Please click here to read OSCR’s COVID-19 Guidance for Charities

3. Charity meetings and governance

Published: 30/03/2020
Updated: 29/06/2020

Most charities will need to change the way they work during the outbreak. Decisions about how you can operate during this time need to be taken collectively by the charity trustees, where possible. Whilst decisions on the short term measures will need to be taken quickly, the impact on longer term operations also needs to be carefully considered. 

Major decisions and changes need to be recorded and advice taken where necessary.

For general information, please read our guidance on how to manage your charity.

SCVO has key points on governance and links to other sources of information relating specifically to the COVID-19 pandemic here.

 


Holding an AGM

COVID-19 is going to have an impact on your ability to hold your Annual General Meeting (AGM). For many charities it is a requirement in the governing document to hold an AGM, and often the governing document will set out how you need to do this.

There are a number of options available to charities, some of which may depend on your legal form.

  1. Hold a virtual AGM

Meeting face-to-face is not going to be possible at the moment so holding meetings virtually will be a good option.  Some charities have specific provisions in their governing documents to allow AGMs to take place using digital solutions such as phone or online. If you do not, you may be able to amend your governing document to change how or when your AGM is held, see below.

If you cannot make these changes, we are happy that charities hold their AGMs in this way even if the governing document doesn’t say anything about this.  This will allow charities to have important discussions and to take decisions at this difficult time.  Where you decide to hold your AGM virtually, you should record this decision, including any voting mechanisms to demonstrate the good governance of your charity. 

There are lots of free and low cost options for virtual meetings. SCVO have tips for virtual meetings and remote working.

Holding a virtual AGM will be easier for some charities than others. We know that not everyone has access to the technology required.

  1. AGMs and accounts

The COVID-19 pandemic is going to have an impact on your ability to hold your AGM.  This might make it difficult for you to finalise your annual report and accounts.

Wherever possible, we would ask you to try to get these to us on time.  All you need to do is log on to OSCR Online as usual and scan us your report and accounts.  However, we understand that it might be difficult for some to finalise their annual report and accounts, we will take an understanding and proportionate approach to this and no charity in this situation will be penalised for being late. See the Reporting to OSCR section of the guidance for more on accounts.

  1. Postpone your AGM and other meetings

You might decide that as a result of COVID-19 and the official health advice postponing your AGM or other meetings until restrictions are lifted or meetings can be held observing physical distancing rules is the best option. It may be that by postponing these meetings, you are not fulfilling what it says in your governing document or you will not be able to finalise your annual report and accounts. Where you decide it is necessary to postpone you should record this decision, demonstrating good governance of your charity.  We will be understanding and proportionate should any concerns be raised with us about the postponement of AGMs or other meetings. 

  1. Update your governing document to allow for virtual meetings

You should check to see if you can amend your governing document to change how or when meetings are held. Whether you can do so will depend on what your governing document says about making changes and what your charity’s legal form is.

One thing that applies to all charities is the need to make sure you are quorate when you make any decision to update your governing document.

If you do have the power to make these changes, once they have been made, you must send a copy of the new governing document to OSCR using the Notification of Changes Made form.

You should also update other relevant regulator, such as Companies House.

SCIOs and charitable companies  

The Corporate Insolvency and Governance Act 2020 means that SCIOs and companies who were to hold an AGM between 26 March 2020 and 21 August 2020 can delay it until 30 September 2020 at the latest. The Act temporarily overrides the timing requirements in a charity’s governing documents.

The Act makes further provisions for members’ meetings (not trustee or director meetings) of SCIOs or charitable companies, held between 26 March 2020 and 30 September 2020:

  • These meetings may be held by phone / video or other electronic means, even if the governing document requires them to be held physically face-to-face
  • members still have the right to vote, but the charity can require this to be done electronically, or by other means (such as by post)
  • members will not have the right to attend a meeting in person or participate in meetings other than to vote.

You can use these provisions to hold the members’ meeting virtually rather than delaying if this is the best route for your charity. You should record your decision and minute the meeting as you normally would. You also need to make sure you meet any other requirements in your governing document around members’ meetings.

You will also need a clear system to make sure only those eligible to vote can do so and that you record who has voted and the percentages of votes cast.

These provisions also apply to community benefit and friendly societies.

The deadline of 30 September may be extended if the UK Government thinks this is needed. We will update with any changes if they happen.

Meeting face-to-face is not going to be possible at the moment so holding meetings virtually will be a good option.  Some charities have specific provisions in their governing documents to allow meetings to take place over the phone or using digital solutions. If you do not, you may be able to amend your governing document to change how or when your meetings are held.

However, in the current situation, we are happy that charities hold their meetings in this way even if the governing document doesn’t say anything about this.  This will allow charity trustees to have important discussions and to take decisions at this difficult time.  Where you decide to take this virtual route, you should record that you have done this, demonstrating good governance of your charity. 

