The Charity Commission has opened a consultation to gauge the sector’s opinions on its new power to disqualify trustees.

The new powers are set to come into effect from July, in line with the new Charities Act, and will give the regulator discretionary powers to disqualify individuals for a period of up to 15 years.

The three-month consultation will determine the regulator’s approach in taking its new powers forward – including whether the tests set out in the Charities Act have been adequately met and determining the regulator’s approach on deciding the length of each disqualification.

Sarah Atkinson, director of policy and communications at the Charity Commission, said the new powers are important in helping it to “protect charities and uphold public trust and confidence by preventing individuals who, due to their conduct, are judged unfit to be trustees of a charity”.

“It is a significant new power and it is important that our approach is set out clearly and understood by the sector,” she said. “We hope that charities, professional advisers and other interested parties will respond to our consultation to further inform that approach.”

The regulator said today its consultation welcomes comments from “charities, professional advisers, members of the public, other regulators or public bodies (particularly those that exercise similar powers) and those with an interest in the charity sector on its proposed approach to using these new powers”.

Terms of disqualification

According to the regulator, it will only use its powers to disqualify a trustee if three tests are met, including at least one of the following conditions – whether a trustee has been cautioned for an offense against a charity or administration of a charity; if found by HMRC not to be a ‘fit and proper person’ to be a manager of a body or trust; a trustee or employee of a charity who previously facilitated misconduct or mismanagement; or other misconduct unrelated to a charity, found to be damaging to public trust”.

The second test to determine if an individual can be disqualified, includes whether they are “generally or in relation to a charity” unfit to be a trustee; and thirdly if the order is “desirable in the public interest or in order to protect public trust and confidence in charities”.

The Commission said it will examine individual cases to determine the length of suspension – including the nature of circumstances and nature of rehabilitation.

Mitigating factors

The regulator said it will consider leniency in cases where a genuine attempt has been made to remedy the breach or if minimal damage has been caused to the charity.

The “significant new power” will also be subject to “important safeguards”, it said.

“Before an order is made, there will be a notice period in which the individual will be able to make representations to the commission and in some cases representations by the public.”

The individual will also be able to appeal through a charity tribunal, the regulator said.

The consultation will close on 22 August 2016 at 5:00pm.