a charity trustee personally or to a person with whom the charity trustee is connected. Section 68(2) defines the persons who are “connected” with the charity trustee. These include: • immediate family and domestic partners
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• a company in which the charity trustee or persons connected with them may have a substantial interest, or • a Scottish partnership in which the charity trustee or a person with whom the trustee is connected is a partner Out-of-pocket expenses paid to charity trustees, for instance travel expenses to attend meetings, would not be considered remuneration.
5.2 Conditions for remuneration The specific conditions under the Act that would allow charity trustees to receive remuneration are: • the maximum amount of the payment is set out in a written agreement • the maximum amount is reasonable in the circumstances • it is in the interests of the charity for the services to be provided by the charity trustee for that amount (this must be agreed before the agreement is entered into) • after the agreement is entered into, only a minority of the charity trustees receive remuneration • the charity’s constitution or governing document does not expressly rule it out What is “reasonable remuneration” has to be considered with a view to all the circumstances, but there are often professional associations that will provide guidance for charity trustees. Consulting such an association would be one way in which the trustees could satisfy themselves that an amount of remuneration was reasonable. Another way would be to obtain at least two separate quotes for the service to be given by the charity trustee. Charities that had trustees receiving remuneration when the Act came into force in April 2006 and are not exempt from the conditions regarding remuneration (see 5.3 below), must review these arrangements. They will have to consider if it is in the charity’s interest for them to receive that benefit and whether the amount is reasonable. A clear minute should be made of the decision reached.
OSCr
Office of the Scottish Charity Regulator
If it is agreed that the payments are in the interests of the charity and the amount is reasonable then, as long as the majority of trustees remain unpaid, a written agreement will need to be drawn up setting out the maximum amount to be paid.
5.3 Exemptions from the conditions for remuneration The Act states that the above conditions regarding charity trustee remuneration do not apply if: • there is a specific provision in the constitution or governing document authorising remuneration to trustees that was in force on 15 November 2004 (the day the Charities and Trustee Investment (Scotland) Bill was introduced into the Scottish Parliament) • there is legislation or an order is made by the Court of Session that allows charity trustees to receive remuneration However, it must be remembered that charity trustees are still bound by their general duty to act in the interests of the charity. If the remuneration appears to be excessive, or the majority of the charity’s trustees appear to benefit, there may be a breach of duty. This would constitute misconduct. The date of 15 November 2004 is only relevant if the constitution or governing document specifically permits the payment of remuneration. If the constitution is silent, or only has a general empowerment provision, then the conditions set out in section 5.2 for the remuneration of charity trustees apply.
5.4 Examples of remuneration The examples given below, of where charity trustees may or may not receive remuneration should not be seen as definitive. They are given for illustrative purposes only. Where all the conditions for remuneration are fulfilled (see 5.2) or charities are exempt from these conditions (see 5.3) then some examples where charity trustees may receive remuneration are: • when a local tradesman is a charity trustee and provides services to the charity • when employees of the charity are members of a board either because of their position, e.g. chief executive, or because they are elected, e.g. as staff representative • when a local solicitor or accountant is a charity trustee, and the solicitor’s or accountant’s firm provides services to the charity at an agreed price. Some examples where charity trustees should not receive remuneration include: • when all, or the majority of, the employees of the charity are closely related to the charity trustees (i.e. they are “connected persons” under section 68 (2)) • when a company or firm owned or controlled by a charity trustee or their relatives charges the charity excessive amounts for services
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Guidance for Charity Trustees ‘acting with care and diligence’
Examples of good practice • Adopt a charity trustee remuneration policy and procedures which ensure any remuneration complies with the conditions set out in the Act • Establish a register of trustees’ interests • Consult professional bodies before agreeing remuneration • Obtain at least two separate quotes for services • Clearly minute the decision that remuneration of a particular charity trustee is in the charity’s interest 5.5 Trustee indemnity insurance Charities are now permitted to use charity funds to provide all their charity trustees with indemnity insurance.
