Currently existing rules extend to trustees only and protect charities from being run by people who meet certain criteria or have specific unspent convictions and who are not authorised by a Charity Commission waiver to serve as a trustee.
In future, the updated rules will, for the first time, also stop disqualified people from being able to act in some charity senior manager positions, including those of chief executive or chief finance officer.
The current reasons for disqualification are mainly bankruptcy related, and also include unspent convictions for crimes involving dishonesty or deception. The new reasons include being on the sex offenders register and certain unspent convictions, such as for terrorism or money laundering.
Anyone who will be disqualified when the rules change on 1 August can apply for a waiver of the disqualification from 1 February.
The Charity Commission says its decision depends on whether it thinks giving a waiver is in the best interests of either a named charity or named charities; a class of charities; or all charities, where a general waiver is applied for.
In considering whether to give a waiver, the Charity Commission will look at factors such as the seriousness of the conduct and circumstances that led to the disqualification; how long ago it occurred; and whether the conduct that led to disqualification damaged a charity.
In the case of a disqualification for reasons related to financial management, an individual would need to show their conduct was not reckless, dishonest or incompetent, or that the financial issues were beyond their control.
As before, a disqualification lapses once a conviction is regarded as spent. However, the Commission says that in the early days of the changeover to the new system there may be individuals who will find they are now considered to be disqualified, although it is only a matter of weeks after the deadline before their conviction is spent, and it will consider a waiver in such cases.
Factors which make it less likely the Commission will give a waiver include, for example, acting with personal gain in mind or with recklessness, dishonesty or incompetence in financial matters, or cases where a conviction relates to an offence committed while working with a charity.
Applicants for a waiver will be required to show evidence that the majority of the charity’s trustees support the idea of giving them a waiver and that their role is essential to the charity and cannot be carried out by another individual or in another way, such as an advisory capacity.
In the case of an undischarged bankrupt, the trustees’ will be asked for their views on whether the legal limitations on the individual’s activities could damage the charity. For example, for an unincorporated charity, the statutory limitations on obtaining credit could cause difficulties in the relationship between the charity and its bankers.
At the conclusion of its assessment the Commission will offer either a waiver for a named charity or charities, which allows someone to be either a trustee or senior manager, or a senior manager waiver which means they can take up a chief executive or chief finance officer role but cannot act as a trustee.
The Charity Commission can refuse to give a waiver in circumstances where it considers the risk to a named charity or charities, class of charities, or to the charity sector generally, outweigh the potential benefit. Individuals will then remain, or become disqualified under the new rules, until either the conditions of their disqualification no longer apply, or they make a successful appeal to the Commission to review its decision, or appeal the decision to the Charity Tribunal.
The full guidance can be found HERE
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