The document provides an overview of shadow trustees and directors, when advising charity leadership becomes undue influence. It defines shadow directors and de facto directors under company law. It notes that shadow and de facto trustees relate primarily to charitable companies but the Charities Act brought new powers for the Charity Commission. The risks include disqualification and personal liability. It discusses a recent case involving Keeping Kids Company to illustrate these issues. The panel then provides perspectives on defining and identifying signs of a CEO acting as a shadow trustee, the importance of appropriate use of power and trustees understanding and fulfilling their role.
Roles & Responsibilities: A Primer (Series: Board of Directors Boot Camp 2020...Financial Poise
Private company owners, including family businesses, ESOPs, and private equity owners, often have different expectations for their boards than is common in publicly traded firms. Besides being much less encumbered by regulatory compliance, many private firms are looking for a completely different kind of engagement from directors. In companies with new boards, leaders and directors often struggle early on to determine the role of the board and how to separate board responsibilities from those of ownership and management. In this webinar, the audience will learn what companies are really looking for (or should be) from their boards, and the many ways that boards contribute to private company success.
To listen to this webinar on-demand, go to: https://www.financialpoise.com/financial-poise-webinars/roles-responsibilities-a-primer-2020/
Whether you are considering forming a board or want to enhance existing governance practices, understanding the role of the board and expectations of directors is an essential ingredient to successful, value-added governance in private companies. Company leaders and board directors often struggle to determine the role of the board and how to separate board responsibilities from those of ownership and management. In this webinar, the audience will learn what companies are really looking for (or should be) from their boards, and the many ways that boards contribute to private company success. We will cover the definition of a board, typical expectations of a director, board oversight vs. management responsibilities, and many other basics of board formation and operation.
Part of the webinar series: Board of Directors Boot Camp 2021.
See more at https://www.financialpoise.com/webinars/
Roles & Responsibilities: A Primer (Series: Board of Directors Boot Camp 2020...Financial Poise
Private company owners, including family businesses, ESOPs, and private equity owners, often have different expectations for their boards than is common in publicly traded firms. Besides being much less encumbered by regulatory compliance, many private firms are looking for a completely different kind of engagement from directors. In companies with new boards, leaders and directors often struggle early on to determine the role of the board and how to separate board responsibilities from those of ownership and management. In this webinar, the audience will learn what companies are really looking for (or should be) from their boards, and the many ways that boards contribute to private company success.
To listen to this webinar on-demand, go to: https://www.financialpoise.com/financial-poise-webinars/roles-responsibilities-a-primer-2020/
Whether you are considering forming a board or want to enhance existing governance practices, understanding the role of the board and expectations of directors is an essential ingredient to successful, value-added governance in private companies. Company leaders and board directors often struggle to determine the role of the board and how to separate board responsibilities from those of ownership and management. In this webinar, the audience will learn what companies are really looking for (or should be) from their boards, and the many ways that boards contribute to private company success. We will cover the definition of a board, typical expectations of a director, board oversight vs. management responsibilities, and many other basics of board formation and operation.
Part of the webinar series: Board of Directors Boot Camp 2021.
See more at https://www.financialpoise.com/webinars/
Whether you are considering forming a board or want to enhance existing governance practices, understanding the role of the board and expectations of directors is an essential ingredient to successful, value-added governance in private companies. Company leaders and board directors often struggle to determine the role of the board and how to separate board responsibilities from those of ownership and management. In this webinar, the audience will learn what companies are really looking for (or should be) from their boards, and the many ways that boards contribute to private company success. We will cover the definition of a board, typical expectations of a director, board oversight vs. management responsibilities, and many other basics of board formation and operation.
Part of the webinar series:
BOARD OF DIRECTORS BOOT CAMP 2022
See more at https://www.financialpoise.com/webinars/
Whether you are considering forming a board or want to enhance existing governance practices, understanding the role of the board and expectations of directors is an essential ingredient to successful, value-added governance in private companies. Company leaders and board directors often struggle to determine the role of the board and how to separate board responsibilities from those of ownership and management. In this webinar, the audience will learn what companies are really looking for (or should be) from their boards, and the many ways that boards contribute to private company success. We will cover the definition of a board, typical expectations of a director, board oversight vs. management responsibilities, and many other basics of board formation and operation.
