Updating our Governance

Proposed changes to Carers UK’s Memorandum and Articles of Association

2

3

Being a trustee of a charity is a rewarding leadership role. With recent developments in charity law and regulation, it is also an increasingly complex one!

All Carers UK trustees are volunteers who are required to become directors of the limited company, and we are ultimately responsible for ensuring that the charity and everyone working for it operates within an increasingly complex legal framework.

We must conform to all the regulations of the Charity Commission and equivalent bodies in Scotland and Northern Ireland to ensure our activities to support carers are charitable. We have responsibilities to Companies House to account for our income and expenditure and ensure we are solvent.

The new Fundraising Regulator has powers to oversee how we raise funds, the Information Commissioner sets high standards for the way we manage the personal data we hold. As an employer we are bound by all the UK employment legislation.

If we get any of this wrong there are serious financial and reputational risks to Carers UK, so at our Board meetings, and the various sub-committees that report into it, much of our time is spent making sure we are on top of all of these areas.

Many of these responsibilities

are outlined in our key governing document known as our Memorandum & Articles of Association (Mem & Arts). These were drafted in 1988 when we became known as Carers UK and have served us well since then.

However, given significant legal changes in all the areas mentioned, the Board decided to undertake a review to ensure the Mem & Arts are fit for purpose so trustees remain clear about the responsibilities they are taking on and equipped to lead Carers UK.

Over the past six months, we have spent many hours exploring and discussing these documents. I’ve led the review in my role as Chair of the Governance and Constitution Committee, a sub-committee of the Board of Trustees.

This document sets out the changes we’re proposing and asks you, as a member of Carers UK, to support them.

Image: Carers UK Governance & Constitution Committee (L to R)

• BrendaMurray(co-opted2015)• KateGriffiths(CommitteeChair,

CarersUKViceChair,elected2009)• ProfessorDavidGraysonCBE(Carers

UKChairman,co-opted2012)• KevinDaly(inset,CarersNI

CommitteeChair,elected2012)

Why a Governance Review?Kate Griffiths, our Vice Chair, explains what the Governance Review entailed and why it was necessary.

4

July

Mar

The Governance and Constitution Committee started to review the Mem & Arts. A booklet about the Governance Review was included with Caring magazine.

At our AGM members passed a special resolution removing the specified minimum number of trustees, so the Board could continue to function normally during the Governance Review.

Conducting the Governance Review has involved discussions with other membership charities who have conducted similiar reviews for the same reasons, as well as interaction with legal and administrative bodies such as the Charity Commission.

We have now completed the Governance Review. The proposed changes have to be agreed by several key groups. As Carers UK members, you are the most important of these. This document sets out the key changes and asks for your approval.

Our Governance and Constitution Committee members will be on hand to address any questions or concerns from members about the proposed changes. See p15 for details.

We will be holding a General Meeting on 29 June where we will ask members to support the proposed changes. Please vote in person at the General Meeting or by post in advance using the forms enclosed.

Nov

Jun

The process so far

Dec-Feb

Apr-May

2016

2017

5

Carers UK’s Mem & Arts is a long, technical document. Here we’ve provided an at-a-glance guide, along with a more detailed summary setting out what we’re proposing to update and why.

If you wish to read the Mem & Arts in full (both the existing version and the revised version we’re asking members to approve) then they are available online. If you’d like to read them in hard copy, let us know and we’ll send them out to you by post.

Key points Related values and principlesUpdating the way we structure our membership, changing ‘A’ and ‘B’ members to ‘Carer members’ and ‘Supporter members’.

Maintaining the essence of our membership structure, where members with current, recent and past experience of caring have a strong voice.

Changing the way Board members are appointed, introducing a Nominations Committee with responsibility for ensuring the Board has the right skills, diversity and caring experience to govern effectively

Upholding the principle that a majority of Board members must have current or recent caring experience, and for membership to have final approval on all Trustee appointments.

Adding or adjusting articles on topics such as use of income and property, indemnity, conflicts of interest and disqualification of trustees

Setting out trustees’ responsibilities in the light of developments in charity law and practice.

Changing the processes for terminating membership and removing trustees

Maintaining a simple and transparent process which gives a fair hearing and reflects responsibilities under the Companies Act

Introduction of Byelaws Providing a layer of detailed regulations which can be amended by the Board as long as they remain consistent with the Mem & Arts.

Summary of changes

6

1. Updating the way we structure membership

From the beginning, Carers UK membership has been structured to ensure those with experience of caring have a say in the running of the charity, from approving the Annual Report and Accounts to passing special resolutions making constitutional changes.