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OSCr
Office of the Scottish Charity Regulator
Section 6 Investment powers of trustees Powers of investment of trustees and associated duties Sections 93 to 95 of the Act implement longstanding recommendations of the Scottish Law Commission and provide an extension to the investment powers of trustees of all trusts, whether they are charities or not. By virtue of this provision, trustees are entitled to make any kind of investment of the trust estate including a wider power to acquire stocks and shares. The effect is that trustees will generally have the same powers of investment as if they were the beneficial owners of the trust estate. Trustees also have the power to acquire heritable property (i.e. land or buildings) for any other reason. All these wider powers introduced by the Act are subject to the same restrictions and exclusions as are imposed by previous Acts and do not extend to certain categories of trustees. Furthermore, the Act stipulates a number of conditions and duties that must be followed by the trustees in the exercise of their extended powers of investment. These duties are that before making an investment trustees should: • consider, as is appropriate for the trust, the need for diversification of the trust’s investments. Diversification may not be appropriate in all circumstances • consider the suitability to the trust of the proposed investments • consider whether they need to obtain appropriate advice on the way in which their power to invest should be used, or whether their investments should be changed • if they decide advice is required, obtain it from someone who they believe has the ability, practical experience and appropriate qualifications to provide proper advice Power to appoint nominees and associated duties Section 94 also provides for a new statutory default power to appoint nominees (e.g. an investment manager) for the purpose of investment. This meets modern day investment practice and will allow trustees to transfer title to property to nominees where a trust deed is silent. This provision also sets out key elements of the duty of care to which trustees must pay particular regard in exercising this power. These are, that the: • appointment is appropriate to the trust and that the trustees believe the nominee has the skills, knowledge and expertise to act as a nominee • power to appoint nominees is subject to any restriction or exclusion in the trust deed and any enactment • appointment should be made in writing with the trustees determining the terms of the appointment and retaining the power to direct the nominee and revoke their appointment • trustees may not, unless it is reasonably necessary, o permit the nominee to appoint a substitute o restrict the liability of the nominee, or substitute, to the trustees or any beneficiaries o permit the nominee, or substitute, to act in circumstances giving rise to a conflict of interest • trustees must keep the nomination under review and consider whether they need to exercise their powers to direct a nominee (or revoke their appointment). If it is appropriate they must actually exercise their powers
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Guidance for Charity Trustees ‘acting with care and diligence’
Power to delegate investment management functions Section 94 also confirms the power of trustees to delegate investment and management of funds where a trust deed is silent. The Act indicates what will satisfy trustees’ common law duty of care, namely, that trustees should: • select agents with care • determine the investment policy • set guidelines • communicate with and monitor agents OSCR and trustee investments There is no provision in the Act for OSCR to consent to particular investments or to an investment policy, and investments do not have to be reported to OSCR. However, the Accounting Regulations will require information to be provided in annual accounts.
i For further information on the scope of the investment powers and responsibilities, trustees should seek professional legal advice.
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OSCr
Office of the Scottish Charity Regulator
Section 7
Breach of duty
If there is evidence of misconduct, OSCR has a statutory duty to act, and will do so according to the principles of good regulatory practice. Quite what happens will depend on the seriousness of the circumstances. OSCR will be proportionate in its approach and offer, where appropriate, compliance support to charity trustees who have difficulties with understanding or fulfilling their obligations. Nevertheless OSCR, as the regulator, has a duty to be fair overall, as well as proportionate. It would not be fair to those charity trustees who are taking their responsibilities seriously if OSCR does not take any action where other charity trustees are in serious breach of their responsibilities. As is proper for a regulator, OSCR will apply balanced and consequential sanctions where appropriate. In extreme cases this can include the issue of directions and suspension orders. Information about these must be published with the charity’s entry in the Scottish Charity Register. The most effective way of approaching worries about possible breaches of duties is to implement good practice (see section 8 for more details). Misconduct is very unlikely to occur if charity trustees: • understand their duties • put the interests of the charity first • act reasonably • operate within the charity’s constitution • comply with the law and directions of regulators • seek advice when it is needed to make good decisions • seek to ensure the charity has enough money, or other resources, to meet any liabilities that might arise as part of contracts of employment or for services or goods If charity trustees have any problems with their duties under the Act or with complying with any further regulations they should seek support and advice as soon as possible. Sources of advice and support are listed in section 9.