Part of the webinar series: Board of Directors Boot Camp 2022
See more at https://www.financialpoise.com/webinars/
PSYCHOLOGY TODAY: PE Partners and PE Portfolio Company CEOsLarry Stybel
More than 50% of PE Dominated Boards replace portfolio company CEOs are replaced in two years or less. This article suggest ways PE Partners can improve the odds and reduce time waste.
As the charity sector continues to manage the impact of the pandemic, many charities are facing financial uncertainty. In this context many senior leaders, to ensure their charity’s sustainability, will be considering collaboration and merger. In this webinar, in association with Bates Wells, we aim to answer questions such as: When should a charity in crisis consider merging? What are the alternatives? How can you make the best decision for your organisation? You will also hear about a new online decision-making tool which will help organisations chart the options open to them in a tight financial spot.
The role of the Non-Executive Director can appear to those sitting outside of Boards to be shrouded in secrecy. What is a Non-Executive Director? What do they do? And why be a Non-Executive Director?
Jointly in our roles advising the Boards of a range of organisations, and the Directors who sit on them, we
are often asked what information a new Non-Executive Director should be aware of. Through combining our experience and perspective in providing Board advice, we have attempted to provide a Guide that answers both the ‘obvious’ questions to ask and issues to be aware of, together with the detail and summary of the working mechanics of the Board and the key legislation Non-Executive Directors need to understand.
Presented on Monday 2 November at NCVO/BWB Trustee Conference 2015
Emma Herbert, NCVO; Chinonso Denwigwe, BWB; and Ian Jospeph, Russam GMS & Trustees Unlimited
What every new trustee needs to know
If you would like to find out more about our 2016 Trustee Conference email us at ncvoevents@ncvo.org.uk or call us on 020 750 3153.
The Board Chair + Executive Director Relationship: How to Become a Leading PairBloomerang
The nature of the relationship between the leadership staff and the Board of Directors is the barometer for your nonprofit’s effectiveness to deliver on its mission and raise funds for your mission. The ideal environment in which your nonprofit can thrive will in large part be related to the nature of the relationship between the Board and Leadership staff.
This relationship is one of the most complex, often messy relationships on the planet! Communication skills are hampered by the often-awkward relationship between the board chair and executive director. It can be awkward because the Executive Director is often told they must educate their board on the board’s roles, especially when it comes to fundraising. However, and in fact, the board is in the legal position of “boss” to the Executive Director. In my 30+ years of involvement in the nonprofit world as both a board member and executive director I can attest to boards becoming defensive when being “educated” by their staff.
In this webinar you will learn:
- A model of communication specifically designed for the Board Chair / Executive Director relationship
- A sample set of Communication Guidelines for all internal communications
- Learn why Fiduciary Duties have been translated into Board Roles & Responsibilities and what the Franciscan Friars of the 1400’s had to do with it!
- How to “Call a Learning Circle” for board roles that does not thrust anyone into “educator role.”
Outlining the Risks Inherent in Corporate Responsibility, and Preventative Measures Directors and Officers Can Put Into Practice to Manage and Reduce These Risks
Whether you are considering forming a board or want to enhance existing governance practices, understanding the role of the board and expectations of directors is an essential ingredient to successful, value-added governance in private companies. Company leaders and board directors often struggle to determine the role of the board and how to separate board responsibilities from those of ownership and management. In this webinar, the audience will learn what companies are really looking for (or should be) from their boards, and the many ways that boards contribute to private company success. We will cover the definition of a board, typical expectations of a director, board oversight vs. management responsibilities, and many other basics of board formation and operation.
Part of the webinar series:
BOARD OF DIRECTORS BOOT CAMP 2022
See more at https://www.financialpoise.com/webinars/
Whether you are considering forming a board or want to enhance existing governance practices, understanding the role of the board and expectations of directors is an essential ingredient to successful, value-added governance in private companies. Company leaders and board directors often struggle to determine the role of the board and how to separate board responsibilities from those of ownership and management. In this webinar, the audience will learn what companies are really looking for (or should be) from their boards, and the many ways that boards contribute to private company success. We will cover the definition of a board, typical expectations of a director, board oversight vs. management responsibilities, and many other basics of board formation and operation.
Part of the webinar series: Board of Directors Boot Camp 2022
See more at https://www.financialpoise.com/webinars/
PSYCHOLOGY TODAY: PE Partners and PE Portfolio Company CEOsLarry Stybel
More than 50% of PE Dominated Boards replace portfolio company CEOs are replaced in two years or less. This article suggest ways PE Partners can improve the odds and reduce time waste.