There are lots of free and low cost options for virtual meetings. SCVO have tips for virtual meetings and remote working.

SCIOs and Charitable Companies 

The Corporate Insolvency and Governance Act 2020 means that SCIOs and companies who were to hold an AGM between 26 March 2020 and 21 August 2020 can delay it until 30 September 2020 at the latest. The Act temporarily overrides the timing requirements in a charity’s governing documents.

The Act makes further provisions for members’ meetings (not trustee or director meetings) of SCIOs or charitable companies, held between 26 March 2020 and 30 September 2020:

  • These meetings may be held by phone / video or other electronic means, even if the governing document requires them to be held physically face-to-face
  • members still have the right to vote, but the charity can require this to be done electronically, or by other means (such as by post)
  • members will not have the right to attend a meeting in person or participate in meetings other than to vote.

You can use these provisions to hold the members’ meeting virtually rather than delaying if this is the best route for your charity. You should record your decision and minute the meeting as you normally would. You also need to make sure you meet any other requirements in your governing document around members’ meetings.

You will also need a clear system to make sure only those eligible to vote can do so and that you record who has voted and the percentages of votes cast.

These provisions also apply to community benefit and friendly societies.

The deadline of 30 September may be extended if the UK Government thinks this is needed. We will update with any changes if they happen.

 

It may be that you have been set up to host a specific event, for instance a festival or an agricultural fair. It may be that this event is specified in your governing document.  We know that it will be impossible for you to do that if the event is taking place in the next few months. We completely understand and you do not need to get our permission to postpone your events.

A quorum refers to the minimum number of people necessary to make decisions and conduct the charity’s business. A quorum can refer to:

  • the number of charity trustees required for board meetings, or
  • the number of the charity’s members required for membership meetings, for example Annual General Meetings (AGMs).

This number is often set out in the charity’s governing document.

In the current situation, we are happy that charities hold their meetings virtually to help make sure you have enough people to make decisions and form a quorum, even if the governing document doesn’t say anything about virtual meetings. There are lots of free and low cost options for virtual meetings. SCVO have tips for virtual meetings and remote working.

We know you may be concerned that there may be circumstances where you cannot get enough charity trustees or members to form a quorum because of COVID-19 but need to make decisions on the future of your charity. 

If this is the case you should check your governing document to see if it allows you to change the number of people required to form a quorum. If yes, you could change the number now by following the provisions set out in your governing document.

You should notify us of this change using the Notification of Changes Made form.

If you find yourself in a position that you cannot form a quorum you should check your governing document to see what it says about appointing additional people to form a quorum to make valid decisions.

If there is nothing specific in your governing document, it may be that the law governing your legal form (for example Company law or Trust law) makes provision for the appointment of additional charity trustees or members. If you are unsure you should seek legal advice on how you can resolve this issue and the risks to the charity and charity trustees in making decisions without a quorum.

If you have tried to get enough people to form a quorum but are unable to, any decisions you make may be invalid and may be open to challenge from people affected by those decisions, for example, employees or service users.

We will be proportionate when assessing any concerns raised with us about decisions made without a quorum. However, others affected by those decisions may take a different approach. So you should take advice and fully understand the implications of any decisions you make.

We will look at whether your actions were in line with charity trustee duties and if you acted in the interests of your charity and with care and diligence.

We are aware that in the current circumstances many charities’ trading subsidiaries may be finding it difficult to operate and be facing financial difficulties.

As with other businesses, support for trading subsidiaries may be available from government or other sources – see UK Government information for businesses and employers, which includes companies and Community Interest Companies.

The UK Government have announced plans to change to insolvency laws to allow companies ‘breathing space from creditors enforcing their debts for a period of time whilst they seek a rescue or restructure’.

The UK Government will also temporarily suspend wrongful trading provisions to ‘give company directors greater confidence to use their best endeavours to continue to trade during this pandemic emergency, without the threat of personal liability should the company ultimately fall into insolvency’.

Legislation to introduce these changes will be introduced in the UK Parliament soon.

In any case, as a charity trustee you have a duty to put the interests of your charity first. If a trading subsidiary of your charity is likely to be operating at a loss for a sustained period of time then you need to decide what actions are in the interest of the charity. 

The reason for setting up a trading subsidiary is usually to generate funds for the charity and to protect the charity’s assets. Where the charity is supporting the trading subsidiary and not receiving any of the benefits you could be putting charitable assets at risk.

You need to consider the situation, taking into account the whole picture, including the immediate and longer term implications for the charity and its operating model. 

For example, it might be in the charity’s interest to provide short term support to help a trading subsidiary to be mothballed so that it can be reopened when things change to provide long term support for the charity. 

You should make sure to record your consideration and all decisions made so that it is clear why you have taken a particular course of action in the interests of the charity.