Guidance for Charity Governors
Who are Charity Governors?
Charity Governors are the people who have control and management of a charity. They are responsible for making sure that the charity works to achieve its purposes and to provide public benefit – that is that the charity uses its resources in the right way to do what it was set up to do.
Charity Governors are called a variety of things. For example, they might be called trustees, directors, managers, a board or a committee. You do not have to be formally elected or appointed to be seen as a Charity Governor; anyone who exercises some degree of control over a charity might be held legally liable as a Charity Governor.
Neither do you have to run the charity on a day-to-day basis or make operational decisions to be a Charity Governor – the charity may have volunteers or employees to do this. A Charity Governor is the person (or one of a group of persons) who has the responsibility for taking the executive decisions about how the charity is run and what it does.
Is there a minimum or maximum number of Charity Governors?
The Law does not set out a minimum or a maximum number.
However, you should check your constitution as it may set out rules on the number of Charity Governors the charity must have and also as to the number of Charity Governors that must be present to make a meeting of the Charity Governors valid (to make it ‘quorate’). In addition the constitution might require that the Charity Governors be drawn from the membership of the charity or set out other conditions.
The duties of a Charity Governor
Whatever the name, a Charity Governor of a registered Jersey charity has specific duties and responsibilities under the Charities (Jersey) Law 2014. They might also have duties and responsibilities which arise under any other relevant law. For example if the charity is a company, the company directors will be the Charity Governors and they must also comply with their duties and responsibilities under the Companies (Jersey) Law 1991. A Charity Governor might also have specific duties laid out in the constitution of the charity.
The duties of a Charity Governor apply regardless of how big or small the charity is.
A duty is something that you must do. Every one of the Charity Governors has duties and no individual Charity Governor, for example the Chair or the Treasurer, has more responsibility than the other Charity Governors do. This is called ‘collective responsibility’. All the Charity Governors should work together to make sure that the duties are met.
The following is not an exhaustive list but covers the principal duties of a registered Charity Governor. He or she must:
- Seek to ensure in good faith that the charity acts in a manner that is consistent with its constitution, its registered charitable purposes and with its registered public benefit statement;
- Ensure that the charity’s assets are only used for the charitable purposes set out in it’s constitution in line with it’s registered charitable purposes statement and the registered public benefit statement;
- Ensure that, in giving effect to its registered charitable purposes, it provides public benefit to a reasonable degree;
- Ensure that the charity complies with any direction, requirement, notice or duty imposed on it by or under the Charities (Jersey) Law 2014;
- Ensure that the charity follows the rules of its constitution;
- Act with due diligence, as would a prudent person, to the best of their ability and skill;
- Act according to any duties set out in the constitution of the particular charity (it being noted that those duties cannot be less than the duties set out in the Law);
- Report to the Charity Commissioner any changes to the information provided to the Charity Commissioner and provide financial records and information as may be required by the Charity Commissioner;
- Report to the charity and to the Charity Commissioner any reportable matters as required by the Charities (Jersey) Law 2014 (see annex of Guidance Note 3a for further detail);
- Report any misconduct of a fellow Charity Governor to the Commissioner as set out in the Charities (Jersey) Law 2014.
A Charity Governor should know and understand what the constitution of her or his organisation says and means and it is good practice for each Charity Governor to have a copy of the most recent version of the charity’s constitution.
It is good practice to keep accurate records of meetings and decisions.
Can a Charity Governor be paid?
Yes but many if not most are not. Your charity must declare to the Commissioner any payment including expenses and payments in kind.
Your charity must also declare payments to people connected to Governors such as family members. Such information will appear on the public register and if you are in any doubt as to what to declare, you should contact the Charity Commissioner for guidance.
Conflicts of interest
There is a ‘conflict of interest’ where a Charity Governor is faced with a decision where the outcome might benefit her or him or her or his family, friends or business.
In that situation, a Charity Governor must
- do what is best for the charity and its beneficiaries, not what is best for the Charity Governor, friends, family or business interests.
- put the needs of the charity before the needs of any other organisation that he or she is involved with, either in a personal or professional capacity.
- decide whether it is appropriate for her or him to be involved in making the decision at all.
- declare what her or his interests are to the other Charity Governors so that the Charity Governors, as a whole, can decide whether it would be better for the conflicted Charity Governor not to take part in certain decisions and whether any other action is required. It is best practice for a charity to have a written policy that says what Charity Governors should do if there is a conflict of interest, and what happens if a Charity Governor does something wrong.Care should also be taken to consider whether there is any conflict of interest between the charity and any person or organisation who appoints Charity Governors. Any such conflict must be carefully managed.
What happens if a Charity Governor fails in their duties?
- There should also be a policy that makes it clear when a Charity Governor, her or his family or the organisation he or she works for can be paid, for services provided to the charity.
- The charity should keep an up to date list (register of interests) detailing where each Charity Governor works and any other organisations they are involved with, and the occasions on which an interest has been declared or a conflict of interests has arisen.
