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Many charities have adapted to the Covid-19 crisis by adjusting the way they work, including using technology to communicate virtually. However, there are times when it is necessary to hold charity meetings in person.

When the ‘rule of six’ was introduced on 14 September, there was some confusion about whether or not this extended to charity meetings. 

There are some exceptions to the new law, including groups which are providing voluntary or charitable services. This allows charities to hold trustee or members’ meetings of more than six people where it is necessary for providing charitable services. 

Charities should be reminded that the welfare of its trustees and members must be a key consideration. When meeting in person is deemed to be essential, the latest Government guidance should be followed in order to lower the risk of infection as much as possible.

Holding charity meetings virtually

The Government has now extended the special powers of the Corporate Insolvency and Governance Act 2020, allowing Charitable Companies and Charitable Incorporated Organisations (CIOs) to hold AGMs and other members’ meetings virtually, using phone, video or other electronic means until 30 December 2020. The legislation includes exempt charities that are community benefit or friendly societies. However, it does not apply to trustee or director meetings. 

When a charity makes use of the provision, the decision must be carefully recorded in the minutes.  The charity must also adhere to all other requirements of the meeting, such as ensuring a quorum is present and that eligible members can vote.

For other types of meetings, or for any other type of charity, the trustees will have to refer to their charity’s governing document, to see if it permits them to hold meetings online or by telephone. If it does not the charity may be able to amend their governing document to allow virtual meetings.

Cancelling or postponing a meeting

If the charity decides it must postpone or cancel an AGM, members’ meeting or any other type of meeting, they should follow the rules within the charity’s governing document in detail. Whether your governing documents provide for such a situation or not, trustees should demonstrate good governance by recording the decision made and the reasons for it.

Where accounts cannot be finalised as a result of deciding to cancel a meeting, the charity should contact the Charity Commission for a filing extension.  

However, the Charity Commission has already stated that wherever possible, charities should submit their annual reports and accounts on time. Therefore, many charities with a March year-end will need to decide quickly whether to embrace the virtual meeting technology available in order to hold their AGMs and to approve financial statements and trustees’ reports.

Reviewing trustees’ report and notes ahead of a meeting

In light of the challenges presented by coronavirus, trustees should take extra care to review the wording of their trustees’ report and the notes to the financial statements before they are presented at an AGM. This is particularly important if they were drafted some time ago. The circumstances of a charity may have changed significantly since the accounting year-end.

Accounts are generally prepared on the principle that the reporting entity is a ‘going concern’. This means that the charity trustees have no concerns about the charity’s ability to continue to operate and pay its debts on time for at least 12 months from the date the accounts are approved. 

The charity SORP states “If, at the date of approving the report and accounts, there are uncertainties about the charity’s ability to continue as a going concern, the nature of these uncertainties should be explained.”

When filing accounts and trustees’ annual reports with the Charity Commission, it may be necessary to make specific reference to the impact of Coronavirus on the charity’s operations and finances. Even if the charity’s financial year end reporting date was before any significant impact from the Coronavirus pandemic, a ‘Post Balance Sheet Event’ disclosure note may be required.

In addition, it is the trustees’ responsibility to ensure that the Trustees’ Report accompanying the accounts is an accurate reflection of the charity’s performance. As such, trustees should ensure the narrative is fair and balanced. This will require an honest approach in order to disclose not just the successes of the charity but also the challenges currently faced. 

Even more important to many stakeholders will be the charity’s plans for the future. Therefore, it would be useful for trustees to explain some of their plans to tackle and resolve the challenges posed by the pandemic. This should include short term operational changes that have had to be implemented but also the longer-term strategic direction of the Charity. This can be a clear way to demonstrate good governance of the charity.

For further advice on this matter, please do not hesitate to contact me or your local Thomas Westcott office.