BUSINESS MANAGEMENT
Trustees and constitutions: your questions answered
Alliance business manager Gary Croxon meets with Alliance senior insurance and membership advisor Mandy Franks to discuss the Pre-school Learning Alliance 2011 model pre-school constitution
Gary is a business manager, specialising in business support in the early years and leading on the Alliance's membership offer.
Mandy Franks is a senior insurance and membership advisor, specialising in governance, membership and insurance.
Gary: Let’s start with some context: what are the benefits of using this constitution?
Mandy: As a governing document, a constitution outlines the rules for running charities in line with the Charities Act. The Alliance’s constitution is written specifically for early years provision and is pre-agreed with the Charity Commission, which speeds up the process of registration. This enables us – the Alliance – to support early years providers in adhering to it. A charity’s constitution also represents the contractual relationship between the charity, its members and its trustees. It must be agreed and adopted by the members.
G. Is the 2011 version the most up to date?
M. That is correct. If you’ve already adopted the 2011 version and registered it with us, you don’t need to re-adopt the constitution. We would recommend that you re-adopt at each annual general meeting (AGM), so that new trustees are aware of the rules.
G. What are the changes?
M. The 2011 model constitution introduced a change allowing staff to become charity trustees. As a result, the Charity Commission established a scheme that groups must
join if they wish to adopt the model.
G. When you refer to a scheme, what do you mean?
M. This means that the Alliance will collect a statement from each group allowing us to register them with the scheme. This includes their minutes from the adoption AGM and a copy of their signed constitution. Once the Charity Commission approves the adoption, we email each setting a legal document to confirm.
G. You mention the constitution allows staff to become charity trustees. How does this work in practice?
M. The 2011 model allows employees to become a member of the charity and be elected as a trustee, provided that the committee considers it to be in the best interests of the charity and the following conditions are observed:
- The individual must have family or affiliate membership and be co-opted onto the committee as a trustee.
- The role for which they are employed must not include duties that form part of their responsibilities as a trustee.
- Only a minority of the trustees may be paid employees.
G. What about conflicts of interest?
M. To avoid conflicts of interest when discussing or voting on employment matters, staff should not hold officer roles. However, they can still guide other trustees on matters relating to the provision of early years education or take on the role of the nominated person with Ofsted. If this arrangement is in place, the setting will need to follow the Charity Commission guidance on managing conflicts of interest (bit.ly/U5-conflicts) and trustee expenses and payments (bit. ly/U5-trusteeexpenses).
G. Can someone only be the nominated person with Ofsted if they are on the governing body?
M. Yes, that is correct. Think of it this way, if you are representing something you must be part of it.
G. Is there protection for trustees in the event of their group closing?
M. Being an unincorporated charity means there is no protection from personal liability for trustees. If there are not sufficient assets to cover its debts, trustees may be required to contribute towards the cost of winding up the charity. For this reason, it is important to have a reserve policy in place, and the Alliance has created a mini-guide (tinyurl.com/U5-reservepolicy) to help groups develop one.
G. Is there anything else trustees can do to protect themselves?
M. That’s an excellent question, Gary. Trustees should consider becoming a Charitable Incorporated Organisation (CIO), as this structure gives charity trustees protection from personal liability. The CIO can hold property and enter contracts in its own name as a corporate body. CIOs do not need to register with Companies House and are regulated only by the Charity Commission.
If a charity converts to a CIO, it will need to re-register with Ofsted and cannot operate until they have carried out a registration visit and issued a new registration number. The Alliance has produced CIO toolkits to help groups change their legal structure (tinyurl.com/U5-CIOtoolkits).
G. Finally, what would be your top five tips for trustees?
M. 1. Know what constitution your charity uses and where to find it.
2. Remember you are not alone. There are people who can support you.
3. Share responsibilities across the committee.
4. Do not be afraid to ask questions.
5. Maintain a good working relationship with your staff.
Look out for the next issue of Under 5, where we explore this topic further.
Under 5 magazine
The magazine of the Early Years Alliance