As the charity sector continues to manage the impact of the pandemic, many charities are facing financial uncertainty. In this context many senior leaders, to ensure their charity’s sustainability, will be considering collaboration and merger. In this webinar, in association with Bates Wells, we aim to answer questions such as: When should a charity in crisis consider merging? What are the alternatives? How can you make the best decision for your organisation? You will also hear about a new online decision-making tool which will help organisations chart the options open to them in a tight financial spot.
The role of the Non-Executive Director can appear to those sitting outside of Boards to be shrouded in secrecy. What is a Non-Executive Director? What do they do? And why be a Non-Executive Director?
Jointly in our roles advising the Boards of a range of organisations, and the Directors who sit on them, we
are often asked what information a new Non-Executive Director should be aware of. Through combining our experience and perspective in providing Board advice, we have attempted to provide a Guide that answers both the ‘obvious’ questions to ask and issues to be aware of, together with the detail and summary of the working mechanics of the Board and the key legislation Non-Executive Directors need to understand.
Presented on Monday 2 November at NCVO/BWB Trustee Conference 2015
Emma Herbert, NCVO; Chinonso Denwigwe, BWB; and Ian Jospeph, Russam GMS & Trustees Unlimited
What every new trustee needs to know
If you would like to find out more about our 2016 Trustee Conference email us at ncvoevents@ncvo.org.uk or call us on 020 750 3153.
The Board Chair + Executive Director Relationship: How to Become a Leading PairBloomerang
The nature of the relationship between the leadership staff and the Board of Directors is the barometer for your nonprofit’s effectiveness to deliver on its mission and raise funds for your mission. The ideal environment in which your nonprofit can thrive will in large part be related to the nature of the relationship between the Board and Leadership staff.
This relationship is one of the most complex, often messy relationships on the planet! Communication skills are hampered by the often-awkward relationship between the board chair and executive director. It can be awkward because the Executive Director is often told they must educate their board on the board’s roles, especially when it comes to fundraising. However, and in fact, the board is in the legal position of “boss” to the Executive Director. In my 30+ years of involvement in the nonprofit world as both a board member and executive director I can attest to boards becoming defensive when being “educated” by their staff.
In this webinar you will learn:
- A model of communication specifically designed for the Board Chair / Executive Director relationship
- A sample set of Communication Guidelines for all internal communications
- Learn why Fiduciary Duties have been translated into Board Roles & Responsibilities and what the Franciscan Friars of the 1400’s had to do with it!
- How to “Call a Learning Circle” for board roles that does not thrust anyone into “educator role.”
Outlining the Risks Inherent in Corporate Responsibility, and Preventative Measures Directors and Officers Can Put Into Practice to Manage and Reduce These Risks
Similar to B5: The shadow trustee: When does advising become undue influence? (20)
A panel discussion considering what the future hold for charities and their governance, and how trustees can support their charities to survive and thrive.
Here we share our progress on updating the Charity Governance Code. Hear from the Code steering group about changes that are being made to the Diversity and Integrity principles following its refresh.
The panel will share some of the proposed changes to the Integrity principle, offering a preview of the updates. They will also reflect on findings from engagement and the extended consultation on enhancements to the Diversity principle. This will be an opportunity for the steering group to share their learning, having listened to a range of experiences. It is also an opportunity to discuss best practice which has been identified through the revision work. Finally, the group will offer an update on next steps on the Code's revision.
We’ve put together this video guide to using the governance wheel to carry out a board effectiveness review. It will be most useful for trustees or staff who are undertaking a board review for their own charity and want to know how best to use the governance wheel to support them in this.
Normal working practices have changed dramatically in a very short period. Most staff are still working remotely, and many organisations have made use of the furlough scheme. This has meant organisations are having to manage and support staff remotely; review some existing policies to ensure they are still fit for purpose; and manage with a reduced and rotating staff capacity. In partnership with our Trusted Supplier Croner, in this webinar we will be sharing good practice on managing and supporting staff in this new environment. We will be joined by Vicky Scott, Operations and HR Manager at Hackney CVS who will share the experiences and learnings of Hackney CVS in this new context.
