Guidance

Automatic disqualification: guidance for charities

This guidance for charities explains the the automatic disqualification rules.

How the automatic disqualification rules affect charities

Charities should avoid appointing or retaining trustees or senior managers who are disqualified, unless the Charity Commission has given a waiver. Charities should follow this guidance to help make the right decisions.

We’ve also produced separate guidance for individuals about automatic disqualification and how to apply for a waiver.

The automatic disqualification rules

A person is disqualified from acting as a charity trustee or holding a senior management position within a charity, if certain legal disqualification reasons apply to them.

The reasons which lead to disqualification are shown in the disqualifying reasons table (PDF, 533KB, 5 pages)

It is usually an offence for a person to act as a charity trustee whilst they are disqualified.

Your charity:

  • should not appoint a trustee or someone to a senior manager position who is disqualified, unless their disqualification has been waived
  • should have systems in place for identifying trustees or senior managers who become disqualified after they have been appointed

Restricted charity positions that disqualification applies to

The rules mean that trustees and certain senior manager roles within charities are restricted to individuals who are not disqualified.

Trustees

Disqualification as a trustee means that, unless you have a waiver, you cannot act as:

  • a charity trustee - a person responsible for governing a charity and directing how it is managed and run. The charity’s governing document may call them trustees, the board, the management committee, governors, directors, or something else. The Charities Act 2011 defines charity trustees as the people who have ultimate control of a charity, whatever they are called in the charity’s governing document
  • a trustee for a charity - a person or organisation who holds property for a charity such as a holding or custodian trustee
  • an officer of a company (or other corporate body) when it acts as a trustee of a charity (a corporate trustee). An “officer” includes any of the persons having general control and management of the administration of the body which is usually the directors of the corporation.

Relevant senior manager positions

These are Chief Executive (or equivalent) positions and Chief Finance Officer (or equivalent) positions.

It is important to understand how the rules define the senior manager positions that are affected because it is the function (and not the title) of the position that matters.

Your charity will need to check which, if any, posts qualify as senior manager positions.

The senior manager section of the guidance for individuals explains what a senior manager is, for the purposes of the rules.

The automatic disqualification rules do not disqualify people from all involvement with charities. There are other ways in which a disqualified person can be involved with charities, such as through appropriate employment in positions that do not count as ‘senior manager positions’, volunteering, or in advisory roles.

Waivers

A disqualified person can, in most circumstances, apply to the Charity Commission to waive their disqualification. They can do this at any time after they become disqualified.

The right to apply for a waiver is an important acknowledgement that there are circumstances in which waiving a person’s disqualification will be in the best interests of a charity or charities, by allowing them to recruit and retain a well-qualified person who may otherwise be unavailable to them.

If a person applies to the Commission for a waiver so that they can take up or continue a relevant position with your charity, the trustees of your charity will need to say whether or not they support the application – addressing specific matters, described in this guidance.

Read the guidance for individuals for more information.

What your charity needs to do

There are certain steps that the charity can take to make sure you follow the rules.

Recruitment

Check your pre-appointment procedures

Your charity should have systems in place so that, before it appoints a new trustee or relevant senior manager, it can make sure that the person is not disqualified under the automatic disqualification rules. You should check that you are doing this.

It can be done by asking a prospective senior manager/trustee to sign a declaration to confirm that they are not disqualified.

We have produced sample declarations that you can use:

senior charity manager positions: automatic disqualification declaration (ODT, 17.1KB)

charity trustee positions: automatic disqualification declaration (ODT, 17.3KB)

The signed declaration:

  • is available for both prospective trustees and relevant senior managers. Your charity will need to check which, if any, posts qualify as senior manager positions under the rules
  • asks them to confirm that they are not disqualified under the automatic disqualification rules

It is up to your charity to decide when, in its recruitment process, to ask for a declaration from an appointee or candidate about disqualification. It can be done after a preferred candidate has been identified, at the final stage of the recruitment process, and alongside other appropriate pre-appointment checks.

The important point is to get the declaration before a relevant appointment is made, so that the charity does not appoint a disqualified person.

Check your procedures for people in post

Your charity should have systems in place so that it can make sure people who are already in a trustee or senior manager position have not become disqualified in the period since they were appointed.

This can be done by asking them to sign a fresh declaration (at reasonable intervals) to confirm that they are not disqualified so that the signed declarations you periodically ask for:

  • are received from both trustees and any relevant senior managers
  • request confirmation that they are not disqualified under the automatic disqualification rules

It is up to your charity to decide:

  • when to first ask for a declaration from people, who are already in a trustee or relevant senior manager position, that they are not disqualified
  • the intervals at which to ask for declarations from relevant senior managers and trustees

In addition to obtaining signed declarations, your charity should also check any relevant official registers which record the names of people who are disqualified from acting as charity trustees. These are listed at the end of this guide.

Contracts

Your charity should review employment or consultancy contract terms for any relevant senior manager positions, and decide whether it is protected if a person in a relevant post becomes disqualified and has to leave their position. You may need to take specialist legal advice about this.

Although this guide is about the automatic disqualification rules for charities, trustees and charity staff can be disqualified under other legislation. It is important that your charity has systems for regularly checking that that their trustees and staff are eligible to act.

For example, carrying out appropriate Disclosure and Barring Service checks relevant to working or volunteering with children or other vulnerable groups - if the role is eligible.

