For many charities, the annual general meeting is a formality, serving little real purpose. Others view it as a mechanism that gives members the ability to hold the board to account and the right to vote and move resolutions, and which provides stakeholders with the chance to speak and ask questions. But now that AGMs are no longer required by the Companies Act, it is a good moment to consider alternative ways in which stakeholders and members might con- tribute to an organisation's effectiveness.
Guidance from the Charity Commission says that it is good practice for charities to hold AGMs, but the issue is complex because memberships and AGMs come in many guises. At one extreme, where trustees are one and the same as the members, the AGM can be a self-perpetuating oligarchy, where trustees elect successors. In other settings, key stakeholders identify their own 'representatives' and elect them through an open voting structure to fill all the vacancies on a board.
It is necessary to consider further the expression 'key stakeholders'. Some charities have 'members' as described by the Companies Act, who are shareholders in all but name and have a number of legal rights. Other charities have a 'membership' that might have voting or consultation rights. Some in the sector recognise and involve the wider beneficiary community in their work, and even see the public at large as major stakeholders.
There are occasions when funders and local authority officers reserve the right to have their 'representatives' on the board, 'representative' being used carefully here because many charities distinguish between 'a' representative voice and 'the' representative voice and augment with research and consultations with a much wider stakeholder group.
One example is of a housing association with a gateway committee, the primary purpose of which is to represent the views of members, including tenants. There are 30 places on the gateway committee and it meets shortly before board meetings, having received all board papers. The committee's role is to represent members' views, working with the board to help shape the charity's direction, elect tenant and leaseholder board members from within its number and oversee the delivery and development of a community empowerment strategy.
I believe there are many more such examples of stakeholder engagement, and would welcome further illustrations before we see a perhaps premature demise of the AGM.
- Rodney Buse is chair of Charity Trustee Networks