Tony Charalambides, managing director of the troubled fundraising agency Tag Campaigns, will lose his position on the Public Fundraising Regulatory Association board if the company goes under.
Tag announced that it had gone into voluntary administration last Thursday because of financial losses from investing in new products and "an unprecedented degree of media and regulatory attention in recent months".
Ian MacQuillin, head of communications at the PFRA, said Charalambides, who joined the board in June, would have to resign with immediate effect if the company went under and therefore stopped being a member of the PFRA.
He would remain a member of the board until the administrator decided what to do with the company, said MacQuillin.
"The rules are that you can be a member of the board only if you work for a member company," he said. "If your company ceases to be a member of the PFRA, you cannot be a member of the board."
The administrators, Resolve Partners LLP, said on Friday that Tag’s financial position was still being reviewed.
The company was subject to a recent investigation by the Fundraising Standards Board, which found it had broken charity law and regulations during a campaign last summer. The self-regulator’s probe was launched after an article in The Sunday Telegraph newspaper about alleged misconduct by Tag fundraisers.
Charalambides was not available for comment.
In their statement about the administration, Tag’s directors said that site access and allocation continued to be a concern.
MacQuillin said the PFRA was consulting members about the site allocation system, which was different in London from other locations.
Asked if site access was a problem for members, he said: "It is more the fact that we have two different systems and we are trying to unify them."
Tag specialised in a method of street fundraising called Premium Short Message Service, which involves asking people to make one-off text donations with a view to contacting them and asking them to make regular contributions.
The PFRA estimates that this type of face-to-face fundraising, known as prospecting, accounts for about 15 per cent of all street fundraising and that Tag provided about half of that.
Asked about the effect on charities, MacQuillin added: "Capacity changes all the time, charities bring operations in house, other agencies come up and do it. The market regulates itself.
"In the past 11 years, 11 fundraising agencies have gone under. With street fundraising, charities pay only if you sign up donors, so the agency has to incur those costs – and this means the margins have always been fairly tight.
"If there is demand, someone usually comes in and meets it: the same will probably happen this time."