Charities urged to update practices to reflect new automatic disqualification rules
The countdown has begun to new automatic disqualification rules coming into force on 1 August, leaving just three months for charities to prepare for this important change.
The new rules from the Charity Commission build on existing requirements, but now apply to a wider group of people. One of the main changes will see the automatic disqualification regime extended to ‘senior managers’. Currently it is limited to trustees, but from 1 August, those in the role of chief executive or finance director (or equivalent) will also be affected. A wider range of circumstances will now trigger disqualification, including terrorism offences, misconduct in public office, sex offences, and money laundering.
One of the key facets for charity decision-makers to be aware of is that disqualification does not depend on the title of the post but on the responsibilities and accountability of the actual roles.
Charities will need to check which, if any, posts qualify as senior manager positions under the new rules, says HWB’s charity specialist Michaela Johns.
The new disqualification regime has some flexibility to ensure charities do not lose access to their current expertise. Application can be made for a waiver from the Commission, but it is advised to submit the application by 1 June to ensure a decision is received in good time.
Michaela, Director at HWB who heads the not-for-profit team, says: “This legislation is to be welcomed as it will provide greater protection for charities, but it’s important to get prepared now, particularly in terms of updating recruitment and post-appointment practices.
“While it’s not anticipated that many individuals and charities will be directly affected by these changes, charities will still need to ensure they have appropriate ongoing monitoring processes in place to remain compliant.”
Ahead of 1 August, we recommend:
- Trustees and senior management complete a new declaration process as soon as possible to allow enough time for decisions to be made.
- Decide whether to apply for a waiver or for the individual to resign, if there is a concern that disqualification will apply. If resignation is chosen, consider succession planning to ensure a smooth handover.
- Going forward, ensure a process is in place to update personal declarations by trustees and senior management on at least an annual basis, with an expectation set that individuals will self-declare any change to their situation if it arises.