for the FICM Exec
Governance elements of FICM's journey to CICM
Introduction
This section of the "FICM to CICM governance" website is for the FICM Exec.
I welcome your feedback on the first set of proposals from the Governance Task and Finish Group, so that I can amend and improve them before the proposals are provided to the FICM Board as a whole on Thursday January 17th, ahead of the Board meeting on the 21st.
The proposals are the result of very hard work from members of the TFG (Monika Beatty, Pete Hersey, Andrew Sharmon, Tacqua Dahat and Ganesh Suntheralingam), whom I would like to thank for their commitment and energy.
The proposals are set out below, and there is a feedback form at the end if you would like to send me your thoughts. However, I usually find that it is easier to have a conversation at this stage of any governance design work - it is all too easy to go backwards and forwards on email for ages when a quick chat would resolve something in five minutes. Please let me know if this would be helpful! My email is Lucy@wellspringconsulting.co.uk and my phone number is 07931582594.
The rest of this page covers:
- context,
- the likely next steps,
- a refresher of the essential elements of charity law and governance for the Exec to bear in mind while reading the governance proposals, and
- a summary of what is done and what is left to do
Context
Some context may be useful here.
Speed required
First, the compressed nature of this timeline. Being ready for July this year will, and has already, required working extremely fast. Normally, a project like this would take a lot longer and would also be building on foundations of a governance review already completed. In addition, nearly all the FICM Board stakeholders have had very little experience of charity governance and charity law. This makes it harder to move quickly, as the development of every proposal requires more than time than usual to understand the principles and regulation driving it.
Meeting the July deadline will sometimes require thinking "Can I live with this?" rather than "is it exactly what I want?".
Compromise required
Members of the Exec may recall me mentioning the need for compromise when I presented at the October Board meeting. These compromises are an essential part of designing governance, and are likely to cover:
- simplicity v nuance
- diversity v experience + stability
- expert and representative voices v manageable number of people
- perfect processes v realism about manpower and time
Sensitivities within FICM and the RCoA
Transparency and accountability are essential elements of good governance, and Exec members will see that they are behind many of the proposals set out below.
Members of the Exec are already aware that some FICM Board members feel concerned that they are insufficiently involved in decision-making, in terms of both policy-making and identifying people for various roles. However, members of the TFG wish to be clear that the proposals build on and acknowledge recent improvements to how the FICM Board works, and should be seen as a positive step towards creating a Council and Board that are fulfilling places to work and which deliver CICM's charitable purposes.
Who is making these recommendations to the Board - Lucy or the TFG?
Generally, the answer is "both".
Nearly all the content of the proposals is agreed unanimously or with a TFG majority. Here, I either support the proposal or I think it's up to you and I have no view.
There are a few elements (which I will make clear) where the TFG is either still not sure, or where the TFG has not had sufficient time to come to a decision. Here, I have set out what I think would work best for CICM.
Chris Willis Pickup from Mishcon de Reya has also contributed his views at various points.
Next steps - outline timetable
1Exec gives feedback
I welcome your feedback, and will use it to improve and clarify the proposals
2FICM Board considers early proposals in January
There is so much to agree at the April Board meeting - the earlier we start to understand the Board's views and concerns, the better
3TFG further develops proposals
The TFG will develop and improve proposals, and start work on the remaining areas of the governance design
4Another round of feedback from the Exec and RCoA
Before the April FICM Board pack is sent out, I will ask for your feedback again. I will also check in with the RCoA, as they will need to approve the final proposals
5Invite feedback from the FICM Board
I will provide the full pack of governance design proposals to the FICM well in advance of the April Board meeting, to enable questions and discussions before the meeting
6April FICM Board meeting - vote
The FICM Board will vote on governance design proposals at the April Board meeting - ideally, by this point, a majority of the Board will be content with the set of proposals.
7Request approval from the RCoA as sole member
The final stage in the governance design approvals process - again, by this point, my aim is that the RCoA will be aware of the proposals well in advance and will be content
Very quick refresher: Charity law and regulation - please read this
Understanding the role and duties of Trustees will be essential for making recommendations about governance in CICM, so here is a quick refresher.
The first thing to note is that being a Trustee is an active role. Trustees must do their best to further the College's charitable purposes.
The definition of a Trustee
First, a charity trustee is a functional position (ie whether or not a person is a trustee depends on what they do, not how they are described). The statutory definition of a “charity trustee” is in s.177 of the Charities Act 2011, ie any person who has “the general control and management of the administration of a charity.”
