Charity Commission's new regulatory framework places greater responsibility on trustees

New document emphasises prevention of problems and a focus on 'serious risk'

The Charity Commission
The Charity Commission

The Charity Commission has today outlined its new approach to regulation, which will place greater emphasis on preventing problems rather than dealing with them after they occur.

Our regulatory approach to protecting the public’s interest in charity: how we assess and manage risks was developed following the commission’s decision to restructure in the light of its funding being reduced by almost a third between 2010/11 and 2014/15.

Sam Younger, chief executive of the Charity Commission, said the document placed a "greater expectation" on trustees to tackle risks "head-on".

It says the commission will adopt a three-stage process to deciding when and how to investigate charities and will focus on instances of "serious risk".

It will first ask whether the commission needs to get involved; then, if it proceeds, it will assess the nature and level of risk before finally considering the most effective response.

The publication says the commission will "place an emphasis on preventing problems" by identifying risks early and providing web-based guidance.

The regulator will use, whenever possible, "streamlined powers" and encourage charities to "self-certify" changes. It gives an example of charities being able to use its website to seek legal consent to change their articles of association.

The document says the regulator will "apply fewer resources to assessing charities with model or standard governing documents" and will fast-track such applications.

But it pledges the commission will "routinely check a sample of accounts each year and take appropriate follow-up action".

The publication stresses the commission "will not get involved in internal disputes" except in exceptional circumstances.

"As long as trustees act lawfully and reasonably, we have no power to intervene or overturn their decisions, no matter how unpopular they may be with the public or a charity’s beneficiaries. In these cases, there will be no issue of regulatory concern or interest to us," it says.

It also confirms the commission will no longer open regulatory case reports. "All the commission’s investigations going forward will be statutory inquiries," it says.

Younger said the commission would continue to deal "robustly" with serious abuse and non-compliance.

He said the commission understood some trustees made honest mistakes but added: "If something goes wrong, we expect trustees to take responsibility for putting things right. There will also be a greater expectation for trustees to tackle issues of potential risk to their charities head-on."

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