Roles - Relationships & Functions between a Board of Directors

Messrs G Owen & Co

Roles - Relationships & Functions between a Board of Directors | Board of Trustees

BOARD OF DIRECTORS:

(1) (a) The Members of a Board holding specific positions of office, i.e. Chairperson, Vice-Chairperson, Secretary, (as distinct from the ‘Company Secretary', outlined in (3) below; and Treasurer, (some times described as the ‘Management Committee’), but who, (within the meaning of the Companies Acts), are also known as “Directors’, comprises of elected Members from, and/or nominated by affiliated Organisations/Groups.

(b) Their role and function are to discharge the duties of that Office and to manage the day-to-day affairs of the Organisation/Group.

(2) The role, function and relationship of remaining Members of the Board of Directors not holding a specific office are to assist, co-operate, and collaborate with the ‘Management’ to achieve (1) (b) above.

(3) ‘Company Secretary’: The person holding this office must, in addition to (1) (a) above also ensure that the Organisation/Group conforms to statute and in particular the Companies and Charities Acts in force (and amended) from time to time. The Company Secretary has a distinct role and function as distinct from that of a ‘Secretary or Hon Secretary’, as is not to be confused by the two titles/descriptions.

(4) (a) “There shall be no minimum to the number of Members of the Committee”, otherwise stipulated in the Memorandum & Articles of Association.

(b) “The Committee” may, subject to such Byelaws as the Organisation/Group in General Meeting may from time to time by Resolution establish, and at any time appoint/co-opt any person to be a Member of the Committee either to fill a casual vacancy or by way of addition to the Committee”. “Any Member so appointed/co-opted shall retain his/her office only until the next Annual General Meeting, but s/he shall the be eligible for election.

BOARD OF TRUSTEES:

(1) The Officers holding this position also comprises of (i) elected Members from, and/or nominated by affiliated Organisations/Groups, (but not solely); and (ii) be a person or persons who’s professional background/qualification(s) would serve the interest of the Organisation/Group in achieving its “Aims & Objects”, e.g. A Bank Manager, Accountant, Specialist Consultant, Fundraiser, or Project Worker.

(2) (a) Their role, function and relationship, (as distinct from that of the Board of Directors), are to support the Board of Directors in executing its’ duties; to determine matters of Policy which the Board of Directors shall implement, having due regard to the advice and recommendations of any ‘Advisors Panel’ or “Sub-Committee’

(see below), may provide.

(b) “Advisory Panel” / Sub-Committee: The Organisation’s/Group’s Articles of Association may provide that the Organisation/Group may have an “Advisory Committee’ or ‘Sub-Committee’ composed of Members from time to time of the Management/Executive Committee, Board of Directors, or from another body, (if appropriate), which shall advise the Organisation/Group on its policy and the areas/aspects of the Organisation’s/Group’s objects in which the Organisation/Group shall from time to time operate and which shall assist in a consultative capacity the operation of the Organisation/Group.

(c) The position of ‘Trustee’, (unless otherwise provided by statute), will be in perpetuity. All persons elected to a Committee, whether holding a specific office or not are deemed a ‘Trustee’ in law and are subject to the provisions of statute relating to this. For further information or advice, visit the Charity Commission web site.

It is realised that in the case of some Organisations/Groups, owing to their small size, (as with many other similar bodies), the same personalities prevail with the end result that some or all Members of the ‘Board of Directors’ are also Members of the ‘Board of Trustees’. Ideally, and desirably, (in the long terms it is always hoped that an Organisation/Group will grow and develop, and that consequential of this new people will come forward and be elected, who can hold separate and distinct positions of office.

Clearly there is a desire for a three-pause role, each having a distinct and function, viz people to deal with the day-to-day work/management

people who can objectively, (without being clouded with specific daily issues), can determine where and how the Organisation/Group should progress for the future

Board of Trustees; and input from the areas of discipline(s) the Organisation/Group is involved in so as to reflect the community.

There are some misunderstandings and misconception as to the legal position with regard to the Organisation/Group being registered as a “company’ and using (or not) the title at the end of its’ name ‘Limited’

[Please see our web pages Limited Company (Under Guarantee) for Charities

Process

Search Links and Memorandum & Articles of Association

Specimen Sample which cover the issue of eligiability for examption.

As indicated above, the likelihood is that the Organisation/Group is a ‘small body and as such it was originally intended to avoid the need to establish the Organisation as ‘both’ a Limited Company (under Guarantee) and as a Charity.

From time to time, depending on the nature of the “Aims & Objectives’ of the Organisation/Group, and/or whether they have assets, e.g. own or lease a building, the Charity Commission may insist on certain requirements, for example having a ‘Trust Deed’. It has be found that bodies who have considered this course, and subsequently taken advice, that it is not advisable, (for reasons given below), to embark on, and register under a ‘Trust Deed’ as such.

The Organisation/Group is often a totally voluntary charitable body managed by part-time voluntary personnel who give-up their time to help and support. Under a ‘Trust Deed’ if, for example, a person were to accord their voluntary services to such a Trust and for reasons, outside the control of that person, or group of persons, the project were not to succeed, say for lack of sufficient funding, each of the volunteers serving would be individually and jointly legally liable to any debts due/incurred, or loss sustained at that time.

It is clearly unreasonable to expect someone to offer their free voluntary services and to expect them to pay if it did not work. Whilst, as a registered Company, legal liability still applies, it becomes ‘limited’, according to that laid down in the Memorandum & Articles of Association. This limited liability is not withstanding other legal liabilities in law, e.g. that it is shown to be genuine and not negligent on the part of any Officer(s), or that any criminal act was committed. Hence, in part the need for Committees to seriously considered ‘Trustee Liability’ insurance cover, information of which is covered on another page(s) in this web site.

An Organisation/Group is ‘Limited’ ‘Under Guarantee’, as opposed to having a ‘share capital’ and therefore there are no shareholders who derive profit from the financial gains made by the Organisation/Trust. It is, in effect, a not-for-profit body with no profit trading, as distinct from ‘fundraising’ for its cause in accordance with the “Aims & Objects”, as set out in its Memorandum of Association.

The Organisation/Group, (as opposed to a commercial/industrial Limited Company), is registered also under the Charities Act(s) and as such is unequivocally a ‘charity’. Under charity law it may not, nor does it permanently trade for profit

all proceeds raised are used for the promotion of the Organisation’s/Group’s charitable ‘Aims & Objects”.

In addition to the role, function and relationships outlined above, both the Board of Directors and Trustees have a legal responsibility, not only to comply with the provisions of the Companies Act(s), but also the Charities Act(s).

Please see also The Trustees Act 2000 at:

**Roles & Responsibilities of Trustees Presentation [In PowerPoint .ppt Format]:

Note: Our Training Presentation in the above includes a QuickTime movie especially commissioned on the subject.

Useful Contact(s):

Web Trust:

Filing your Annual Return & Accounts OnLine @ Companies House

[Pre-Registration & ‘Authentication Code’ must first be obtained before commencing].

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