In part four of our ‘Virtual Meetings’ series, our Corporate and Commercial team provides advice on how unincorporated charities and charitable trusts can validly hold remote meetings.
In June 2020, the UK introduced the Corporate Insolvency and Governance Act 2020 (the Act) which contains temporary measures to relax the rules on meetings for some organisations. Unfortunately, charitable trusts and unincorporated charities were not included in the list of “qualifying bodies” to which the Act relates. These charities will therefore need to rely on the provisions about meetings in their governing documents.
If there are no express provisions allowing electronic meetings, a virtual meeting may still be held as long as there are no express or implied provisions prohibiting electronic meetings and/or no express or implied provisions requiring members to attend in person.
Charitable trust and unincorporated charities can only conduct a meeting by telephone conference if there is a specific power to do so in the governing documents. The courts have decided that a valid meeting normally consists of people who can both see and hear each other so even if the governing documents allow electronic meetings, they need to specifically permit or include telephone conferencing for attendees joining by telephone to count in a quorum or vote. They may continue to contribute to the discussion on any proposal at the meeting but would not be able to count in a quorum or vote.
If there is an express prohibition on electronic or telephone meetings or there is any doubt about the charity’s ability to hold a virtual meeting, the trustees could consider amending the governing documents to include an express permission. This will only be an option if the constitution allows changes to be made by written resolution. If a meeting is required to approve these changes, the charity will be a catch-22 situation.
The Charity Commission has published guidance which says it will take a “pragmatic and flexible” approach where meetings are held virtually in order to comply with social distancing measures, even where this may appear to be contrary to the rules of the charity’s governing document. So arguably, a meeting could be held using digital solutions only if doing so is in the best interests of the charity. This should be done as a last resort after seeking legal advice and any decisions to proceed with a virtual meeting in these circumstances should be fully documented for good governance.
The Charity Commission has also recognised that virtual meetings are just not a viable solution for some charities at the moment, either because the constitution does not allow it or because it would be difficult for the individuals involved. In these circumstances, charity trustees should follow the rules in their constitution allowing for postponement, adjournment or cancellation. If there are no such rules, but they decide that this is still the best course of action for the organisation in the current circumstances, the reasons for this decision should be fully recorded to demonstrate good governance.
If a charity is uncertain about its position, it should seek legal advice to fully understand its obligations and how to comply with them.
The Virtual Meetings Series: