Am I Disqualified from Acting as a Trustee? - by Sandy Mansfield, First Contact team at the Charity Commission

Sandy Mansfield, from the First Contact team at the Charity Commission, describes how charity trustees, old and new, need to ask themselves this very important question:

‘Am I disqualified from acting as a trustee?’

By giving your time, energy and commitment as the trustee of a charitable cause, you are making a vital contribution to society, and hopefully you find it personally rewarding. But despite very good intensions many people are unaware that they may be acting illegally. Some people are disqualified by the Charities Act from acting as trustees. You are disqualified if you:

• have been convicted of an offence involving deception or dishonesty, and the conviction is unspent;
• are bankrupt, and have not been discharged;
• have been removed from trusteeship of a charity by the Court or the Commission for misconduct or mismanagement;
• have been disqualified as a company director;
• have entered into a composition or arrangement with your creditors, including an individual voluntary arrangement (IVA), and are currently on the Insolvency Service Register.

In most cases you are committing an offence if you act as a trustee while disqualified. The Commission can grant a waiver under the Charities Act if there are good reasons in the interests of the charity for allowing a disqualified person to be a trustee. You can find out more from our staff guidance OG41 and OG42 on our website.

Before appointing someone as a trustee, the trustee board should obtain a declaration from them that they are not disqualified.

In addition, we strongly recommend that charities working with children or vulnerable adults, with positions which are eligible to obtain DBS checks should do so.

You can use our model declaration form both for prospective trustees and existing trustees (as their circumstances may have changed).

The charity should also consult official registers of disqualified persons.

These include:

(1) The Individual Insolvency Register maintained by the Insolvency Service, which contains details of:

·         bankruptcies that are either current or have ended in the last three months;

·         current individual voluntary arrangements and fast track voluntary  arrangements; and

·         current bankruptcy restriction orders and undertakings.

You can search the register on the Insolvency Service website, by visiting your local Official Receiver’s office, or by post or fax.

(2) The register of disqualified directors maintained by Companies House. You can search this register on the Companies House website.

(3) The Commission’s register of all persons who have been removed as a charity trustee either by us or by the High Court since 1 January 1993. You can search this register online.

If you are disqualified, it means you can’t act, but you are not automatically removed. If you do participate in running the charity, you are committing an offence. Decisions that you take part in may be invalid. You remain responsible for the charity. You should formally resign to avoid this situation.

If you or your fellow trustees don’t take these steps we are likely to find out. We use several ways to monitor whether or not charities are checking the eligibility of their trustees. Currently we are aware of up to a thousand trustees who may be disqualified but have not resigned, and we are in the process of contacting them.

If a charity fails to take reasonable steps to ensure that its trustees are eligible to act, all of the trustees will share responsibility for any financial loss or reputational damage that happens as a result.

If you know that you are acting as a trustee when you are disqualified take action now, resign your position and ensure the charity updates the trustee details HERE.