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Guidance for Charity Trustees ‘acting with care and diligence’
Section 8 Checklist of duties and responsibilities with examples of good practice This section provides guidance on good practice for charity trustees. It is not essential that each charity demonstrate that they have adopted all the examples and the fact that the charity has not done so will not of itself be considered a breach of the legislation. However, adopting good practice will: • assist charity trustees in ensuring that they are compliant with their statutory duties • provide a clear record if the charity trustees’ actions are challenged • help incoming charity trustees understand the practical implications of their statutory duties • enhance the effectiveness of the charity Whilst this guidance gives examples of good practice, some charities may wish to go further and implement higher standards of governance. Whether or not to aspire to higher standards of governance is for charity trustees to decide. OSCR has a role in contributing to the debate about good practice and higher standards of governance, but the detail of development lies with organisations such as the Association of Chief Officers of Scottish Voluntary Organisations (ACOSVO), the Scottish Council for Voluntary Organisations (SCVO), The Management Development Network Scotland (MDNS) and with specialist advisors such as lawyers and accountants.
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Duties, responsibilities, and good practice The following four tables summarise the responsibilities of charity trustees under the four fundamental duties, and offer examples of good practice that will help ensure they fulfil those duties and responsibilities. The four tables can be used as a checklist of the key duties and responsibilities that charity trustees must be aware of and with which they must comply.
OSCr
Office of the Scottish Charity Regulator
Act in the interests of the charity Responsibilities
Examples of good practice
Put interests of charity first
Charity trustees declare any conflict of interest and do not take part in any discussion or decision on the matter
Declare any conflict of interest and do not take part in any discussion or decision if there is an irreconcilable conflict of interest between the charity trustee and any person responsible for their appointment Manage conflict of interest of fellow charity trustees and take steps to remove charity trustees in serious or persistent breach of their duties Ensure any remuneration of charity trustees complies with the conditions set out in the Act Individual charity trustees must ensure they are not disqualified from being a charity trustee
Adopt a charity trustee “Code of Conduct” which includes commitment to upholding aims of the charity and guidelines on conflicts of interest Potential charity trustees to confirm they are not disqualified New charity trustees to declare any interests that may give rise to conflicts of interest Maintain up-to-date register of charity trustees’ interests Charity trustee misconduct procedures formulated and applied Review the constitution to ensure the power to remove charity trustees who are in serious or persistent breach of the Act is available Adopt a charity trustee remuneration policy and procedures which ensure any remuneration complies with the conditions set out in the Act
Operate in a manner consistent with the charity’s purpose Responsibilities
Examples of good practice
Ensure that all activities of the charity fall within the charity’s purposes
All charity trustees have a copy of and be familiar with the charity’s constitution or governing document
Ensure charity adheres to its constitution or governing document Ensure assets are not applied to non-charitable purposes
Induction pack given to all new charity trustees which includes the constitution or governing document, up to date information about the activities of the charity and any statement of the values of the charity Refer to the charity’s purposes when developing and agreeing strategic plans
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Guidance for Charity Trustees ‘acting with care and diligence’
Act with care and diligence Responsibilities
Examples of good practice
Ensure charity is run properly, responsibly and lawfully
Agree and regularly review the strategy and policies of the charity
Act as guardians of the charity’s assets
Agree financial delegation and budgets, and monitor financial performance
Ensure the charity is solvent Ensure board of trustees are “fit for purpose” and the charity trustees are working together Apply a duty of care to paid staff and volunteers
Agree framework for support and management of paid staff and volunteers Ensure procedures are in place to keep up-to-date with legal responsibilities, e.g. employment legislation Agree expectations of charity trustee attendance at meetings and what to do if these are not met
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Annually review the progress and effectiveness of the charity and agree priorities for improving performance Include in charity trustee’s induction pack the role, responsibilities and liabilities, and the remit of any sub-committees Agree and implement programme for charity trustee training, board building and renewal Agree and apply process for managing serious differences between charity trustees, and between charity trustees and staff Consider any constitutional change that may be appropriate, e.g. permitting remuneration of trustees or changes in selection and rotation of trustees Delegate, by the Board, a specific area of oversight (e.g. investment, trustee training) to each trustee Regularly review board procedures for: receiving reports, confidentiality, managing risks, tackling issues of poor performance and overseeing compliance with regulations Take professional legal or financial advice if required
OSCr
Office of the Scottish Charity Regulator
Ensure charity complies with the provisions of the Act, and any other relevant regulation Responsibilities
Examples of good practice
Ensure details of the Charity on the Scottish Charity Register are accurate
Establish board meeting cycle to allow for consideration of the accounts
Submit to OSCR an Annual Return, Monitoring Return (if appropriate) along with a copy of the charity’s accounts signed by a charity trustee
Establish board meeting cycle to allow for reporting to OSCR
Obtain consent if changing the charity’s name or purposes, or if amalgamating or winding up the charity
Join the self regulation scheme developed by the Fundraising Standards Board
Notify OSCR of changes to the constitution within 3 months of them being made Keep financial records, prepare an annual statement of accounts and subject these to external scrutiny as required by the Accounting Regulations Keep accounting records for at least 6 years Establish a formal agreement between the charity and any professional fundraiser or commercial organisation carrying out fundraising for the charity, and adhere to forthcoming Fundraising Regulations Provide a copy of the charity’s constitution or governing document, or annual accounts to members of the public if requested to Adhere to the forthcoming regulations on how charities should refer to themselves in their documents and on publicity materials Adhere to other relevant legislation and regulation (e.g. employment law, health and safety, data protection, etc.)