In the previous version of our Mem & Arts, this was achieved through reference to ‘A’ and ‘B’ members, where ‘A’ denotes members who have been caring within the past three years and ‘B’ denotes members who have not been caring within the past three years.

In the updated version, we are replacing ‘A’ and ‘B’ members with more straightforward descriptions: ‘carer members’ and ‘supporter members’.

We are also leaving in place the article which ensures our ‘inaugural’ members (people who were members when our constitution was formed in May 1988) remain as permanent ‘Carer members’ with a stake in the future direction of the charity.

Values and principlesWe are keeping the underlying principles the same - so every resolution has to be passed by the requisite majority of members, but also specifically by the requisite majority of ‘Carer members’.

Likewise, the Board of Trustees must have a majority of ‘Carer members’ to ensure current experience of caring is reflected at Board level.

7

2. Appointing members to the Board of Trustees

The revised Mem & Arts contains changes to the process of appointing members to the Board of Trustees. This is to ensure the group has the right skills, diversity and experience of caring required to govern Carers UK effectively.

In the previous system, trustees were appointed to the Board in three different ways:

1. Candidates nominated and elected by Carers UK members

2. Candidates nominated by Nation Committees, appointed directly without election

3. Candidates co-opted directly to the Board without election

In such a system, it is very difficult to maintain oversight of the balance of skills, diversity and caring experience of the Board.

There absolutely must be a majority of Board members with lived experience of caring. There must be members from Scotland, Wales and Northern Ireland. The previous system addressed these requirements very well.

To ensure the Board can continue to lead the charity effectively in an increasingly complex environment, the Board must contain members who are experts in functions such as finance, risk, marketing and strategy.

In addition, there must be sufficient diversity on the Board, reflecting the breadth of our membership and

taking steps to remove barriers to inclusion.

Balancing all those requirements is no mean feat. To address this, the Board is forming a Nominations Committee, responsible for maintaing this oversight and seeking and reviewing nominations for new Board members.

The Nominations Committee will help get the Board composition right by considering where the skills, diversity and experience gaps are on the Board and proactively seeking to fill them.

The diagram overleaf illustrates the key changes.

Values and principlesThe updated system preserves these core principles:

• The Board must be a majority of Carers UK members with recent caring experience.

• The Board must include representation from all four nations.

In addition, the updated system strenghtens these core principles:

• There must be sufficient diversity on the Board to reflect the diversity of the carer population.

• All trustees must be approved by Carers UK membership.

8

Several candidates nominated by members and stand for election

Board of Trustees• Must be majority of Carers UK ‘A’ members• Minimum 14 trustees, maximum 21*• Must include at least one trustee from each of Scotland, Wales and

Northern Ireland.• Complicated rules for composition and rotation, including: - Up to a third of the Board can be co-opted - A quarter of the elected trustees must retire each year - All trustees must stand down for a year after eight continuous years in office.

One member of each Nation Committee nominated for Board membership

Co-opted onto the Board, usually on basis of particular area of expertise

Preferred candidates elected by members ahead of AGM

Appointing Board members: Previous system

* The minimum number of trustees was removed by special resolution of members at the AGM in November 2016. This was specifically to enable the Board to function while the Governance Review took place. Based on views expressed by members present at the AGM and considered as part of the Governance Review, the Board is proposing to reinstate a slightly reduced minimum number, at 11 rather than 14.

9

Board of Trustees• Must be majority of Carers UK ‘Carer members’• Minimum 11 trustees, maximum 21• Must include at least one trustee from each of Scotland, Wales and

Northern Ireland.• Simple rules for composition and rotation, including: - All trustees serve a standard period of office of four years, at which point they retire unless re-appointed by Nominations Committee and re-approved by membership. - All trustees to stand down for a year after eight continuous years in office.

Candidates sought from throughout membership and beyond according to the skills, diversity and caring experience required. Includes candidates from Scotland, Wales and Northern Ireland.

Nominations Committee reviews nominations and makes recommendations to the Board, seeking approval on new appointments.

New trustees join the Board pending membership approval

Membership approves appointment of new trustees at AGM

Appointing Board members: Updated system

10

3. Making additions and adjustments to reflect developments in charity law and practice

Values and principlesThese additions reflect the principles that Carers UK must comply with legislation, embody best practice, and ensure trustees are clear from the outset about the responsibilities they are taking on.

Due diligenceThe updated Mem & Arts contains three new articles setting out due diligence in the context of developments in charity law and practice.

The new articles relate to:

• Use of income and property• Indemnity of trustees• Conflicts of interest

Disqualification of TrusteesThe previous Mem & Arts sets out circumstances which would result in trustees vacating their office.

