Decision

RSPCA Tunbridge Wells and Maidstone Branch case report.

Published 5 July 2018

This decision was withdrawn on 18 January 2022

This report has been archived as it is over 2 years old.

1. About the charity

RSPCA Tunbridge Wells and Maidstone Branch (210635) is a local branch of the national animal welfare charity RSPCA. It was registered with the Commission in 1962 and its activities include rehoming unwanted cats in Kent. The charity’s average annual income is approximately £140,000-150,000.

2. Why the Commission got involved

We opened a case into the charity in June 2017 following a front-page national newspaper article which criticised the amount of money spent on a cattery in Headcorn run by the charity which also housed the daughter of the chair. Although aspects of the article were later found to be inaccurate, we identified from the reporting a number of regulatory concerns which required further investigation:

• the process undertaken for the purchase of the Headcorn property and the extent of conflict of interest

• whether the cattery manager, who was a trustee of the charity and who is the Chair’s daughter, was a trustee at the time of her appointment

• whether the cattery manager’s appointment would have required the Commission’s consent given the cattery manager’s trusteeship and relationship to the Chair

• whether the charity had a duty to recover unauthorised benefit received by the cattery manager

• whether the trustees properly handled conflicts of interest and properly managed the potential risk to the reputation of the charity from the perception of conflicts of interest

• whether the branch’s governance is adequate for a smaller charity

The charity’s trustees cooperated with the Commission throughout.

3. What we found

3.1 Purchase of the property

After engaging with the branch’s trustees we found evidence, for example through a designated fund in the charity’s accounts, that the branch had a long term aim of acquiring an animal welfare centre. There was also evidence that other properties had been visited and that the existing temporary premises were unsatisfactory. We therefore concluded there was justification for purchasing a property to use as a cattery. Although the branch had a long term aim of acquiring a property, no specific project team or subcommittee was in place. A formal business plan for the project was not presented until after the property had been identified.

3.2 Appointment of the cattery manager and conflicts of interest

The branch’s Chair, who is also the Chair of the national charity, and her daughter were actively involved in searching for a property to use as a cattery as well as identifying the property in Headcorn as suitable and approving the purchase. Although it was known that the centre would require a manager who would be housed at the property, no intention had been expressed that the daughter would be interested in such a position.

The trustees took steps to ensure a fair recruitment process for the post of cattery manager including advertising the vacancy internally and externally in local media. The charity also sought to manage conflicts of interest when the Chair’s daughter made her intention to apply for the role known; the Chair stepped back from any involvement in the recruitment process and the national society established a selection panel consisting of the branch treasurer, the RSPCA regional manager and the branch support specialist.

Whilst the branch’s trustees stated that the cattery manager had resigned from her position as a trustee before being offered the position of cattery manager in November 2011, the charity didn’t produce any written record to this effect. This is required for a resignation to be effective under the RSPCA’s branch rules. There was also no record of a resignation or the appointment in the minutes of the trustees’ meetings or AGM and the cattery manager continued to attend trustee meetings. The annual return submitted to the Commission still listed the individual as a trustee until September 2013.

4. Our conclusions

The Commission concluded that steps were taken to manage the conflict of interest arising from the Chair’s daughter’s application for the role of cattery manager (by appointing a committee through Branch support services of the national body). Nevertheless, the connection through the national body of the panel members selected to the Chair created a real risk to the perception of independence of the recruitment process and therefore jeopardised public confidence in the charity.

Because the cattery manager did not effectively resign from her position as a trustee when she was appointed to the post of cattery manager, the Commission’s consent would have been required to authorise the appointment by an Order under Section 105 of the Charities Act 2011. She therefore received benefits from her position as cattery manager through the payment of a salary and provision of accommodation in breach of branch rules which prohibit remuneration of or other material benefit by a committee member.

However, given that neither the Chair or her daughter were involved in the recruitment process and that a centre manager would be required following the purchase of the Headcorn property and that the cattery manager’s salary and accommodation was commensurate with that of other centre managers, the Commission has concluded that it is likely that the daughter would be entitled to an equitable allowance for the benefit received.

The Commission also identified failures in the charity’s governance and deemed that this should have been of a higher standard given the knowledge and experience of the Chair who is also the Chair of the national society. The minutes of trustee meetings and the AGM provided to the Commission were minimal and did not properly record decisions or appointments made. The annual reports from the period were also inadequate and not of the standard the Commission would expect in the circumstances.

5. The impact of our involvement

The Commission has issued formal regulatory advice under Section 15(2) of the Charities Act 2011 to the charity’s trustees in the form of a strict action plan. This sets out a number of steps which need to be taken to resolve weaknesses in the charity’s management and administration and ensure the trustees meet their legal duties. This includes improving record keeping and adhering to a conflicts of interest policy. The Commission has made clear that if the trustees fail to comply with the action plan then they could be guilty of misconduct and/or mismanagement and that the Commission would likely take further regulatory action. We will be monitoring the charity’s progress in completing the actions.

6. Lessons for other trustees

6.1 Managing conflicts of interest

All charity trustees have a legal duty to act only in the best interests of their charity. They must not put themselves in any position where their personal and professional connections or interest may conflict with their duties as a trustee or could lead to decisions that are not in the best interests of the charity. Such decisions may be invalid or open to challenge as well as damage the charity’s reputation or public trust and confidence in charities generally.

The Commission expects trustees to actively identify and declare any conflicts of interest or loyalty and take steps to prevent the conflict from affecting decision-making. This could be by proceeding with the issue in a different way so that a conflict of interest does not arise or securing the resignation of a trustee affected by a conflict of interest. The Commission also expects the charity to document any conflicts of interest and how the trustees have dealt with them in writing.

More information is available in the Commission’s guidance Conflicts of interest: a guide for charity trustees (CC29).

6.2 Trustee benefit

Charity trustees usually volunteer their services and don’t receive payment for their work. In certain circumstances trustees may be paid for providing a service or for being a trustee. They can only do so when the payment can be justified in the charity’s best interests, trustees have identified and managed any conflicts of interest, and there is explicit authority in place for payment to be made.

If a charity’s governing document doesn’t allow it to pay trustees, it may need to get the Commission’s consent to employ a trustee or pay a trustee for serving as a trustee. Charities also need to get the Commission’s consent to pay or employ someone who is related or otherwise connected to a trustee. If a connected person is to be paid or employed by the charity, the trustee or trustees they are connected to must not be involved in any part of the process.

More information is available in Trustee expenses and payments.

6.3 Making and recording decisions

Making decisions is one of the most important parts of a charity trustee’s role. When making decisions, charity trustees must:

• act within their powers

• act in good faith and only in the interests of the charity

• make sure they are sufficiently informed

• take account of all relevant factors

• ignore any irrelevant factors

• manage conflicts of interest

• make decisions that are within the range of decisions that a reasonable trustee body could make

Trustees also need to ensure that they keep a written record of their decisions. Recording decisions in this way helps to ensure certainty about what was decided, reduces the likelihood that the decision could be successfully challenged, and helps trustees to show that they have acted properly and complied with their duties.

For further information, see It’s your decision: charity trustees and decision making.