COVID-19 and charities: Charity governance FAQs

Pre-coronavirus, the Commission’s guidance on Charities and Meetings recommended that at least one physical meeting of the charity trustees take place each year and other meetings would be a question of the terms of the charity’s constitution – not all constitutions are sufficiently flexible to allow meetings to be held, eg, by telephone or online. Responding to the current crisis, the Charity Commission’s Coronavirus (COVID-19) guidance for the charity sector provides:

In essence, trustees should check their governing document first to see what powers they have and what other options (such as amending the document) may be available. However, the Commission accepts that, even if you do not have power in your governing document, being able to hold trustee meetings remotely is going to be essential at present and trustees need to take a pragmatic approach here to enable them to make the necessary decisions, with the technology available to them, to manage their charity during the crisis.

That does not mean that governance goes out the window – quite the opposite. It is more important than ever to make and record your decisions carefully right now. The Charity Commission’s guidance, It’s your decision, has sensible guidance for trustees here.

A situation may arise where a decision is needed to be taken sooner than a remote trustee meeting can be scheduled. Again, trustees should refer to their governing document to check what is (or is not) permitted for trustees’ decision making.

The Charity Commission guidance,  mentioned above is helpful here too, noting that, if making the decision without a meeting does not breach any requirements of the governing document the trustees can proceed if they all agree. There are some practicalities to consider here, eg:

• the trustees should agree the means by which they will make the decision – eg whether by email or some other form;
• they need to be clear when they are being asked to make a decision and how they should evidence it (eg a simple ‘I agree’ or ‘I don’t agree’ or something else); and
• they should be aware of security concerns, especially where a trustee may be using a shared email address – how will the trustees know that an email is from the right person?

It is also important to observe the other governance requirements for decision-making, such as dealing with conflicts of interests and, as ever, the trustees should be careful to record the decision.

If the governing document prohibits decision-making outside a meeting, or otherwise imposes conditions which are not practical under lockdown, then the position is likely to be as for the question above on remote meetings – see if there may be other options, such as amending the governing document but, if the trustees decide they have to proceed this way, the Commission is likely to understand. The trustees should be aware, however, that they may be expected to justify why it was not possible to hold a meeting by remote means and they should take even more care over the decision-making and recording of the decision.

In the current uncertain times, trustees will need to react quickly in far from ideal situations. Where possible, trustees should take steps now to consider possible contingencies such as those among their number and/or key personnel falling ill or otherwise being unavailable. Eg:

• who will cover for key personnel (chief executive, chief financial officer etc) and who will deputise if the Chair is unavailable?
• if key administrative personnel are unavailable, who will cover and do you have access to all the relevant information (contact and log-in details, meeting schedules, relevant deadlines etc)?
• if you are concerned you may lack a quorum of unconflicted trustees, how will you pre-empt that? Is it realistic to recruit? Or can you change the quorum requirements?
• similarly, as referenced in the previous questions, what does your constitution say about decision-making and meetings? Is it fit for current purposes?

Planning and agreeing an approach now will help the trustees to weather any of these contingencies better, and with less strain on those involved, should they arise.

If you are already in a situation where you do not have a quorum of unconflicted trustees available for decision-making, and you have no scope to change that, again you should look to the constitution to see what it says you are permitted to do in those circumstances. If that offers no help and the trustees proceed, you are taking a risk that the decision may be set aside, with potential personal liability if the decision may involve loss or a claim against the charity – so it is a serious situation. If you think you are in that position, we would say please pick up the phone to discuss it with us – there may be other options for you, but these need to be determined in the circumstances of the case.

From speaking with the Charity Commission, we understand that they will accept an electronic signature on the accounts, but would advise the trustees to keep a record confirming that they had read the accounts and had authorised the electronic signature of one of their number in light of the current COVID-19 situation. If, therefore, one of the trustee number is able to add an electronic signature, then this should suffice provided the conditions identified by the Commission are met.

The Charity Commission has published guidance about filing annual returns during the pandemic. Wherever possible, the Commission urges charities to try to get their annual reports filed on time. However as an immediate step, the Commission has stated that where charities are due to submit an Annual Return imminently, but feel unable to do so, they can email the Commission to request a filing extension at [email protected], including the charity name and registration number. This topic remains under further discussion with the government, so updated announcements may appear in due course.

If you are unable to file your annual accounts on time, for example because of logistical difficulties with your AGM, the Charity Commission has confirmed in its Coronavirus (COVID-19) guidance for the charity sector that it will consider requests for a filing extension, on the same email address ([email protected]), again providing the charity name and charity number.

The government has announced that, from 25 March 2020, businesses (which includes all companies registered by Companies House) will be able to apply for a three month extension for filing their accounts.

To avoid a penalty, it is still necessary to apply for the three month extension to be granted. Companies House has announced that if the application ‘is based on issues around COVID-19, you’ll be automatically and immediately granted a 3 month extension’. There are, though, some potential exceptions and Companies House still urges companies not to wait for an extension decision if it is possible to file by the deadline – please see the guidance.

Applications can be made through the Apply to extend your accounts filing deadline page.

Where charity accounts have not yet been approved, the Charities SORP Committee has produced guidance on COVID-19 control measures and charity financial reporting. This is an advisory document aimed at helping those preparing accounts, as well as auditors and independent examiners, consider how to report in light of the current crisis.

Updated on 10 June 2020:

The Charity Commission FAQs, Coronavirus (COVID-19) guidance for the charity sector, acknowledge the challenges charities face at this time.

The Charity Commission initially asked trustees to continue to report, in accordance with its serious incident reporting guidance, and to use their judgment in deciding whether an incident is significant in the context of their charity and should be reported to it. However, on 3 June 2020, the Commission issued supplementary guidance and examples on reporting serious incidents in the pandemic.

If you are concerned about an incident which has arisen within your charity, or are unsure about whether an incident needs reporting, please get in touch with your usual BDB Pitmans contact and we will be happy to assist.

The Charity Commission’s guidance, Coronavirus (COVID-19) guidance for the charity sector, acknowledges the ‘spirit of charity and community that brings people together’ and appreciates ‘that people will want to help others during the challenges we are all facing’. It goes on to note, however, that ‘now more than ever it is critical to ensure that charities protect and safeguard their beneficiaries, volunteers and staff’ and that this is ‘all the more relevant for those directly helping communities or vulnerable members of society who are self-isolating’.

The Commission’s guidance on safeguarding and protecting people will be an important resource to help identify and manage risks and to keep people safe. In addition, NCVO has produced guidance specifically aimed at protecting staff, volunteers and beneficiaries in the context of COVID-19.

The Disclosure and Barring Service (DBS) has also put together a Factsheet and FAQ document outlining DBS requirements for those organising a community volunteering group and also for individuals wanting to assist in their local community.