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Trustee disqualification

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Guidance about the rules on the automatic disqualification of trustees and senior managers.

In January 2018, the Charity Commission published guidance on the new rules on the automatic disqualification of trustees and senior managers.

One of the biggest changes made by the Charities (Protection and Social Investment) Act 2016 was to extend automatic disqualification to more circumstances and a wider range of people. The law came fully into force on 1 August 2018.

In this section, you’ll learn what has changed, and what charities might need to do.

Who was already disqualified by existing laws?

Being automatically disqualified means that an individual cannot be a charity trustee. The Charity Commission doesn’t need to do anything for this to be the case – once the condition applies, and until it ceases to apply, an individual is disqualified unless the Commission gives them a waiver.

Individuals are already automatically disqualified as charity trustees if they have unspent convictions for offences of dishonesty or deception (the same goes for attempting, aiding or abetting these offences). A spent conviction doesn’t disqualify anyone – the disqualification only applies to unspent convictions. How long a conviction remains unspent depends upon the type and length of sentence a person was given after conviction (the charity Unlock has a list).

An offence of dishonesty or deception is one where dishonesty or deception must be proved for someone to be convicted. It doesn’t just mean dishonesty or deception was involved in committing the offence. Theft is a good example: dishonesty must be proven for a defendant to be found guilty.

Individuals are also automatically disqualified, unless the court has given leave, if they are:

  • currently declared bankrupt or subject to bankruptcy restrictions or an interim order
  • subject to a debt relief order, a debt relief restrictions order or interim order
  • disqualified from being a company director

Individuals are automatically disqualified if they have previously been removed as a trustee, or as a charity officer, agent or employee, by the Commission or the High Court due to misconduct or mismanagement (or the Scottish equivalents).

What's changed with the new law?

The new law means that a wider range of offences, and some other circumstances, trigger disqualification. The new offences are:

  • several terrorism-related, money laundering and bribery offences
  • violating certain Commission orders relating to finances or property
  • misconduct in public office, perjury or perverting the course of justice
  • disobeying an order or direction of the Commission on application to the High Court
  • attempting, aiding or abetting these offences.

Some new cases apart from criminal offences are also covered under the new rules:

  • civil contempt of court relating to false statements (but only for as long as disqualification would have lasted had the same punishment been imposed for a criminal conviction)
  • where someone is a designated person for reasons linked to terrorist activity by the Treasury
  • where someone is subject to notification requirements under the Sexual Offences Act 2003.

But the bigger issue is probably the fact that senior managers as well as trustees are now subject to automatic disqualification.

Who counts as a senior manager?

The Act defines two different kinds of senior management functions. The first kind relates to the management of the charity. The person holding that function can only be responsible to a trustee. This person, if anyone, would probably be your chief executive (they might be called your director).

The second kind involves control over money. Here, the person holding that function can only be responsible to either a trustee or another employee with senior management functions that don’t involve control over money (usually your chief executive). If you have paid staff, your most senior staff member with responsibility for finance is likely to be covered. But many charities have a volunteer who carries out this role.

How large the charity is, whether a person is paid and whether their contract is permanent doesn’t matter here. The key questions are:

  • what kind of responsibility does the person have?
  • where in the organisational structure does the person fit?

What does this mean for charities?

Charities should already have systems to check trustees aren’t disqualified on appointment and at reasonable intervals. Existing trustees should be asked to confirm they are not disqualified under either the previous and the new rules. Pre-appointment checks, and periodic confirmation, will now also need to be in place for relevant senior managers.

The first thing to do is to work out whether the charity has any posts which will qualify as senior managers. If it does, the charity should ask people in post to confirm that they are not disqualified under either the old rules or the new, additional ones.

In addition to obtaining signed declarations, charities should also check any relevant official registers which record the names of people who are disqualified from acting as charity trustees:

A charity with senior manager should review relevant job or consultancy contracts to decide whether it’s protected if the post holder is disqualified. You might need legal advice about this.

For most charities, this is likely to be all that’s required. If you do have a trustee or member of staff who will become disqualified, they must either:

  • formally resign as a trustee or cease to act as a senior manager
  • apply to the Commission for a waiver to continue in their role.

You may need legal advice if a senior manager becomes disqualified and either does not seek a waiver or is refused one – especially in relation to employment rights.

Exceptions that prove the rule? Applying for waivers

The new rules came into force on 1 August 2018. However, from 1 February 2018 people who are affected by the new rules can apply for an advance waiver. The Commission has published guidance for individuals and for charities, and an online form is available here.

It’s the individual person who applies for a waiver – not the charity. The Commission will decide whether to give someone a waiver based on the circumstances of the individual’s case and:

  • the level of risk they present to the best interests of charities to which the waiver would apply
  • whether giving a waiver is likely to damage public trust and confidence in a charity or charities.

These are the overriding criteria the Commission will consider. Some of the specific factors include:

  • the conduct that led to their disqualification
  • how long it’s been since the disqualification came about
  • whether a disqualification relating to financial management stemmed from financial circumstances out of the person’s control
  • the view of charity trustees
  • the purposes of the charity (especially rehabilitating people with criminal records)
  • the importance to the charity of their involvement
  • user perspective
  • whether the acts which led to disqualification damage a charity or were done against a charity.

The Commission cannot give a waiver for a charitable company or charitable incorporated organisation if the reason for disqualification is bankruptcy, unless leave was given by the court.

Where a defendant’s conviction or other disqualifying reason is due to lapse very shortly after 1 August 2018, the Commission will take minimising disruption to charities into account.

Applying for a waiver for a specific charity or set of charities is more likely to be successful than applying for a waiver for all charities in a particular category or simply for all charities.

Information from trustees

Individuals apply for disqualification waivers, but the Commission will want the following information from the trustees of the charity or charities affected:

  • whether a majority of the trustees support the application
  • details of the recruitment process that led to the appointment or proposed appointment
  • details of the duties and responsibilities the person holds or wants to take up
  • why the trustees consider that this is the best person for the position
  • why they cannot act in an advisory capacity
  • whether the trustees have assessed and can manage any risk to the charity and its assets
  • the trustees’ views on the impact on the position and reputation of the charity
  • for undischarged bankrupts, trustees’ views on whether legal limitations on their activities could damage the charity.

Where can I find out more?

The Commission guidance provides more details.

Unlock, the charity working on behalf of people with criminal records, has guidance for both charities and individuals on trusteeship with a criminal record and can deliver workshops on the topic


Page last edited Aug 01, 2018

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