Cycling UK AGM questions

GideonReade
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Cycling UK AGM questions

Postby GideonReade » 6 Aug 2020, 5:59pm

Hi, not sure this is best place to ask, but here goes...

I received the AGM papers and am a little confused. Or perhaps suspicious, after some experience of another organisation which accepts government funds for sporting purposes, and has a 1930 constitution saying, basically: "The board will do what they see as good for the sport; the members are recipients of whatever policy is decided and will help fund it". Of course, as that board's salaries depend upon government funding, the organisation is totally subservient to government. Not a path I'd wish cycling UK to go down, even at present where gov't policy is nominally cycle friendly.

It is explained that the need for a physical AGM is to be deleted, and the reason is that the law no longer requires it. Hmmm. Well, we live in electronic times, there could be a substitute, but nothing is said. Do the board propose any replacement means of allowing members to approve or limit or direct their actions? How do the board see the organisation now it has morphed from a members' organisation to a charity? Is a charity even allowed to give its members the final say?

Regarding the co-opted trustees - proposed to raise limit from 2 to 3. Does this only happen if there are not 10 elected trustees to be found, or does a third coopted trustee reduce the number of elected posts available (the papers suggest the total number of trustees is fixed at 12)?

Hopefully there will be reassuring answers to these queries? I mean actually reassuring, not soothing words!

PaulaT
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Re: Is this a good place to ask Cycling UK AGM questions?

Postby PaulaT » 6 Aug 2020, 6:53pm

I don't have any specific answers but it should be fairly easy for you to find out what what a charity can and can't do, what say its members have and whether or not a physical AGM is required. You'll probably also discover the punishments the trustees of a charity can be liable to if they don't follow the law.

GideonReade
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Re: Is this a good place to ask Cycling UK AGM questions?

Postby GideonReade » 6 Aug 2020, 7:50pm

Hi Paula, fair point, although TBH I'm not particularly concerned about the law, I'm sure the board & proposals would be compliant. But that's surely a minimal, standardised, base.

Interesting article here https://www.civilsociety.co.uk/voices/d ... ublic.html discussing accountability of charities. It would suggest that accountability to members is not the norm. But then "charity" covers a very wide range of organisations from political lobbying to public schools to shipping blankets to victims of disasters in poor countries. I suppose Cycling UK is primarily a political lobbying organisation?

This NCVO article explains what trustees do, but doesn't say anything about how they are chosen: https://howcharitieswork.com/get-involv ... a-trustee/

At present, 9+/12 of ours are elected by the "members". Perhaps that's the definition of what membership is. Trustees are elected at the AGM, aren't they. But I suspect only by poor explanation, the board are removing the requirement for the AGM as presently constructed, and don't explain what replaces it? I'm really only asking for clarification.

Jdsk
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Re: Is this a good place to ask Cycling UK AGM questions?

Postby Jdsk » 6 Aug 2020, 9:05pm

We recently created a membership organisation, and developed it into a Charitable Incorporated Organisation. With a lot of helpful advice from others and after excellent training sessions run by NCVO we came up with a structure that's now nearly a year old. It has a Board of Trustees like any other CIO and with all of the associated legal responsibilities, and a Council elected by Members. Three Trustees were appointed from the Council and three recruited from outside. We'd like a majority of Lay Trustees, one of whom is Chair, to get the right separation of powers.

It's difficult stuff, even with all of that support and advice and experience we've now gone outside for legal advice three times.

Jonathan

PaulaT
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Re: Is this a good place to ask Cycling UK AGM questions?

Postby PaulaT » 6 Aug 2020, 9:16pm

GideonReade wrote:At present, 9+/12 of ours are elected by the "members". Perhaps that's the definition of what membership is. Trustees are elected at the AGM, aren't they. But I suspect only by poor explanation, the board are removing the requirement for the AGM as presently constructed, and don't explain what replaces it? I'm really only asking for clarification.


To my shame I can't actually remember how the trustees get appointed. Although I've been a member for many decades I've rarely bothered to get involved with that side of things. I expect in lieu of a physical AGM we'll get a postal vote, which may actually turn out to be more democratic as I doubt many members ever physically attend the AGM.

PH
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Re: Is this a good place to ask Cycling UK AGM questions?