The economic impact of coronavirus means that many voluntary sector organisations will be going through a period of significant change over the coming months. For many of the hardest hit charities, the process of restructuring and making redundancies will sadly be inevitable. In this webinar we help organisations prepare for this context.
Entering a new phase of the Covid-19 pandemic, with the option of returning to your workplace, has legal and practical implications for all charities. Employers need to be clear about what they are required to do to ensure the health and safety of their staff and volunteers. Employers are having to consider questions such as: what reasonable adjustments should employers make for their workforce in returning to a ‘new normal?’ How can we prepare for what lies ahead? In partnership with TrustLaw, in this webinar we aim to answer these questions. We will be joined by Sarah Valentine, Senior Associate at Eversheds Sutherland and Andrew New, Head of Education at St John Ambulance.
Slides from a webinar broadcast on 15 July 2020, sharing what volunteering organisations have learned since the lockdown in March.
Watch the full recording here: https://www.youtube.com/watch?v=HyFbDAtHHQo
Slides of NCVO webinar that took place on 24 June 2020 covering:
the general health and safety obligations to staff and volunteers, the key legal and practical issues employers need to consider and where to go for further support and guidance.
Watch the webinar: https://www.youtube.com/watch?v=RDBvyTIFTIc
Slides of the NCVO webinar that took place in June 2020 covering:
1) the role of the chair and the board in supporting organisations in the next phase
2) challenges and opportunities which the easing of lockdown presents for trustees
3) tips and resources to help boards plan in a period of significant change
Watch the webinar: https://www.youtube.com/watch?v=HaPktkiCRgo
In partnership with Zurich, NCVO is pleased to bring you a webinar discussing the importance of risk assessments and how effective risk assessments can demonstrate that appropriate health and safety measures are being adopted during the COVID 19 pandemic.
More from NCVO - National Council for Voluntary Organisations (20)
ZGB - The Role of Generative AI in Government transformation.pdfSaeed Al Dhaheri
This keynote was presented during the the 7th edition of the UAE Hackathon 2024. It highlights the role of AI and Generative AI in addressing government transformation to achieve zero government bureaucracy
Understanding the Challenges of Street ChildrenSERUDS INDIA
By raising awareness, providing support, advocating for change, and offering assistance to children in need, individuals can play a crucial role in improving the lives of street children and helping them realize their full potential
Donate Us
https://serudsindia.org/how-individuals-can-support-street-children-in-india/
#donatefororphan, #donateforhomelesschildren, #childeducation, #ngochildeducation, #donateforeducation, #donationforchildeducation, #sponsorforpoorchild, #sponsororphanage #sponsororphanchild, #donation, #education, #charity, #educationforchild, #seruds, #kurnool, #joyhome
Jennifer Schaus and Associates hosts a complimentary webinar series on The FAR in 2024. Join the webinars on Wednesdays and Fridays at noon, eastern.
Recordings are on YouTube and the company website.
https://www.youtube.com/@jenniferschaus/videos
Many ways to support street children.pptxSERUDS INDIA
By raising awareness, providing support, advocating for change, and offering assistance to children in need, individuals can play a crucial role in improving the lives of street children and helping them realize their full potential
Donate Us
https://serudsindia.org/how-individuals-can-support-street-children-in-india/
#donatefororphan, #donateforhomelesschildren, #childeducation, #ngochildeducation, #donateforeducation, #donationforchildeducation, #sponsorforpoorchild, #sponsororphanage #sponsororphanchild, #donation, #education, #charity, #educationforchild, #seruds, #kurnool, #joyhome
Russian anarchist and anti-war movement in the third year of full-scale warAntti Rautiainen
Anarchist group ANA Regensburg hosted my online-presentation on 16th of May 2024, in which I discussed tactics of anti-war activism in Russia, and reasons why the anti-war movement has not been able to make an impact to change the course of events yet. Cases of anarchists repressed for anti-war activities are presented, as well as strategies of support for political prisoners, and modest successes in supporting their struggles.