The revised Mem & Arts adds to these circumstances, reflecting the increased complexity of the legal framework surrounding charity governance.

The main addition sets out how trustees can be removed from office by a resolution of 75% of Board members present and voting at a meeting. This might be for breach of duties under relevant legislation or for being absent without permission for three consecutive meetings.

The new Mem & Arts reflects legislative change by setting out how 5% of members may follow procedures to require the Board to

call a general meeting. They may propose at this meeting a resolution to remove a trustee before the end of their period of office.

11

The Mem & Arts provide the definitive framework for Carers UK. They can only be amended by a special resolution of the membership.

The Board of Trustees has established a set of Byelaws which build upon the Mem & Arts in outlining the way Carers UK is constituted and conducts its business. Made and amended by the Board of Trustees, the Byelaws add detail on:

• Keeping a register of members• Composition and selection of Board• Powers and operation of

committees• President, Vice President & Patrons

Values and principlesByelaws cannot override a condition or expression laid down in the Mem & Arts. They can only add detail to that expression. In any conflict, the Mem & Arts prevails.

The principle behind this is simply to enable the Board to maintain a layer of regulation within the parameters set out in the Mem & Arts.

Termination of membershipWhile the core rationale and process for terminating membership remains largely unchanged, the new Mem & Arts specifies that appeals against such terminations are to be made to the Board of Trustees rather than to the AGM. There are two primary reasons for this change.

Firstly, AGM agendas are already packed with the core business of the charity. Hearing membership termination appeals is not an appropriate use of these meetings.

Secondly, Board meetings take place throughout the year. So hearing an appeal at a Board meeting ensures the appeal does not drag on for too long.

4. Changing the process for terminating membership

Values and principlesThankfully it is extremely rare for Carers UK to have cause to terminate a membership. But when termination is necessary, it is important to have a fair and transparent process.

The updated Mem & Arts maintains the core principle that members must have a fair hearing in the termination process. The shift in responsibility for hearing appeals from the AGM to the Board reflects the principle that the AGM is there for discussion of key matters relating to the membership as a whole.

5. Introduction of Byelaws

12

6. Article by article...

Article 1 of the Mem & Arts updates the technical terms and definitions used throughout the document. These include:

• Changing gendered references from male to female, and specifiying that referring to one gender shall include all genders.

• Words importing the singular number only shall include the plural number, and vice versa.

• Words importing persons shall include corporations and unincorporated associations.

• Updating references to legislation, especially The Companies Acts 1985, 1989 and 2006 (to the extent in force) and The Charities Acts 1992, 2006 and 2011 (to the extent in force)

• Adding or updating definitions for key terms such as ‘Bye Laws’, ‘Chair’, ‘Clear Days’, ‘Objects’, ‘Signed’, ‘In writing’, ‘Trustees’, ‘Taxable Trading’ and legislative bodies such as the Charity Commission and the Office of Scottish Charity Regulator.

Articles 2 to 7 set out the objects of the charity. These articles were essentially clauses 1-7 of the previous Memorandum (the ‘Mem’ of Mem & Arts) and are being deleted from the Memorandum and moved in an amended form into the Articles of Association (the ‘Arts’).

Article 8 remains unchanged from the previous version, with no upper limit on the number of members.

Article 9 updates the requirements for Carers UK to maintain a register of members in accordance with company law.

Articles 10-15 updates information about membership as set out above.

Article 16 adds a clause specifying that a member may stop being a member if they fail to respond within 60 days of being sent a notice requesting confirmation that they wish to remain a member.

Article 17 updates information about terminating membership as set out above.

Articles 18-19 update the information about the rights of ‘Carer members’ and ‘Supporter members’, including the proportions required to pass resolutions and special resolutions and ensure sufficient representation on the Board.

Articles 19A-21 add information about use of income and property, indemnity and conflicts of interest as set out above.

13

Articles 22-26 update requirements relating to general meetings, reflecting changes in company law. This includes:

• Removing reference to ‘extraordinary general meetings’ (and deeming these simply ‘general meetings’)

• Removing the requirement to have AGMs no more than 15 months apart (while keeping the requirement to have an AGM every calendar year)

• Reducing the required notice period for general meetings from 21 days to 14 days.

Articles 27-36 update requirements relating to the proceedings of general meetings, reflecting changes in company law. This includes:

• Removing the distinction between ‘special’ business and ‘ordinary’ business• Specifying that persons present by proxy count towards the quorum

(minimum number of attendees) for a meeting• Simplifying the requirements for carrying motions by a show of hands or a

poll, while essentially keeping these provisions identical to the previous Mem & Arts.

