When considering the roles, responsibilities, and powers of members, it is important to understand that academy trusts are founded by members, who agree the academy trust’s first articles of association (including the academy trust’s charitable purpose). These initial members can then appoint others to join them, who until recently could include academy trustee staff.
However, the Department for Education has confirmed that employees of an academy trust must not be appointed as members under the current model articles of association. In addition, the latest version of the Academies Financial Handbook requires all academy trusts, irrespective of the content of the articles of association, to ensure that, from 1 March 2021, no members of the academy trust are also its employees. Academy trusts should look to update their articles to reflect this change.
The role and responsibilities of the members
Academy trustees and members have different roles. As charitable companies limited by guarantee, every academy trust has academy trustees, which are both charity trustees and company directors of the academy trust. The role of the members is similar to that of shareholders in a company limited by shares.
Members play a crucial role in safeguarding academy trust governance. They should assure themselves that the governance of the trust is effective, and that academy trustees are acting in accordance with the trust’s charitable object(s), whilst ensuring that they do not stray into undertaking the trustees’ role. For example, Members would not generally be expected to attend board meetings, sit on executive leaders’ performance review panels, or even contribute to specific decisions in relation to the academy trusts’ business.
Powers of the members
Whilst members should not be involved in the day-to-day business of the academy trust, they must use their powers to step in if governance is failing. Pursuant to the powers inferred upon them by the Department’s model articles of association and in company law, members may:
- by special resolution, amend the Articles of Association, appoint new members or remove existing members (other than, where there is one, the foundation/ sponsor body and any Members it has appointed), and issue direction to the academy trustees to take a specific action.
- appoint academy trustees as set out in the trust’s articles of association, and have power under the Companies Act to remove any or all serving academy trustees.
- appoint the academy trust’s auditors and receive (but do not sign) the academy trust’s annual audited accounts (subject to the Companies Act).
- change the name of the charitable company and ultimately, wind up the academy trust.
Members have a general duty to exercise their powers to further the academy trust’s charitable object, which in most cases is ‘to advance, for the public benefit, education in the United Kingdom’. In trusts which include church academies, members must also ensure that the religious character of the church academy is preserved and developed as part of ensuring the charitable objects of the trust are met.
The Department for Education’s minimum requirement before entering into a funding agreement is that academy trusts have at least three members, although wherever possible it is preferable for at least five members to be appointed. Having five members can provide for a more diverse range of perspectives, reduces the risk of concentrating power and can also help to ensure that Members can take decisions via special resolution without requiring unanimity.
The most robust governance structures will have a significant degree of separation between the individuals who are members and those who are academy trustees. Creating this separation reduces the risk of unchecked ‘group think’ by the board. It is recommended that at least the majority of members should be independent of the board of trustees.
It is key that the articles of association of an academy meet the requirements of the Department for Education, and in particular that it is made clear that employees of the academy trust cannot also be appointed to be members of the academy trust.
Please contact Emma Swann at [email protected]com if you would like to discuss any of the points raised in this article, or if you would like to update your Articles of Association to ensure compliance with the Department for Education’s requirements.