Governance round-up: May 2020

Corporate insolvency and governance bill 2020

The government has published the corporate insolvency and governance bill 2020. When it becomes law, this will provide organisations with flexibility on holding member meetings and breathing space to continue trading and potentially avoid insolvency due to the financial pressures caused by the coronavirus pandemic.

The law firm Bates Wells have produced an overview of the bill’s contents. We joined Bates Wells for a webinar to explore the implications of these changes and what they mean for charities. Register here to watch the recording.

The bill applies to all companies, including charitable companies and charitable incorporated organisations (CIOs), as well as other not-for-profit legal forms.

Members meetings

Extended period to hold annual general meetings (AGMs): Charities’ governing documents sometimes require them to hold AGMs on specific dates, or within a certain time period since the last AGM. Where this is the case and a charity has postponed its AGMs since 26 March 2020, or would like to postpone an upcoming AGM, this will be permissible provided the AGM is held before the end of September.

Virtual meetings: During the period 26 March–30 September charities which are CIOs and companies will also be able to hold meetings virtually even where their governing document states otherwise. There will be no requirement for a fixed location, votes can be held electronically, and a member does not have the right to attend in person.

These provisions apply retrospectively from 25 March until the end of September, but that can be extended.

This all creates more flexibility for organisations where their governing document is prescriptive on when and how AGMs should be run.

Wrongful trading

The bill also proposes changes to wrongful trading and insolvency rules. The bill is intended to provide room for trustees to continue to trade whilst they explore options for rescue that could help them avoid the organisation entering insolvent liquidation. If your charity faces serious financial difficulty then you can read our guidance on the managing these scenarios and we recommend seeking professional legal or insolvency advice.

Three steps for scenario planning

In the webinar we ran on governing during a pandemic we explored the value in trustees undertaking scenario planning by mapping the external environment, identifying possible scenarios and considering what these mean for your charity and its work.

Participants fed back that they would like some more practical guidance in this area to help their board work though scenarios during this time of change.

We have now reviewed our Knowhow content on this topic and published new guidance containing three key steps and some important questions on scenario planning. The content is designed for anyone running a charity and to help you assess uncertainties in your external environment and consider your choices for the future.

We would value your feedback on this guidance. We would be keen to know:

  • if this tool is useful?
  • if there’s anything missing and how you think we can develop the guidance further?
  • whether you have a practical example of having used scenario planning which you are happy to share? Especially in response to the impact of coronavirus.
  • if you think there are other areas where similar guidance would be useful?

Governance and coronavirus webinars

Board leadership: Supporting your charity though the next phase of the coronavirus pandemic (5 June, 11.00)

As part of our webinar programme, and the latest in our series of governance focused webinars. I will be joined by Ros Oakley, Chief Executive at the Association of Chairs to will explore how trustees can support their charities moving from immediate crisis planning into thinking about how best to respond to the easing of restrictions. Click here to register.

Listen to recent governance webinars

Blogs and articles

Pause for thought – why we must make time to think, even in a crisis

Matt Hyde, chief executive of the Scout Association, has written in Third Sector on how, in a time when everyone in the sector is ‘moving at a phenomenal pace to respond to the coronavirus crisis and keep our organisations afloat’ it is important that leaders allow their organisations and themselves time to pause and think.

Matt argues that only this will allow our sector to ‘find a path to a more generous, cohesive society.’ This is a great read for any trustee thinking about how best to support staff in the next phase of this crisis.

Why focus on racial diversity?

Malcolm John, a trustee of the Association on Chairs and leading campaigning on trustee diversity, has written about the stark reality of board diversity and how with coronavirus this is now more pressing than ever for boards to address.

Lifting the lockdown: the challenges our members face and how we are helping

My colleague Elizabeth Chamberlain has summarised the findings of our member survey on the key issues that charities face as the various lockdown restrictions are gradually lifted. It can provide the basis for a board discussion on how these issues impact on your organisation.

 

Dan Francis is NCVO’s lead governance consultant. For more regular updates follow @mynameisdanfran or @NCVO on Twitter.

 

This entry was posted in Policy, Practical support and tagged , . Bookmark the permalink.

Like this? Read more

Dan Francis Dan is responsible for NCVO’s governance consultancy offer, focusing on governance reviews, board performance and trustee training. He joined NCVO from the National Union of Students (NUS) where, as a long standing consultant, he supported the organisational development of local students’ unions as charities.

Comments are closed.