What trustees must do if they are disqualified

Disqualified serving charity trustees must not continue to act in their position. They should also resign formally from their trustee position so that it is clear that they are no longer part of the trustee body.

The charity will need to check whether any resignation in these circumstances affects the minimum number of trustees that must attend meetings so that decisions can be made properly. (This is called the quorum).

What senior managers must do if they are disqualified

Serving staff in a relevant senior manager position who are disqualified must not continue to act in that position.

The charity may need to take legal advice if a senior manager becomes disqualified- particularly concerning the employment and other rights of the senior manager.

You can refer serving trustees and relevant senior managers at your charity who are disqualified to our detailed guidance for individuals, which includes advice on applying for a waiver.

Charities can use this guidance from the charity Unlock provides details for organisations that have trustees and senior managers on how to deal with criminal records.

What charities need to know about waivers

What a waiver is

A waiver brings a person’s disqualification to an end, either for:

  • a named charity or named charities
  • a class of charities a class of charities (this is a group of charities which share a characteristic). For example, a class of charities can be charities with the same charitable purpose, or charities operating in the same area
  • all charities

(Depending on what the person making the waiver application has requested).

If given, a waiver means that the person can take up trustee and senior manager positions at the charity or charities covered by the waiver.

The only exception to this is where a person applies for a waiver to cover only senior manager positions. If this type of waiver is given, the person cannot act as a trustee of the charity or charities covered by the waiver. To do this they would need to apply for a further waiver.

A person cannot apply for a waiver which only covers trusteeship and not senior management positions.

You can read the guidance for individuals for more information about waivers.

If a disqualified person is in, or applies, to a relevant role at your charity, your trustees can decide to support a waiver application for that person. It is up to charities to decide their approach to waivers, and whether or not to support applications in individual cases.

The Charity Commission cannot grant a waiver where the individual is disqualified by the charity’s governing document. This will depend on how the clause in the governing document is worded and there are some examples below.

The trustees may want to take further advice and consider making a change to the clause where there is doubt.

Governing document Provision Position regarding waiver
Governing document refers to disqualification under s.178 of the Charities Act or just the Charities Act Charity Commission can consider waiver under s.181
Governing document makes no reference to disqualification Charity Commission can consider waiver under s.181
Governing document sets out disqualification reasons (which may or may not include those listed in s.178) S.181 does not apply and the Charity Commission cannot consider a waiver unless the governing document specifically allows for it.
Governing document contains a combined provision which makes some reference to s.178 but also lists reasons Depends on the precise wording – the trustees should take their own legal advice

Will the Charity Commission give a waiver?

It is up to the Commission to decide whether or not to give a waiver, considering each case on its own merits. We only give waivers where:

  • it is in the best interests of the charity or charities for which the disqualified person asks for a waiver; and
  • and is not likely to damage public trust and confidence in a charity or charities

Separate guidance is available explaining how we make decisions about a waiver.

What the Charity Commission needs to know from trustees

If a person applies for a waiver specifically so that they can work in a trustee or senior manager position at your charity, the application process asks the waiver applicant to supply details of the views of your trustees on the following matters:

  • whether a majority of the trustees supports the application
  • details of the recruitment process that led to the applicant’s appointment or proposed appointment – if none, then reasons should be given
  • details of the duties and responsibilities of the trustee or senior manager position that the applicant holds or wants to take up
  • why the trustees consider that the applicant is the best appointment-for example what special skills does the applicant have which are not otherwise available
  • why the applicant cannot act in an advisory capacity rather than act as a trustee or senior manager
  • whether the trustees have assessed, and can manage any risk to the charity and its assets in making or maintaining the appointment. For example, where the disqualification reason is financial difficulty or mismanagement the trustees may wish to support a waiver application, subject to them deciding that the applicant will not be in a Treasurer/Chair/Finance Director position at the charity, and that he or she will not have access to the charity’s bank accounts
  • the trustees’ views on the position and reputation of the charity if the applicant’s appointment is made or maintained
  • if the applicant is an undischarged bankrupt, the trustees’ views on whether the legal limitations on his or her activities could damage the charity. For example, for an unincorporated charity, the statutory limitations on obtaining credit could cause difficulties in the relationship between the charity and its bankers

The applicant will ask the trustees to supply this information so that they can include it with their application when they contact the Commission.

The person who is, or will become disqualified, must apply for the waiver, or an advisor can do so on their behalf. We cannot accept applications from charities on the person’s behalf.

In some cases we may contact your charity to ask for more information.

Checking official registers

Charities can make use of official registers which record the names of people who are disqualified from acting as charity trustees. These include:

The Individual Insolvency Register maintained by the Insolvency Service, which contains details of:

  • bankruptcies that are either current or have ended in the last 3 months
  • current individual voluntary arrangements and fast track voluntary arrangements
  • current bankruptcy restriction orders and undertakings

Searches of the Register can be made on the Insolvency Service website, by visiting your local Official Receiver’s office, or by post or fax.

The register of disqualified directors maintained by Companies House. Searches of the register can be made on the Companies House website.

The register of all persons who have been removed as a charity trustee either by the commission or by an Order of the High Court since 1 February 1993.

Published 17 January 2018
Last updated 1 August 2018 + show all updates
  1. Updated in line with automatic disqualification rules that come into force on the 1 August 2018.
  2. Added sample declarations for senior charity manager and trustee positions. These are available under the 'Preparing for the rule changes' section.
  3. Added a link to the online waiver application form.
  4. First published.