Adopt Institute of Fundraising codes of practice
Ensure procedures are in place to keep up-to-date with legal responsibilities, e.g. employment legislation Regularly review board procedures for overseeing compliance with regulation
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Guidance for Charity Trustees ‘acting with care and diligence’
Section 9 Sources of advice and support 9.1 Websites The following list of resources and organisations is provided to point charity trustees to sources of possible advice and support. Although they may be helpful OSCR cannot be held liable for the quality of advice or support received. Materials and resources that originate from outside Scotland should be read in conjunction with the relevant Scottish legislation.
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Topic/Organisation
Website address
The Charities and Trustee Investment (Scotland) Act 2005
www.opsi.gov.uk/legislation/scotland/ acts2005/20050010.htm
SCVO: Good practice for the voluntary sector
www.scvo.org.uk/governance
Charity Commission (England and Wales)
www.charitycommission.gov.uk
Law Society of Scotland
www.lawscot.org.uk
Governance
www.governancehub.org.uk
Management Development Network (network of independent specialists in management in voluntary organisations)
www.mdn.org.uk
Companies Acts
www.companieshouse.gov.uk
Data Protection
www.dataprotection.gov.uk
Access to Information
www.informationcommissioner.gov.uk
Directory of Social Change Publications
www.dsc.org.uk
Institute of Fundraising
www.institute-of-fundraising.org.uk
Fundraising Standards Board
www.fsboard.org.uk
Institute of Chartered Secretaries and Administrators
www.icsa.org.uk
Health and Safety Executive
www.hse.gov.uk
Equal Opportunities Commission
www.eoc.org.uk
Commission for Racial Equality
www.cre.gov.uk/scotland
Employment issues
www.acas.gov.uk
Employment issues
www.dti.gov.uk/employment/index.html
Volunteer Development Scotland
www.vds.org.uk
Volunteering England
www.volunteeringengland.org.uk
Association of Chief Executives of Voluntary Organisations
www.acevo.org.uk
Association of Chief Officers of Scottish Voluntary Organisations
www.acosvo.org.uk
OSCr
Office of the Scottish Charity Regulator
9.2 Publications and other resources Publications Big Picture. 2003. SCVO. ISBN 1 870904 75 3. Contact: www.scvo.org.uk or 0131 556 3882 Boards that Work: A Guide for Charity Trustees. By David Fishel, 2003, Directory of Social Change: ISBN 1 903991 16 1. Contact: www.dsc.org.uk or 020 7209 4949. Care, Diligence and Skill. The Scottish Arts Council, 2002, Scottish Arts Council: ISBN 1 85119 105 4 Constitutions and Charitable Status. SCVO Guide, 2004. ISBN 0 9546930 0. Contact: www.scvo.org.uk or 0131 556 3882 Committee Members Handbook. Scottish Federation of Housing Associations, 2003, SFHA: ISBN 1 904322 14 X Good Governance: A Code for the Voluntary and Community Sector. 2005; The National Hub of Expertise in Governance. Contact: www.governancehub.org.uk or phone 020 7713 6161 Good Governance Action Plan. By Sandy Adirondack. 2002. NCVO. ISBN 0 7199 1603 8. Contact: www.ncvo-vol.org.uk or 020 7713 6161 Governance Stories: A practical guide to setting up your management committee and sustaining its work. By Shirley Otto & Jo Clifton, 2005, Russell House Publishing: ISBN 1 903855 63 2 Practical Guide to Financial Management for Charities. By Kate Sayer, 2nd edition, 2002, Directory of Social Change: ISBN 1 903991 29 3. Contact: www.dsc.org.uk or 020 7209 4949. The Charity Treasurer’s Handbook. By Gareth Morgan, 2002, Directory of Social Change: ISBN 1 900360 89 6. Contact: www.dsc.org.uk or 020 7209 4949. The CHAIR Pack: Chairperson’s Aids and Information Resource. Edited by Eddie Palmer, 2000, SCVO. Contact: www.scvo.org.uk or 0131 556 3882 The Complete Guide to Business and Strategic Planning. 2nd Edition, by Alan Lawrie, 2001, Directory of Social Change: ISBN 1 900360 87 X The “Getting to Grips with Governance” Toolkit. SCVO. Contact: www.scvo.org.uk or 0131 556 3882 The Governance of Public and Non-Profit Organisations: What do boards do? Edited by Chris Cornforth, 2003, Routledge, ISBN 0 415 35992 9 Voluntary Sector Legal Handbook. By Sandy Adirondack and James Sinclair Taylor. 2001, Directory of Social Change, ISBN 1 900360 72 1. Updates from: www.sandy-a.co.uk. Contact: www.dsc.org.uk or 020 7209 4949 Your Mission ... Governance. SCVO. Contact: www.scvo.org.uk or 0131 556 3882