Thumbnail picture is by MediaZona, you may read their report on anti-war arson attacks in Russia here: https://en.zona.media/article/2022/10/13/burn-map
Links:
Autonomous Action
http://Avtonom.org
Anarchist Black Cross Moscow
http://Avtonom.org/abc
Solidarity Zone
https://t.me/solidarity_zone
Memorial
https://memopzk.org/, https://t.me/pzk_memorial
OVD-Info
https://en.ovdinfo.org/antiwar-ovd-info-guide
RosUznik
https://rosuznik.org/
Uznik Online
http://uznikonline.tilda.ws/
Russian Reader
https://therussianreader.com/
ABC Irkutsk
https://abc38.noblogs.org/
Send mail to prisoners from abroad:
http://Prisonmail.online
YouTube: https://youtu.be/c5nSOdU48O8
Spotify: https://podcasters.spotify.com/pod/show/libertarianlifecoach/episodes/Russian-anarchist-and-anti-war-movement-in-the-third-year-of-full-scale-war-e2k8ai4
Jennifer Schaus and Associates hosts a complimentary webinar series on The FAR in 2024. Join the webinars on Wednesdays and Fridays at noon, eastern.
Recordings are on YouTube and the company website.
https://www.youtube.com/@jenniferschaus/videos
This session provides a comprehensive overview of the latest updates to the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (commonly known as the Uniform Guidance) outlined in the 2 CFR 200.
With a focus on the 2024 revisions issued by the Office of Management and Budget (OMB), participants will gain insight into the key changes affecting federal grant recipients. The session will delve into critical regulatory updates, providing attendees with the knowledge and tools necessary to navigate and comply with the evolving landscape of federal grant management.
Learning Objectives:
- Understand the rationale behind the 2024 updates to the Uniform Guidance outlined in 2 CFR 200, and their implications for federal grant recipients.
- Identify the key changes and revisions introduced by the Office of Management and Budget (OMB) in the 2024 edition of 2 CFR 200.
- Gain proficiency in applying the updated regulations to ensure compliance with federal grant requirements and avoid potential audit findings.
- Develop strategies for effectively implementing the new guidelines within the grant management processes of their respective organizations, fostering efficiency and accountability in federal grant administration.
Up the Ratios Bylaws - a Comprehensive Process of Our Organizationuptheratios
Up the Ratios is a non-profit organization dedicated to bridging the gap in STEM education for underprivileged students by providing free, high-quality learning opportunities in robotics and other STEM fields. Our mission is to empower the next generation of innovators, thinkers, and problem-solvers by offering a range of educational programs that foster curiosity, creativity, and critical thinking.
At Up the Ratios, we believe that every student, regardless of their socio-economic background, should have access to the tools and knowledge needed to succeed in today's technology-driven world. To achieve this, we host a variety of free classes, workshops, summer camps, and live lectures tailored to students from underserved communities. Our programs are designed to be engaging and hands-on, allowing students to explore the exciting world of robotics and STEM through practical, real-world applications.
Our free classes cover fundamental concepts in robotics, coding, and engineering, providing students with a strong foundation in these critical areas. Through our interactive workshops, students can dive deeper into specific topics, working on projects that challenge them to apply what they've learned and think creatively. Our summer camps offer an immersive experience where students can collaborate on larger projects, develop their teamwork skills, and gain confidence in their abilities.
In addition to our local programs, Up the Ratios is committed to making a global impact. We take donations of new and gently used robotics parts, which we then distribute to students and educational institutions in other countries. These donations help ensure that young learners worldwide have the resources they need to explore and excel in STEM fields. By supporting education in this way, we aim to nurture a global community of future leaders and innovators.
Our live lectures feature guest speakers from various STEM disciplines, including engineers, scientists, and industry professionals who share their knowledge and experiences with our students. These lectures provide valuable insights into potential career paths and inspire students to pursue their passions in STEM.
Up the Ratios relies on the generosity of donors and volunteers to continue our work. Contributions of time, expertise, and financial support are crucial to sustaining our programs and expanding our reach. Whether you're an individual passionate about education, a professional in the STEM field, or a company looking to give back to the community, there are many ways to get involved and make a difference.
We are proud of the positive impact we've had on the lives of countless students, many of whom have gone on to pursue higher education and careers in STEM. By providing these young minds with the tools and opportunities they need to succeed, we are not only changing their futures but also contributing to the advancement of technology and innovation on a broader scale.
B5: The shadow trustee: When does advising become undue influence?
1. THE SHADOW TRUSTEE: WHEN
DOES ADVISING BECOME
UNDUE INFLUENCE?
DAN FRANCIS - NCVO
STEPHANIE BIDEN - BWB
SRABANI SEN OBE -
FULLCOLOUR
LOUISE THOMSON - ICSA Dinner
sponsors:
Media
partner:
Headline
sponsor:
Lead
sponsor:
Digital
partner:
2. The shadow trustee: when
does advising become
undue influence?
