The unprecedented challenges of covid-19 have resulted in many charities considering amending their constitutions to allow for hybrid meetings to be held. "Hybrid" meetings are general meetings at which some members attend the physical meeting in person and other members attend virtually, joining the meeting via electronic means, such as Zoom or Teams. The members attending virtually must be able to fully participate in the meeting, including speaking and voting.
However, it might be that a wider review of the constitution and governance in general is required or at the very least desired. Indeed, that may well also be the case for those charities who are already able to hold hybrid meetings. Good governance requires charities to undertake regular internal and external governance reviews to ensure its governing documents remain relevant and up to date and that the constitution is fit for purpose.
Many charities are incorporated as a company limited by guarantee (which has trustees/directors and members) with the main governing document being its Memorandum and Articles of Association. Trustees have a personal duty to ensure that their charity is acting in accordance with its constitution as any breach can have serious implications for the charity and the trustees. With that in mind, what are the reasons you may wish to update your Memorandum and Articles of Association?
The Companies Act 2006 (the "2006 Act") introduced a number of deregulatory provisions which your charitable company may wish to take advantage of e.g. shorter notice periods for meetings, flexibility on how meetings are held and removing the need to hold an AGM. However, you may need to amend your Articles to take advantage of these provisions.
If your Articles pre-date the 2006 Act, the 2006 Act may override certain aspects of your Articles e.g. written resolution procedure, proxy provisions but it is always preferable for the Articles to reflect the current state of the law rather than out of date provisions that could not be relied upon and terminology that is redundant. Out of date statutory references can cause confusion and uncertainty.
On reviewing your Articles, it may become apparent that your quorum requirements (the minimum number of people needed to hold a meeting) are not actually followed or are not workable in practice. If you have difficulty meeting these requirements either at Board or member meetings, these should be amended to reflect the actual requirements of the charity going forward.
Having regard to changing circumstances and the potential need for social distancing, can you hold hybrid meetings? If you have no explicit right in your Articles, consider updating your Articles to allow meetings by a combination of members being present in person and by e.g. Skype and telephone and video conference calls. In a similar vein, would the administrative cost and burden of having to send papers and communications to members by post be significantly reduced by having the right in your Articles to send by email or displaying on your website?
Do your Articles clearly set out the rules relating to the appointment and removal of members and Directors? Are these still relevant to your charity today? Challenging original assumptions and ideals provides charities with an ideal opportunity to question their roles and responsibilities and shape their future going forward.
Charity Trustee duties require trustees to act in the best interests of the charity. Good practice dictates that conflict of interest provisions should be provided for in the Articles. If your Articles do not currently provide for how actual and potential conflicts of interest should be governed, this should be addressed to ensure good corporate governance and compliance with Trustee duties.
As part of a governance review, trustees should consider whether the objects of the charity (its purpose) are still fit for purpose. Do the objects reflect the purpose of the charity as it operates now as opposed to when it was established? It is also best practice to update any language and terminology that was perhaps once appropriate and has subsequently been superseded. Once you have carried out your review and identified any changes that are required to be made, make sure any amendments are carried out in a way that complies with your current constitution/Articles and charities legislation/OSCR requirements.
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