Police Dependants’ Trust compliance case highlights importance of robust governance – Charity Commission

Written by Matt Ritchie
12/09/2014

The Charity Commission has stressed the importance of trustee bodies making decisions collectively and recognising their ultimate responsibility for charity management and administration, in an operational compliance report on the Police Dependants’ Trust.

A compliance case was opened after the trust submitted a serious incident report with the regulator following media reports in March linking a police investigation into the charity with the trust’s 2010 plans to transfer its investment portfolio to a new financial adviser.

The commission found the charity was making significant progress in implementing the recommendations from an independent governance review in 2011, conducted after a dispute over plans to switch financial adviser led to trustee concerns around governance at the charity.

In a statement, the Police Dependants’ Trust welcomed the report’s publication and said it had worked closely with the regulator throughout the case.

“The trust has made significant progress in implementing changes to our governance arrangements in recent years, as the commission report recognises, but more remains to be done. We want to ensure that all our activities adhere to the very highest standards of behaviour and that we learn lessons from the past,” the trust said.

“In respect of the historical police investigation referred to in the Charity Commission’s report, the trust is pleased to learn that none of its trustees were under investigation, and that the CPS [Crown Prosecution Service] found no evidence of criminality arising from the allegations, so that no charges were brought and the matter was closed in July 2014.”

The regulator said it had been made aware of concerns over the management of the charity’s investments in 2010 while dealing with its proposed merger with the National Police Fund.

Initially the trustees had decided to transfer the portfolio to an adviser with links to members of the trustee body due to their roles in other organisations which used the adviser’s services, but a number of the trustees were uncomfortable with the decision making process.

The trustees resolved their differences and agreed to initiate a tender exercise and the charity’s investment portfolio was eventually transferred to a different provider. But the trustees subsequently launched an independent governance review after acknowledging the process had highlighted poor governance.

The commission’s compliance case looked at minutes from 2010 trustee meetings, the 2010 investment policy and a policy updated to reflect issues that arose in the earlier case, and business plans and risk analysis documents.

Although satisfied significant progress was being made, the regulator was still concerned about the robustness of the charity’s governance, including the lack of a business plan or risk register.

“We emphasised the importance of the trustee body making collective decisions and recognising their ultimate responsibility for the administration and management of the charity,” the commission’s compliance report said. “We also set the charity an action plan, on which they are required to report back to the commission on progress, within a set timeframe.”

The commission said the case highlighted the importance of trustees making good decisions, and pointed to its It’s your decision guidance containing good governance principles which can help trustees protect their charities from risks including reputational damage.

It also highlighted the need to appropriately manage the conflicts of interest that charities' trustees can be exposed to. The commission said following its ‘identify, prevent, record’ approach can help trustees avoid having decisions overturned, reputational risk, and having to repay the charity due to unauthorised trustee payments.

“Conflicts of interest are common in charities - having a conflict of interest doesn’t mean a trustee has done something wrong. But trustees need to act to prevent them from interfering with their ability to make a decision only in the best interests of the charity.”



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