Stephanie Biden
Partner, Bates Wells Braithwaite
3. Terminology - “shadow director” vs. “de facto director”
Shadow directors
Defined in the Companies Act 2006:
“a person in accordance with whose directions or instructions the
directors of the company are accustomed to act. A person is not to be
regarded as a shadow director by reason only that the directors act on
advice given by him in a professional capacity”
De facto directors
People who act like trustees, i.e. who take or authorise action and who
are held out as being trustees.
Historically meant individuals who purported to have been appointed as
trustees but by some defect had not been. However the law has
developed somewhat, moving away from a narrowly technical definition
of de facto directors to a definition relating to individuals ‘holding
themselves out’ as being directors.
4. Companies and other types of charity
The terms shadow and de facto trustees relate to company law regarding
directors.
So…
The shadow and de factor trustee are characters of concern primarily for
charitable companies limited by guarantee.
But…
The Charities (Protection and Social Investment) Act 2016 brought in
new powers for the Charity Commission to disqualify charity trustees and
senior managers of charities.
Therefore…
Senior managers of charitable companies, CIOs and charitable
unincorporated associations and trusts should all understand the nature
of their role and recognise the possible risk.
5. What is the risk?
• Disqualification as a company director (charitable companies)
• Disqualification as a charity trustee (any legal structure)
• Potential personal financial liability (charitable companies, CIOs,
charitable trusts “trustee de son tort”)
6. Why are we talking about this?
Action taken by the Official Receiver
against the former trustees of Keeping
Kids Company and the charity's CEO in
post at the time of its insolvency, Camila
Batmanghelidjh.
The OR is seeking Ms Batmanghelidjh’s
disqualification as a company director
on the basis that she was a de facto
director of Keeping Kids Company.
7. How can senior managers manage?
• Clear scheme of delegation to senior staff and list of matters reserved
to the board.
• Receiving a senior management team report at board meetings.
• Use available guidance such as the Charity Governance Code,
Charity Commission guidance and NCVO resources.
• Section of each trustees’ meeting at which no staff are present.
8. What should trustees manage?
• High level of responsibility and accountability among the individual
members of the trustee board (no sleepy trustees).
• Managing the public face and influence of the charity through the
trustee board, rather than one charismatic leader.
• Trustee authority on payments of a certain size.
• If the trustees want to invite in other expertise/points of view consider
formally appointing a new trustee following a skills audit or create a
working party/subcommittee (if empowered by governing document)
chaired by a trustee and answerable to the board.
9. CEO as Shadow Trustee: What’s the
issue and why is it important?
Srabani Sen OBE, CEO, Full Colour
10. What I’ll cover…
• Perspectives
• Definition
• Issues
• Why it matters
• Conclusions
12. Definitions
“Someone who acts as a director but doesn’t sit on the board”
ICSA, the Governance Institute
“A shadow director is someone who is not appointed as a director but who
gives directions or instructions that the directors of the company are
accustomed to act upon”
ICAEW
“They are someone (director) whose involvement is not publicly known”
Someone quoted in an article whose name I can’t remember…
13. The issues that people talk about
• Transparency
• Accountability
• Checks and balances
• Legal stuff
14. The real issues
• People don’t know what “CEO as
shadow trustee” looks like in
practice
• People don’t consciously consider in
“live” situations
• Power
• Trustees failing to stepping up
Definition
“A shadow director is
someone who is not
appointed as a director
but who gives directions
or instructions that the
directors of the company
are accustomed to act
upon”
ICAEW
15. Markers for what “CEO stepping into ST” can look like
Trustees Chief Exec Other
• Not reading papers
• Taking papers at face value
• Not getting to know org
• Over-reliance/trust in execs
• Presenteeism
• Chairs that don’t know how to
chair
• Fear of asking the “idiot”
question
• Not understanding job of a
trustee
• Domineering CEOs
• Blindspots
• Crafting papers to get preferred
decision
• Inability to write effective board
papers
• Lining up friendly trustees to
achieve preferred decision
• Not understanding job of
trustee
• Collusion between CEO and
Chair
• Insufficient time at meetings for
proper discussions
• Bad agenda planning
• Poor framing of decisions
16. People don’t consider it as a live/real time issue
Lack of:
• Recognising the symptoms
• Time
• Forum in which to raise it
• Confidence
• Anxiety about annoying the CEO
• Belief that it really matters…
17. Appropriate execution of power
• Is it clear who has power and when?
