Charity Commission rejects call for time limit on trusteeship

In its response to a Lords committee report, the regulator says it is sympathetic to the principle, but believes it would be impractical

Charity Commission
Charity Commission

The Charity Commission has rejected a proposal that it should put a strict time limit on the periods people serve as charity trustees, but accepted that it should do more to support charity mergers.

The regulator has published its response to the report produced by the House of Lords Select Committee on Charities.

The commission’s response deals with six of the 43 recommendations made by peers, of which it accepts three, partially accepts one, says one is for the government and rejects another – the recommendation to create the option of time-limited structures in model governing documents for charities.

The commission’s response says it partially accepts the committee’s recommendation that there should be a time limit for individuals to serve as trustees and that materials and draft articles of association provided by the regulator should include a suggestion of time limits.

The regulator’s response says it is "sympathetic to the principle" of the recommendation and endorses the recommendation in the Charity Governance Code that there should be a nine-year time limit on trustee tenure.

"However, charities must develop their own policies in line with the requirements of their governing documents," the response says.

"The commission will look to review our draft articles of association to better reflect the Charity Governance Code, when time allows.

"The commission understands that there may be many reasons why particular charities might be unable to follow this good practice. It believes that a mandatory time limit on trusteeship does not take these into account and would therefore be unworkable."

The select committee’s report, published in March, recommended that the commission should take a "positive approach to assisting charities that choose to merge and assist in removing any barriers that may exist, notably with regard to liabilities such as pension arrangements".

The commission’s response says that, although it accepts the recommendation, it is limited as to the advice and support it can provide to charities because of budgetary constraints.

"Our current funding model and the increase in demand for the commission’s services has forced us to prioritise our core regulatory work over and above enablement work," the response says. "The commission would consider what further work we could do in this area, if and when we are able to secure additional sector funding."

But it the regulator says it is "looking at changes it should make to its guidance to support the financial resilience of charities and will consider whether further advice on mergers is needed".

The regulator’s response says it accepts recommendations that charity staff and trustees should be encouraged to report concerns about their charities and that the regulator makes clear how a charge on charities for its services would benefit the sector overall.

The committee’s report said peers had "grave concerns" about the regulator charging charities. But the regulator’s response says: "At a time when public finances are tight, and along with practice from other regulators, the commission believes it is fair that the charities make a modest contribution to a system that benefits them.

"The commission has been clear that additional funding from the sector would be spent on our enablement work and would not replace Treasury funding for our compliance functions."

The commission’s response says the committee’s recommendation that the regulator seek to recruit a more diverse board is for the Department for Digital, Culture, Media and Sport, which makes appointments to the commission’s board.

"We will continue to work with the department to ensure we can attract and recruit candidates with the broadest range of expertise, skills and backgrounds," the regulator’s response says.

The government’s response last month to the report rejected calls by peers to consider compelling large companies to give time off to their employees to volunteer as charity trustees.

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