New rules for charities to include time limit on trustees’ service

A new governance code for charities – to include a limit on the number of years a trustee can remain in place – is due to be introduced next year.

The Charities Regulator established a panel earlier this year to make proposals on the governance of charities and to support trustees in their duties. Public meetings were held in Dublin, Cork and Galway last month, an online questionnaire was launched while the Regulator also accepted written submissions.

John Farrelly, chief executive of the Charities Regulator said “what came out of the meetings strongly was how long charity trustees should be in place”.

“What participants were worried about was some people can set up or join a charity, do great work but then they never leave and that’s actually become an issue,” he said.

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Thinking Anew

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“They may have been useful at a particular time but you need to reinvigorate, you need fresh blood and new thinking.

“Our survey found 80 per cent believed there should be a maximum number of years for serving as a charity trustee in a particular charity.”

Mr Farrelly said most were in favour of a maximum period of five and nine years for a person to remain a charity trustee. “Anything over that really isn’t good for the charity,” he said.

The online questionnaire was answered by nearly 900 people, with 46 written submissions received.

“They all wanted a governance code; there was a strong demand for that,” Mr Farrelly said. “The other thing was that 95 per cent of people wanted reasonable checks on suitability of charity trustees. There was a sense from people that you just need to make sure there’s reasonable checks.”

Voluntary code

A voluntary governance code was launched in 2012 for community, voluntary and charitable organisations with a small percentage adhering to it.

Mr Farrelly said “a lot of people felt something new needed to be done”.

“Participants feel they need a code that tells them how to govern well, an infrastructure on how to manage well and that it should be produced by the regulator.”

The panel is due to make recommendations to the regulator in the coming weeks. “If the panel opt for [one], I’d like the governance code to be delivered by mid-2018 definitely,” Mr Farrelly added.

“Whatever happens, it needs to be proportionate to the size of the charity and the work that particular charities do.”

Just under a fifth of charities have yet to file their annual reports with the Charities Regulator. Of the 5,694 charities due to file a 2016 annual report by October 31st, 86 per cent have so far done so.

Those who have missed the deadline are sent automated emails every seven days. If the organisation has still failed to file its annual report 90 days after the deadline, a registered letter is sent as part of an escalated process that could ultimately lead to a charity being deregistered.