• Formal schedule of delegation
• Knowledge/ information/ expertise – who has it and how is it used
• How do CEOs give up the power that comes with knowledge?
• When is knowledge a cover for “paradigm”?
• How much do trustees need to know to do their job?
• What skills do trustees need – beyond “Lawyer/ accountant”?
• Emotional/ personality dynamics
• Levels of emotional intelligence/ influence
• Emotion as excuse – “it’s all about the kids/ DV survivors/ disabled people”
• Willingness on part of board to exercise power
18. Trustees knowing/ fulfilling role
Not thought about it/ wrong reasons
Right reasons/ poor knowledge of role
Right Reasons/ good knowledge/ insufficient time
Right reasons/ good knowledge/ enough time/ unhappy to challenge
Right reasons/ good knowledge/ enough time/ happy challenge
19. Trustees can force CEOs into shadow trustee role
Trustee Chief Exec Consultant
• Not reading papers
• Taking papers at face value
• Not getting to know org
• Over-reliance/trust in exec team
• Presenteeism
• Chairs that don’t know how to
chair
• Fear of asking the “idiot”
question
• Not understanding job of a
trustee
• Domineering CEOs
• Blindspots
• Crafting papers to get
preferred decision
• Inability to write effective
board papers
• Lining up friendly trustees to
achieve preferred decision
• Not understanding job of
trustee
• Collusion between CEO
and Chair
• Insufficient time/ bad
agenda planning
• Poor framing of
decisions
20. Conclusions (Why these issues matter)
• Reputation/ scrutiny/ trust
• Context – we need to up our game in governance as a sector
• How we deliver matters as much as what we deliver –
• We know this at a theoretical level but don’t think about it enough in
practice
• Values…The clue’s in the name “shadow” trustee
23. Shadow directors and group structures
Louise Thomson FCIS, Head of Policy (Not for Profit), ICSA:
The Governance Institute
NCVO, 16 April 2018
24. Charities and subsidiary companies
A charity may set up a non-charitable company to carry out various activities
A wholly owned subsidiary’s member/shareholder will be the parent
organisation. The parent’s undertakings likely to include:
Holding 100% of voting rights at AGMs
Having the majority of voting rights at general meeting
Right to appoint/remove majority of subsidiary board
A contractual agreement between the parent and subsidiary
Power to exercise dominant control over subsidiary due to provisions in the
governing document.
25. Directors duties – Companies Act 2006
S 171 - duty to act within powers
S 172 - duty to promote the success of the company
S 173 - duty to exercise independent judgement
S 174 - duty to exercise reasonable care, skill and diligence
S 175 - duty to avoid conflicts of interest
S 176 - duty not to accept benefits from third parties
S 171 - duty to declare interest in proposed transaction or agreement.
26. Subsidiary arrangements
Overlap in personnel – trustees, directors, staff
Separate identity
Financial independence
Lack of control
Shadow directors
27. Shadow directors and subsidiaries
Defined as:
A person in accordance with whose directions or instructions the directors of a
company are accustomed to act is described as a 'shadow director' and thus
treated as a director for the purposes of certain provisions.
In groups of companies there is often a concern that the parent company may be
regarded as a shadow director of a subsidiary. In this event the parent might find
itself liable for the debts of the subsidiary should it become insolvent and be
liquidated. Shadow directors are, of course, subject to the 'wrongful trading‘.
28. Impact
If found to be acting as a shadow director an individual risks:
a liability to contribute to the company’s assets following the company’s
insolvency
being disqualified from being a director following the company’s insolvency
criminal sanctions for breaches of directors’ duties
personal liability for breaches of directors’ duties.
29. Avoiding claims of shadow director in subsidiaries
Asserting control over all or part of the affairs of a subsidiary or being concerned
in its day-to-day management should be avoided
All or substantially all of the directors of the subsidiary should be persons who
are not employees or officers of the parent
An agreement between the parent and subsidiary providing for the subsidiary to
have autonomy (and perhaps limiting the flow of information from subsidiary to
parent) may be helpful
Individual members of the parent company board should avoid becoming
personally involved in giving directions regarding the management of the
subsidiary.