This means that - although unusual - it is possible for an individual to be deemed a charity trustee despite not being on any official list. This is not a good position to be in, for several reasons which I am happy to explain if anyone would like me to.
So we will need to be careful that roles, powers and accountabilities are clearly defined.
The role of a Trustee
Being a Trustee carries serious responsibilities and liabilities. Trustees are subject to the legal and regulatory requirements imposed by charity law, set out below.
They must satisfy the six key duties of charity trustees:
(a) Complying with the law and the College's governing documents
Trustees will be under a duty to ensure that the College complies with its Articles of Association and any documents which sit under this.
(b) Ensuring that the College is carrying out its purposes for the public benefit
The guiding principle behind Trustee decisions must be what will best enable the College to deliver its charitable purposes.
(c) Always acting in the College's best interests
Trustees owe a fiduciary obligation of undivided loyalty to the charity’s objects . As charity trustees, they are in a position of trust and confidence and must act on behalf of the College and its beneficiaries. Spending the College's funds in a way that provides a private benefit to individuals or non-charitable organisations which is more than merely incidental, is a breach of duty and could, in extreme situations, result in the Trustees being personally liable to reimburse the College for any loss suffered.
(d) Managing the College's resources responsibly
Trustees must act responsibly, reasonably and honestly at all times, exercising sound judgement in respect of the College and its assets. They must avoid exposing the College's assets or reputation to undue risk.
Staff, and staff time, are included in the concept of "resources" - it's not just money.
Trustees must ensure that they only spend the College's funds on its charitable purposes. Spending the College's funds elsewhere could lead to the personal liability noted above.
(e) Acting with reasonable care and skill
Trustees must exercise such care and skill as is reasonable in the circumstances, making use of their own skills and experience and taking appropriate professional advice where necessary. This includes giving sufficient time to their role as charity trustees, preparing for and fully participating in Council and Board of Trustee meetings.
The law generally protects charity trustees if they have acted honestly. Trustees who have acted dishonestly, negligently or recklessly can be held personally accountable to the charity for any financial loss they cause.
(f) Making sure the College is accountable
Trustees must ensure that the College complies with statutory accounting and reporting requirements, and is accountable to its stakeholders.
Trustees must also take decisions in the right way
When taking any decisions in relation to the College, the Trustees must act in the best interests of the College, making balanced and appropriately informed decisions, considering the long-term as well as the short-term implications of those decisions and the impact on current and future beneficiaries. The Charity Commission’s guidance on trustee decision-making (Decision Making for Charity Trustees (CC27)) provides a framework of seven decision-making principles which the Commission expects charity trustees to follow. In summary, trustees must:
(a) act within their powers;
(b) act in good faith;
(c) be sufficiently informed;
(d) take account of all relevant factors;
(e) identify and disregard irrelevant factors;
(f) manage conflicts of interest; and
(g) ensure their decision is within the range of decisions that a reasonable body of trustees could make.
What's done? What's left to do?
Complete and agreed
- Objects
- Powers
- Benefits and conflicts (including remuneration of Trustees and trustee indemnity )
- Closing down (dissolution)
Proposals largely ready and set out for you below
(inevitably and rightly, with some questions that need to be answered and some assumptions that need to be tested)
- Purpose of the Board of Trustees
- Purpose of Council
- Basic structure of CICM's governance
- Term lengths - a very basic starting point
- Who is on Council? How do they get there?
- Who is on the Board of Trustees? How do they get there? (agreeing these two elements of governance design is an iterative process)
- How does CICM keep things rolling on between Board and Council meetings?
- How does the Board function - Chair, quorum, majorities, removing a poorly performing Board member?
About to start:
work for January, February and March
- Finalising everything outstanding from the first list, and working on feedback from the Board
- Term lengths - the detail
- How Council runs itself
Content provided by other people or by UK statute (ie very little for the TFG to do)
- Member categories - will come from Membership TFG
- Member rights, privileges, fees and obligations - ditto
- Calling and running AGMs and EGMs - from the Companies Act, with consultation with Member TFG
- Delegating to Committees - from standard text, tailored to confirm the permanency of Council
- Admin - from standard text
- Regulations and byelaws - what should belong here, how they are amended - from standard text
Website created by Wellspring Consulting for the CICM.