Planning for the end of a Trusteeship

During our governance careers, it can be tempting to think only about new governance roles – taking on Trusteeships, moving to be a Chair of a board, or diversifying to become a school governor or Non-Executive Director. However, it is vitally important for effective governance that we think about how we bring governance roles to an end carefully. Without planning for the end, governance is weakened, and the charities that we support can suffer as a result. 

So what tools do we have that can help?

Term Limits

While the Charity Commission does not prescribe a formal time limit on governance roles, it endorses the recommendation added to the Charity Governance Code in 2017 that there should be a nine-year maximum term limit on tenure, unless exceptional circumstances apply. Whilst endorsing this, the Charity Commission stresses that boards should develop their own policies in line with the requirements of their governing document.

Term limits can be immensely valuable in improving board diversity, as Trustees scheduled to leave at regular intervals provides opportunity for recruitment and the addition of varied voices to a board. It also allows for continuity of governance, as Trustees can be replaced gradually rather than through a mass exodus, ensuring that institutional knowledge is maintained and that the board balances new voices with experience of the workings of the charity.

Existing Trustees should look to their Articles of Association for guidance on term limits. If these are set out in this document, consider whether your board is compliant. If there is no guidance, consider whether adding clarity on term limits would strengthen governance. 

Succession Planning

Succession planning is the process of identifying and developing potential future leaders to fill organisation-critical roles. The aim is to be able to fill key roles effectively if a current post holder leaves the organisation, without undue loss of expertise. For a board, these organisation-critical roles include both the Chair and Trustees.

Following the above, if a board is empowered with clear term limits and expected departure dates for individuals in organisation critical roles, the board will be better able to plan succession, as they will know when to expect vacancies. 

Cause4 recommends that a governance diary is populated with start and end dates of all Trustees; appraisal dates for senior team members; and other regular events, including board skills audits; and an annual review of board effectiveness. As part of annual reviews, the Chair should have honest conversations with Trustees about how long they see themselves being on the board, and how long their skills will be needed for the charity and delivery of strategy. It may be the case that a Trustee’s skills are not needed for the full duration of a term (due to short term needs) and they plan to step down early.

With knowledge on expected departure dates of each Trustee in hand, boards can plan for recruitment ahead of time; consider the skills they may need to bring on board in each round; and in the case of the Chair, allow for potential candidates to be identified on the board or recruited in advance for an extended handover period.

Removing Underperforming Trustees

Although we can hope that Trustees only ever leave in positive circumstances, it is often the case that boards find themselves needing to remove a Trustee that is not sufficiently performing their governance duties. 

Making full use of the above tools, including term limits and annual governance reviews, will help when this situation arises. Sometimes, it may be that all is necessary is a conversation about commitment, between the Trustee in question and the Chair. This conversation may spark a renewed dedication to governance, or lead the Trustee to resign. In this case, specific provisions for Trustee resignation should be checked in the governing document.

Otherwise, see if your Articles of Association have a procedure for removing Trustees. For example, this might stipulate that a Vote of No Confidence can be held to force a resignation, or might set out a process of mediation that must be completed.

If your charity is a company, then you have the right to remove a director under the Companies Act 2006 by ordinary resolution. If your charity is not a company, and a Trustee is significantly underperforming, then charities can use the Trustees Act 1925. This requires someone with the power to appoint new Trustees in the Articles to show that the Trustee has refused to act or are unfit to act. This can be subjective as well as reputationally damaging and difficult to prove, so where possible, alternative methods should be pursued.

What is your board’s experience in bringing Trusteeships to an end in a positive way that ensures continuity of governance? Let us know on Twitter at @TrusteeLeaders. 

If you need support with governance reviews or board development, please contact us.