Articles 37-45 update requirements relating to the votes of members to reflect the changes outlined above as well as changes in company law.

• Removing the requirement for a person appointed as a proxy to be a member of the charity. Under company law, a proxy does not have to be a member.

• Specifying that the instrument (form) appointing a proxy must be received at the registered office no less than 48 hours, excluding non-working days, before the appointed meeting day (the previous Mem & Arts omitted the ‘non-working days’ requirement).

Articles 46-48 set out the changes made to the Board of Trustees, as explained in detail above.

Articles 49-51 set out the provisions required for the Board to manage the transition process from the old Mem & Arts to the new.

Article 52 removes the requirement for the Board to appoint a Company Secretary, reflecting changes in company law.

Article 53 updates the provisions for disqualification of trustees, as set out above.

Article 54 specifies that 5% of members may require the Board to call a general meeting, as explained above.

Articles 55-64 updates requirements relating to proceedings of the Board, including:

14

• Specifying that the Chair should be appointed for the period from one AGM to the next, but shall be entitled to be re-appointed by the Board

• Clarifying the Board’s ability to appoint or remove honorary posts (with not voting rights) including Presidents and Vice-Presidents.

• Adding provisions relating to the Board’s committees, including the appointment of a chair and technical information about procedural defects.

Article 65 makes a minor simplification of the requirements for email approval of resolutions.

Articles 66-68 remains unchanged in setting out provisions for virtual meetings and appointment of patrons, affiliates, etc.

Article 69 updates requirements relating to the accounts, reflecting changes in company law. This includes:

• Updating technical language• Removing the requirement to ‘lay the accounts’ out in front of members,

while maintaining the requirement to send full accounts via post, email or notification of publication online.

Articles 70-71 make an update to audit provisions, in line with company law, to specify that the accounts shall be examined by qualified auditors if the charity’s income or assets makes this a legal requirement. The previous Mem & Arts made no reference to the legal requirement.

Articles 72-76 contain additional notices and remain largely unchanged.

Articles 77-79 comprise a new section, reflecting changes in company law for written resolutions of members. It sets out how members may pass a valid resolution without a meeting being held.

Article 80 adds a requirement for preparing accounts in accordance with legislation.

Article 81 sets out the information relating to the Bye Laws, as explained above.

Article 82 has been added to reflect the statutory requirements regarding future alterations being made to the Articles of Association..

Article 83 sets out provision for resolution of disputes between members of Carers UK about the validity or propriety of anything done by the members of Carers UK under these Articles.

If you wish to read the Mem & Arts in full, you can download a copy at carersuk.org/governancereview or let us know and we’ll post a copy out to you.

15

As a member of Carers UK, your voice and your vote matters.

That’s the reason why our governing documents specify that changes like the ones we’re proposing can only be passed if a 75% majority of voting members approve them.

As Chairman, I would like to commend these changes to you. They have been proposed with the utmost care not only to ensure that Carers UK can be as effective as possible as a charity in a challenging environment, but also to ensure that we stay true to our core values that place carers at the heart of everything we do.

In making these changes, we’ve consulted with other leading membership charities and sought the right legal advice to make sure we’re fully compliant with legislation.

If you agree with the changes we’re proposing, please use the form enclosed with this booklet to cast your vote and approve the special resolution.

If you feel that we’ve got this all wrong, then you can certainly exercise your right to vote against the proposed resolution.

However, before you do that I’d urge you to make your views known to the Governance and Constitution Committee, so we can discuss them with you. You can write to us, drop us an email (governance@carersuk.org) or even join a session on the Carers UK online forum where we’ll take any questions from members about the Governance Review.

I trust this document has clearly explained how these important changes will serve Carers UK into the future.

Thank you for your support.

Professor David Grayson, CBE

Making the change happenCarers UK Chairman David Grayson explains the process for putting the revised Mem & Arts to members for approval.

Carers UK20 Great Dover Street London SE1 4LX

020 7378 4999 info@carersuk.org

Carers UK is a charity registered in England and Wales (246329) and in Scotland (SC039307) and a company limited by guarantee registered in England and Wales (864097). Registered office 20 Great Dover Street, London SE1 4LX.

Completing the Governance Review

• Use the voting form enclosed with this booklet to cast your vote.

• Visit carersuk.org/governancereview if you wish to download the documents in full.

• We hope you can see the importance of making these revisions. If you have questions or concerns about the Governing documents, do please let us know. You can drop us an email (governance @carersuk.org) or reply in writing.

• Members of the Governance and Constitution Committee will answer questions posted to the online forum about this process.

• We will let members know the outcome of this process following the General Meeting on 29 June.