A failure to comply with these duties may be considered to be misconduct for the purposes of the Charities (Jersey) Law 2014 .
For further guidance, see the annex of the Commissioner’s Guidance Note 3a.
Misconduct is defined in the Charities (Jersey) Law 2014 as
- a contravention of a provision of the Charities (Jersey) Law 2014 or any enactments made under that Law;
- a contravention of a provision of the constitution of the charity or of the Law that applies to that constitution (for example breaching the Companies (Jersey) Law 1991 if the entity is a company);
- a contravention of a required steps notice;
- breaching an order of the Royal Court made either under the Charities (Jersey) Law 2014 or the Law that applies to the particular type of entity in question, or to any enactments made under those laws.
- Committing an offence, in relation to a registered charity (or to an excepted foreign charity or to an equivalent entity in another jurisdiction),
- under the laws that applies to that particular type of entity (or under any enactments made under that law) (for example breaching the Companies (Jersey) Law 1991 if the entity is a company);
- under the Financial Services (Jersey) Law 1998; the Banking Business (Jersey) Law 1991; the Collective Investment Funds (Jersey) Law 1988; the Insurance Business (Jersey) Law 1996; the Alternative Investment Funds (Jersey) Regulations 2012; the Income Tax (Jersey) law 1961; the Goods and Services Tax (Jersey) Law 2007; the Taxation (Land Transactions) (Jersey) Law 2009 – or any enactments made under those laws;
- under any enactment being an offence relating to money laundering or terrorist financing;
- under any other enactment or under customary law, being an offence involving deception or dishonesty;
- under the law of a jurisdiction other than Jersey, being an offence similar to any of the above.
- where a Charity Governor concurs in misconduct by the charity;
- where a Charity Governor assists or encourages another Charity Governor to engage in misconduct;
- where a Charity Governor becomes aware or ought to have become aware of any misconduct in relation to the charity or of the intention of another Charity Governor to engage in misconduct and actively conceals that misconduct or that intention or fails within a reasonable time to take proper steps to protect or to restore the property of the charity or to prevent the misconduct.
The Charity Commissioner has powers to take action against Charity Governors in respect of misconduct. For example, the Charity Governor could be permitted to continue in her or his role with conditions or the Commissioner could serve a Required Steps Notice on the Charity Governor or the charity or both, or the matter could be referred to the Court. Where a Charity Governor has acted reasonably and honestly, that is very unlikely to be treated as misconduct.
Furthermore, both the Commissioner and the Attorney General may apply to the Royal Court for a disqualification order against a particular person if they consider it is in the public interest that that person should not be a governor or in any way, whether directly or indirectly, be concerned or take part in the management of a registered charity.
A person who acts as a Charity Governor whilst disqualified is guilty of an offence punishable by a fine and/or imprisonment for up to 2 years.
If you as a Charity Governor know that one of your fellow Charity Governors is disqualified, has been guilty of misconduct or has not reported a reportable matter, and you do not do anything about it, you could be in breach of your own duties.
As part of the application process and at the time of filing its annual return, a charity is required to confirm to the Commissioner that each of its Charity Governors has signed a Governor’s Declaration.
A copy of a model declaration can be found on the website under guidance and regulation.
If a person cannot sign the declaration, they may still be permitted to be a Charity Governor with the permission of the Commissioner, who may attach conditions if she or he considers it necessary to do so.
The declaration confirms that there is no reportable matter which applies in relation to the Charity Governor filling in the declaration.
A reportable matter is defined in Article 19 of the Charities (Jersey) Law 2014 as where the person –
- has engaged in misconduct as a governor of a registered charity, being misconduct that led to the service of a required steps notice on that governor or on that charity or on another governor of that charity;
- is the subject of a disqualification order, or of any other restriction on his or her acting as a governor, imposed under this Law;
- has been disqualified from or for being a charity trustee or trustee for a charity under the law of any part of the United Kingdom, or from holding any equivalent position under the law of any other jurisdiction;
- has been disqualified from being a company director, or has been made subject to any equivalent disqualification under the law of any jurisdiction other than Jersey;
- is bankrupt or otherwise insolvent, whether under the law of Jersey or elsewhere;
- has a conviction (whether or not spent) for an offence under this Law;
- has an unspent conviction for an offence falling within Article 2(10)(b) [a summary of which is set out at (v) above in the section on misconduct]
- falls within any other description that may be prescribed by the Minister by Order [none at the current time]
A Charity Governor must report any reportable matter promptly to the charity and to the Commissioner.
A person must not act as a Charity Governor at any time after reporting a reportable matter in respect of herself or himself unless permitted to do by the Commissioner or the Royal Court. If a person does so act notwithstanding, he or she could be found guilty of a criminal offence.
It is good practice to consider whether any other checks need to be carried out such as a criminal records check for Charity Governors working with vulnerable persons.