Options for Implementing the Fourth Principle

Thea Longley

20 September 2012

What will we cover?

Introduction – legal forms Terminology Democracy vs board skills – the issue and

possible solutions SE requirements Bear Traps Why does membership matter? Questions as we go

Legal forms – boring but important!

Lots of legal forms for membership organisations e.g.

Incorporated: Company limited by guarantee Industrial and Provident Society Royal Charter Body Community Interest Company

Unincorporated: Unincorporated association

Special status options

Possible status: Charity?

What is a constitution?

Constitution = governing document

Company → Articles of Association

IPS → Rules

Royal Charter → Charter

Unincorporated Association → rules/ constitution/byelaws (lots of names)

NB: may also be: standing orders, byelaws, regulations etc.

Why does the Constitution matter?

Sets out procedures for meetings, appointments etc.

Must be followed or decisions can be challenged

Who is the Board? (1)

Board

Members

Who is the Board? (2)

Directors Management committee Council

etc etc

Who are the members?

Members can be: Democratic (members in a legal sense)

with legal rights to vote at the AGM, elect in whole (or part) the Board and dismiss Trustees (e.g. National Trust); and

Participative (members in a colloquial sense) these can be termed Friends or Supporters (e.g. Tate Gallery).

More Terminology

Nominate = put forward someone for election or appointment

Appoint = put into a position Shadow director = someone who acts as if they

are on the board but who hasn’t been appointed to the board

Elect = put into a position by an election Co-opt = usually someone appointment by the

Board to fill a vacancy or as an additional Board Member

Democracy and Board Skills – get the balance right

What is the problem? Appointed vs elected

Possible solutions

Appoint to posts – e.g. “Treasurer”, “Regional representatives”

Selection Panel, Appointments Committee, Nominations Committee

Co-option Terms in office Automatic retirement and sunset provisions Staggered retirement to ensure continuity

Lots of variations

Do co-opted board members have to be reappointed at the AGM or not?

Selection panel only those selected put forward for

members to elect all those nominated put forward with flags

on those recommended selection panel appoints? who appoints selection panel?

SE requirements

Open recruitment Well balanced 1/3 independent Terms of office 2x4 years

Bear Traps

Mutual Trading exemption Member buy in – consultation is key!

Why does membership matter?

Legitimacy (voice) Sustainability (secure income and a market

feedback) Mission (staying on track through listening

to diverse voices of stakeholders) Practical support (through volunteering)

CONTACT

Thea Longley

Charity and Social Enterprise

Co-head of Sports Group

Bates Wells & Braithwaite London LLP

2-6 Cannon Street

London EC4M 6YH

Tel: 020 7551 7777

t.longley@bwbllp.com