can vol org director be an employee too?

ali-t

I haven't been able to find the answser by googling so thought somone on here might know the answer.

The scenario is this - A member of the board of directors for a medium sized charity who receives no financial wage or benefit for being on the board has been asked if they would like to work p/t on a sessional basis (for pay as a normal employee would) for the charity. Is this possible?

I have concerns about any possible conflict of interests but have been informed that this is not problematic. Any thoughts?

ETA: the board member is part of a very small board of directors and would not be on the board as staff rep but as a full director

Savvy_Sue

What does your governing document say?

I think it is potentially problematic: when we paid one of our trustees to deliver some training we had to get clearance from the Charity Commission, I believe, or change our governing document, or something.

ali-t

I don't know as I haven't seen it and don't recall anything mentioned.

Savvy_Sue

Well, that's the key document: if it says you can do it in your governing document, you can do it. If it says you can't, it's problematic. If it says nothing on the subject, I'd still say it was problematic.

Couple of useful sites if you need to know this kind of stuff: Independent Examiners produce a very readable bulletin (at least monthly) and it could be worth searching their site and phoning for some advice.

Sandy Adirondack produces a Legal Update: that's another site where searching around could be useful.

And if you find your local volunteer bureau - google volunteer plus your area - they may also be able to help.

Thinking back, when we've taken Trustees on to do regular work, they've resigned as Trustees OR we have only reimbursed expenses, apart from that one case I mentioned where we paid a Trustee for their professional services.

antrobus

According to the Charity Commission - http://www.charity-commission.gov.uk/Publications/cc3

F2. Can trustees be paid for their duties?
The short answer
Generally, no. Most trustees are unpaid, and must not benefit in any way from their connection with the charity. There are limited exceptions to this rule and the 1993 Act allows trustees to be paid in certain circumstances for providing services to the charity over and above their normal trustee duties.

F3. Can a trustee be employed by the charity?
The short answer
Generally, no because trustees must not gain from their position. Again, there are limited exceptions to this rule.

The document 'Trustee expenses and payments (CC11)' - http://www.charity-commission.gov.uk/Publications/cc11.aspx - gives more details. It does state that;

A charity can pay a trustee for the supply of any services over and above normal trustee duties. The decision to do this must be made by those trustees who will not benefit. They must decide that the service is required by the charity and agree it is in the charity's best interests to make the payment and must comply with certain other conditions.

Presumably the offer to "work p/t on a sessional basis" relates to the 'supply of services over and above normal trustee duties' so it is possible. But you would have to comply with the 'other conditions'. One of which, as referred to above, refers to the contents of the governing document. If that prohibits the employment of trustees, then you can't do it. Unless (of course) the charity wants to go throught the rigmarole of amending its governing document.

ali-t

Thanks for the input, I will ask for the relevant documents but it has confirmed my suspicion that there is a definite conflict of interest there.

steve1980

antrobus wrote: »

According to the Charity Commission - http://www.charity-commission.gov.uk/Publications/cc3

F2. Can trustees be paid for their duties?
The short answer
Generally, no. Most trustees are unpaid, and must not benefit in any way from their connection with the charity. There are limited exceptions to this rule and the 1993 Act allows trustees to be paid in certain circumstances for providing services to the charity over and above their normal trustee duties.

F3. Can a trustee be employed by the charity?
The short answer
Generally, no because trustees must not gain from their position. Again, there are limited exceptions to this rule.

The document 'Trustee expenses and payments (CC11)' - http://www.charity-commission.gov.uk/Publications/cc11.aspx - gives more details. It does state that;

A charity can pay a trustee for the supply of any services over and above normal trustee duties. The decision to do this must be made by those trustees who will not benefit. They must decide that the service is required by the charity and agree it is in the charity's best interests to make the payment and must comply with certain other conditions.

Presumably the offer to "work p/t on a sessional basis" relates to the 'supply of services over and above normal trustee duties' so it is possible. But you would have to comply with the 'other conditions'. One of which, as referred to above, refers to the contents of the governing document. If that prohibits the employment of trustees, then you can't do it. Unless (of course) the charity wants to go throught the rigmarole of amending its governing document.

The board member is not a trustee, they receive NO financial wage or benefit.

ali-t

steve1980 wrote: »

The board member is not a trustee, they receive NO financial wage or benefit.

I did wonder about that. Board members are voluntary positions but do have to be registered with companies house. There is a significant level of responsibility for decision making so for me it would be a conflict of interest as it would lose the independent element.

Savvy_Sue

Hang on: we'd need to know your structure to be clear about this.

I work for a charity which is also a Ltd Company. Our Trustees are also Directors of the company. They meet as a Board. Paid staff also attend, but we wouldn't / couldn't employ any of the Trustees / Directors - conflict of interest!

thewilderness

Conflicts of interest need to be declared and it is possible to pay Directors or Trustees.

And just because someone is paid by a Chairty does not mean there is a lack of transparency - I as a Director have been paid for some training I have delivered and specialist consultancy - all with the auditor and Charity Commission being happy!

skater_kat

could do it as honorarium?