Changes to the Automatic Disqualification Rule for Charities

Changes to the rules which automatically disqualify people from being trustees or acting in senior management positions within charities came into effect on 1 August 2018. The following is a reminder of the changes and the practical steps schools need to take as a result.

The Changes

The new rules make two significant changes:

• they are wider in scope increasing the number of circumstances for disqualification; and
• they extend the reach of the rules to include certain senior management positions in a charity such as Chief Executive or Chief Financial Officer (and their equivalents)

Under the old rules someone could be barred from acting as a trustee of a charity if they had certain unspent convictions for offences involving dishonesty or deception unless or until they had a waiver from the Charity Commission. Since 1 August, the criteria for disqualification includes additional offences including certain unspent convictions such as for terrorism or money laundering offences as well as anyone on the sex offenders register (even when the conviction is spent).These new rules will disqualify someone from acting as a trustee or a senior manager.

The Charity Commission has produced a disqualifying reasons table showing the reasons you are disqualified from acting as a charity trustee or senior manager which would be useful for schools to refer to.

Which senior manager positions are affected?

The positions of Chief Executive and Chief Financial officer are affected, or the equivalent – it is the function and not the title of the position that matters. Anyone therefore who is carrying out a role that reports directly to trustees, or is responsible for reporting financial matters to the CEO or the trustees is likely to fall within the definition. More detailed information on how the rules define the senior manager positions that are affected is set out in the Charity Commission’s guidance.

How does this impact on schools?

Schools need to review and update their recruitment processes and procedures for trustees and for relevant senior managers. In particular, schools must:

• Identify which posts, if any, qualify as senior manager positions;

• Update the declaration you currently ask prospective trustees to sign;

• Before you appoint new trustees or relevant senior managers ask them to sign the updated declaration to confirm that they are not disqualified. The Charity Commission has produced sample declarations to use for both senior management positions and trustees;

• In relation to existing trustees you should ask them to sign the updated declaration to confirm that they are not disqualified under these new rules;

• Going forward, ask all trustees and relevant senior managers to sign a fresh declaration at reasonable intervals to confirm that they have not become disqualified in the period since they were appointed or since they first signed the new updated declaration. What is a reasonable interval may vary from school to school. An annual declaration may be reasonable and could be signed at the same time as a declaration of interest.

If you would like any assistance with the updating or drafting of declarations or for specific advice or queries, please contact Kate Hickey on 01242 216256 or [email protected].