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Options for Implementing the Fourth Principle by ROo94K


									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.
   Company limited by guarantee
   Industrial and Provident Society
   Royal Charter Body
   Community Interest Company
   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
Who is the Board? (1)


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
 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
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
 Mission (staying on track through listening
  to diverse voices of stakeholders)
 Practical support (through volunteering)

               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

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