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Other resources Office of the Scottish Charity Regulator. Updates, information and guidance. Contact: OSCR, Quadrant House, 9 Riverside Drive, Dundee DD1 4NY or 01382 220446 or visit www.oscr.org.uk National Occupational Standards for Trustees and Management Committee Members. UK Voluntary Sector Workforce Hub. Contact: www.ukworkforcehub.org.uk or 020 7713 6161 Institute of Fundraising, Codes of Fundraising Practice. Contact: Institute of Fundraising, Park Place, 12 Lawn Road, London SW8 1UD or 020 7840 1000 or visit www.institute-of-fundraising.org.uk Local Authorities. All local authorities have a Community Education Service (sometimes called Community Support or Community Development) or other staff who can provide support to charities. Details can be obtained direct from the local authority. Councils for Voluntary Service. Every local authority area has a Council for Voluntary Service (CVS) that provides advice, information and assistance to charities. Their contact details can be found in the phone book, libraries or the CVS Network website at www.scvo.org.uk/cvsnetwork/Home/Home.aspx Scottish Council for Voluntary Organisations (SCVO). SCVO is the national body representing the voluntary sector and works to advance best practice. Contact: SCVO, Mansfield Traquair Centre, 15 Mansfield Place, Edinburgh EH3 6BB or 0131 556 3882 or www.scvo.org.uk
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OSCr
Office of the Scottish Charity Regulator
Annex 1. Section 66 of the Charities and Trustee Investment (Scotland) Act 2005 66 Charity trustees: general duties (1) A charity trustee must, in exercising functions in that capacity, act in the interests of the charity and must, in particular– (a) seek, in good faith, to ensure that the charity acts in a manner which is consistent with its purposes, (b) act with the care and diligence that it is reasonable to expect of a person who is managing the affairs of another person, and (c) in circumstances capable of giving rise to a conflict of interest between the charity and any person responsible for the appointment of the charity trustee(i) put the interests of the charity before those of the other person, or (ii) where any other duty prevents the charity trustee from doing so, disclose the conflicting interest to the charity and refrain from participating in any deliberation or decision of the other charity trustees with respect to the matter in question. (2) The charity trustees of a charity must ensure that the charity complies with any direction, requirement, notice or duty imposed on it by virtue of this Act. (3) Subsections (1) and (2) are without prejudice to any other duty imposed by enactment or otherwise on a charity trustee in relation to the exercise of functions in that capacity. (4) Any breach of the duty under subsection (1) or (2) is to be treated as being misconduct in the administration of the charity. (5) All charity trustees must take such steps as are reasonably practicable for the purposes of ensuring– (a) that any breach of a duty under subsection (1) or (2) is corrected by the trustee concerned and not repeated, and (b) that any trustee who has been in serious or persistent breach of either or both of those duties is removed as a trustee.
