Whilst we’d all hope that charity trustees are willing and able to participate fully throughout their term and bring only benefit to the charity, unfortunately, that’s sometimes not the case.
Why remove a charity trustee?
However awkward it might be, it might be in the charity’s best interest that a charity trustee be removed from their office and prevented from acting. Some of the reasons it might be best to remove a charity trustee include:
- refusing to attend meetings and participate in decisions;
- becoming physically or mentally incapable of acting as a charity trustee;
- conducting themselves in an unacceptable manner; or
- posing a risk to the charity’s reputation.
What is the process of removing a trustee?
The first port of call is to check your charity’s governing document to see what it says about removing a charity trustee from office. A well-drafted governing document will include express rules on how charity trustees are appointed, retire and can be removed from office. If your charity is a charitable incorporated organisation (a CIO), your charity’s governing document (its constitution) must include provisions around the appointment, retirement and removal of charity trustees.
The provisions may well require the relevant charity trustee to be entitled to make representations relating to their removal or to satisfy specific meeting requirements.
What are the statutory powers to remove a charity trustee?
However, if your governing document does not set out sufficient provisions regarding the removal of charity trustees, the second step is to look at your Charity’s structure. This will help you understand what statutory powers the charity trustees can use to remove the charity trustee.
Unincorporated charities (i.e. trusts) have the statutory power to replace a charity trustee under the Trustee Act 1925 in certain circumstances. This process removes the charity trustee concerned and replaces them with a new individual to act in their place. Any such replacement must be dealt with in writing.
Charitable companies can rely on the statutory power contained in the Companies Act 2006 to remove a charity trustee. In this instance, the members of the charitable company can pass an ordinary resolution at a general meeting to remove a charity trustee, provided special notice has been given.
What is the Charity Commission and the High Court’s involvement in removing trustees?
Alternatively, if your governing document doesn’t include any sufficient express powers to remove a charity trustee and the charity trustees are unable to rely on the statutory powers, both the Charity Commission and the High Court have the power to remove a charity trustee. These options are open to all forms of charity.
The Charity Commission can make an order under section 80 of the Charities Act 2011 to remove a charity trustee for several reasons, such as being incapable of acting because of a mental disorder or if they have not acted as a charity trustee and refuse to make a declaration of willingness or unwillingness to act.
The High Court can exercise its inherent jurisdiction to remove charity trustees or unincorporated charities (and this is likely to apply to charity trustees of charitable companies, too) in an attempt to ensure charities are properly administered. However, it is worth noting that any application to the High Court to remove a charity trustee will amount to charity proceedings for which a Charity Commission Order authorising the proceedings will be required.
Our recommendation
Despite statutory powers being widely available, their application may not be suitable in all circumstances, and involvement from the Charity Commission can require time and complexity. Therefore, we recommend reviewing your governing documents to ensure a robust set of retirement and removal provisions that can be used when necessary.
A regular review will give charity trustees peace of mind that their charity’s governing documents reflect good governance and best practices. If necessary, the governing documents should be updated to include up-to-date retirement and removal provisions.
We recommend seeking specialist legal guidance from a charity lawyer to help you review your governing documents.
