Standing Orders } Delegated Powers |
Officers & Directors
There is a propensity, (as well as common custom and practice), for voluntary organisations/groups to have a practice whereby elected Chairpersons assumed certain rights to make what is known as Chair’s decisions. This practice has tended to emanate from the understanding of this being operated within Local Authorities, but alas is done by statutory bodies with guidelines (Standing Orders), to ensure understanding and safeguards. Such things tend not to be implemented within organisations/groups leaving decisions to be opened to criticism, or worse still, abuse, with potentially serious ramifications.
There is no inherent problem with having such a decision making process and is entirely appropriate so long as proper and good practices are set in place to safeguard this against inappropriate use, misunderstanding, or even abuse.
At the end of the day any decisions made and implemented by individuals, be they Chairperson or other elected officers/employees of an organisation/group are ultimately the legal responsibility and liability of Trustees (Committee) collectively and individually.
Therefore it is no good retrospectively disagreeing, denouncing, or repudiating knowledge or responsibility for a decision made by an Officer, e.g. Chairperson, on the grounds of lack of knowledge when they will, in effect commit you to such decisions and cause you to be equally responsible/liable.
To avoid problems it is good practice to build-in a clear understanding of any delegated powers, either in a formal minute at a full meeting, or in what is known as Standing Orders. This sets-out what decisions can be made by say the Chairperson or an employee, e.g. Director/Chief Officer without first having to first convene a meeting of the full Committee for approval, but in any event will be reported and qualified at the next subsequent meeting held of the committee.
It is helpful in instances of say a sensitive or confidential nature, or where small day-to-day operational decisions need to be made, (especially with time limits), that would be prejudiced if having to wait until the next convened meeting is held, or trying to call an earlier/emergency meeting (with minimum allowed notice), where some committee members might not be able to attend at short notice. Any attempts to do the latter, (unless crucial), is equally open to critisim and allegation of abuse - perceived as being designed to deliberately constrain, or retrict those who might be in attendance to influence decision(s) taken at that meeting.
In some instances, when the Author, (Gordon Owen), has produced Memorandum & Articles of Association for voluntary groups/organisations, Standing Orders have been written within the 'Articles of Association'. Deliberations with Companies House on this subject has led to looking at the advantages and disadvantages of introducing Standing Orders in this way. Once included in the governing instrument, beit a Constitution or Memorandum & Articles of Association, it becomes enshrined, definitive and cannot be changed without first convening a
AGM/APCM or EGM with a Resolution to change.
However, it has the advantage of being enshrined in the governing instrument and prevents anyone trying to change, amend, or interpret without first seeking the approval of not only the Committee, but also the membership as a whole. Careful forethought, however, should be given before introducing in this way to allow scope for the breadth of the inclusion to be flexible enough to enable practical implementation. Hence introducing Standing Orders in a way that has been more widely and democratically approved first.
As an example of this, below is an exact extract of what we have included in such documents for reference and as a guide.
STANDING ORDERS / DELEGATED POWERS - OFFICERS AND DIRECTORS
The Chairperson, (or in his/her absence, Vice-Chairperson) shall exercise the right to make a Chairperson's decision and authorise any expenditure with a ceiling limited agreed by the Committee from time to time, and as delegated also to the Company Secretary and/or Treasurer/Finance Director below and/or over and above the same provided that s/he shall have first liaised and agreed on the matter with another officer of the Committee. A final decision outside of a Committee meeting must be first approved by at least one other Officer/Director of the Organisation/Group. Such decision(s) shall be reported to the next meeting of the Committee, with reasoning and qualification.
The Company Secretary of the Organisation/Group shall be empowered to make all decisions affecting the day to day management of the statutory and company secretarialship. The Company Secretary shall liaise and first obtain the consent and approval of at least one other Officer(s)/Director(s) of the Organisation/Group before making any decisions affecting anything which may have long term implications, or change in any policy, or finance of the Organisation/Group, with a ceiling limit agreed by the Committee from time to time. Such decision(s) shall be reported to the next meeting of the Committee with reasoning and qualification.
The Treasurer/Finance Director shall be empowered to make all decisions affecting the day to day management of the finance and authorise any expenditure with a ceiling limit first agreed by theCommittee from time to time provided that they shall liaise and first obtain the consent and approval of at least one other Officer(s)/Director(s) of the Organisation/Group before making any decisions affecting anything which may have long term implications, or change in any policy, or finance of the Organisation/Group, with a ceiling limit agreed by the Committee from time to time. Such decision(s) shall be reported to the next meeting of the Committee with reasoning and qualification.
It is seriously worth considering the above to ensure good practice and to indemnify individuals from inappropriate, disputed, or abuse decision making outside of a Committee meeting. Consideration should also be given to Insurance, e.g. not only Trustees Liability Insurance, but also Indemnity Insurance. The following are not endorsements, but provide contacts of Insurance Companies known to provide such Insurances for Voluntary Organisations/Groups. Alternatively, [if you already have Insurance Policy(ies)], ask your Insurers about such cover.
Other good reference link:
Please also see our associated eBook by iGO eBooks® entitled: "ABC for Committees | Practice & Procedures | Officers | Elections"
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