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OSCR 2nd Floor Quadrant House 9 Riverside Drive Dundee DD1 4NY 01382 220446 01382 220314 www.oscr.org.uk APS Group Scotland OSCR10666 (09/10)
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Being a Charity Trustee: Good Governance Checklist for Elected Members
Introduction Congratulations on becoming a Councillor. The governing documents of some charities specify that some Councillors are also trustees of those charities (known as ex officio trustees). If you are called up to take on this role, you should be aware that your duties as a charity trustee are different and separate from your duties as a Councillor and sometimes the two may conflict. This briefing note has been prepared by the Scottish Charity Regulator (OSCR) to assist newlyelected members in understanding the role of a charity trustee and the associated duties and responsibilities. Longer-serving councillors may also find it useful as a reminder. Please keep it for reference in the months ahead. OSCR is the independent registrar and regulator for Scotland’s 23,500 charities. We took up our full regulatory powers in April 2006 with the commencement of the Charities and Trustee Investment (Scotland) Act 2005.
The duties of charity trustees – things to remember Charity trustees are those in control of the management and administration of the charity and need to ensure that the charity operates effectively, and is able to account for its activities and outcomes both to the public and to OSCR.
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Charity law in Scotland imposes four general duties on charity trustees. You must:
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act in the interests of the charity
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act with the care and diligence that it is reasonable to expect of a person who is managing the affairs of another person
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ensure that the charity complies with the provisions of the 2005 Act, and other relevant legislation
seek, in good faith, to ensure that the charity operates in a manner that is consistent with its objects or purposes
From our experience as a regulator, we have prepared a good governance checklist for charity trustees – see overleaf. Sign up to OSCR Reporter, our regular e-newsletter, to keep up to date with developments. Further guidance can be found on the OSCR website at www.oscr.org.uk. The following publications may be particularly useful for elected representatives:
» Guidance for Charity Trustees » Who’s in Charge: Control and Independence in Scottish Charities
» Checklist for Charity Trustees – Protecting Charitable Status
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Good governance checklist
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From our regulatory experience, we have prepared the following checklist of questions. If you are taking up a charity trustee role you might find it helpful to think about these questions which cover some of the legal requirements, as well as good practice:
Are all new charity trustees issued with an induction pack identifying their role, responsibilities and liabilities? Is there a programme of ongoing trustee training to allow trustees to keep their understanding current?
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Is seeking independent advice considered where charity trustees are taking a decision on a matter that poses significant operational or reputational risk to the charity?
Operating in a manner consistent with the charity’s purposes
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Have you and your fellow trustees seen and read the charity’s constitution or governing document?
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Does the charity’s constitution make it clear what charitable purposes it is pursuing?
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Are the charity’s purposes up to date and consistent with its current activities?
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Are all the charity’s purposes charitable according to the 2005 Act?
Acting in the interests of the charity
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How many of the charity trustees owe a duty to any other organisation and will this cause a significant, or ongoing, conflict of interest?
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Is there a conflict of interest policy in place? Does it expressly provide that conflicts must be disclosed and that any charity trustee with such a conflict must refrain from participating in any decision of the charity on the matter? Is the policy followed and clearly documented so that you can demonstrate your decisions have been taken in the best interests of the charity?
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Have you and other trustees ensured that you not only act independently when making decisions, but also are seen to be acting independently?
Acting with care and diligence
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Is it clear to you from the charity’s constitution who’s in charge of the charity? Does everyone involved understand who the charity trustees are, and that they are responsible for the charity’s decisions? Does the charity’s board have the right mix of skills and experience to manage its affairs well and was this considered in any appointments process?
If you are unclear about anything here, OSCR or your your Chief Executive’s office may be able to offer advice and assistance.
2nd Floor Quadrant House 9 Riverside Drive Dundee DD1 4NY P. 01382 220446 E.
[email protected] W. www.oscr.org.uk APS Group Scotland 226528 (05/12)
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