Postby PH » 6 Aug 2020, 9:46pm

GideonReade wrote:It is explained that the need for a physical AGM is to be deleted, and the reason is that the law no longer requires it. Hmmm. Well, we live in electronic times, there could be a substitute, but nothing is said.

In effect they're only proposing what is already the reality. We'll all get our voting papers with the magazine and those who wish to will have voted before the meeting. Even with the usual member apathy those votes will still greatly outnumber those of the AGM attendees. Yet still some people with get up and make long speeches in support of or opposing a motion, even though those suffering it can't make any difference to the outcome.
I've been to one, the charity conversion one, a complete waste of time, that even the free buffet didn't compensate for.
There's nothing in the proposal to not have an AGM, I don't think that's even possible.

PH
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Re: Is this a good place to ask Cycling UK AGM questions?

Postby PH » 6 Aug 2020, 9:53pm

Despite what some on here would like you to believe, CTC is a Membership Charity, that's a specific category of charity, with it's own specific regulations.
https://www.gov.uk/government/publicati ... rities-rs7

Jdsk
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Re: Is this a good place to ask Cycling UK AGM questions?

Postby Jdsk » 6 Aug 2020, 10:00pm

Is that up to date?

The Charity Commission lists four types, not including that.
There are four main types of charity structure:
charitable incorporated organisation (CIO)
charitable company (limited by guarantee)
unincorporated association
trust


https://www.gov.uk/guidance/charity-typ ... a18b877f11

Jonathan

GideonReade
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Re: Is this a good place to ask Cycling UK AGM questions?

Postby GideonReade » 6 Aug 2020, 10:12pm

Another interesting document. I wonder what proportion of charities actually are of the blankets to Africa type, (as that's sort of an underlying basis of the documents variously referenced above) and what are dedicated to serving the interests of a specific subgroup (like the CTC as was, public schools, campaigning organizations).

And interesting that the Charity Commission is concerned that "differences of opinion" are best avoided as a waste of charity resources. Dunno where that leaves organisations whose main activity is campaigning for something or other... Surely they're bound to use resources thrashing out policies etc, and quite right too.

A murky swamp to peer into, methinks.

So there would be maybe an Annual General, err, not-Meeting? Vote? Consultation (weak!), Report (weaker still)?

thirdcrank
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Re: Is this a good place to ask Cycling UK AGM questions?

Postby thirdcrank » 6 Aug 2020, 10:13pm

PH

Thanks for that link. I've only read the shorter version but I'm relieved to see it seems to be in line with what I've been trying to say. Obviously, the CC is much more eloquent and detailed than I am.

Our findings show that membership charities receive wide-ranging benefits from their members, and these benefits include:

• enhancing the trustee board's transparency and accountability;
• providing a greater appreciation of the needs of beneficiaries;
• improving a charity's influence within the charity sector, giving weight to an advocacy role;
• providing fundraising opportunities; and
• providing a consistent source of trustees.


The benefits flow from the members to the charity, not vice versa.

PH
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Re: Is this a good place to ask Cycling UK AGM questions?

Postby PH » 6 Aug 2020, 10:29pm

Jdsk wrote:Is that up to date?

The Charity Commission lists four types, not including that.
There are four main types of charity structure:
charitable incorporated organisation (CIO)
charitable company (limited by guarantee)
unincorporated association
trust


https://www.gov.uk/guidance/charity-typ ... a18b877f11

Jonathan

It is quite old so I wouldn't like to guarantee that everything in it was up to date.
CTC is a company, well it may be several, and Cycling UK members are members of that company, if it were to be wound up we all have to pay a quid!

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gaz
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Re: Is this a good place to ask Cycling UK AGM questions?

Postby gaz » 6 Aug 2020, 10:40pm

The job of running the club falls to the Trustees as limited by the law and our articles, there is very little the members can do at a GM to 'direct' them.
Ordinary resolutions from the members at a GM can suggest or recommend a course of action, the Trustees aren't bound by the outcome of the vote.

I did mention that the Trustees are bound by the articles, including article 11.
11. MEMBERSHIP FEES
The Charity may require Members to pay reasonable Membership fees to the Charity. The Membership fee for each class of Member may not be changed without the approval of the Members in general meeting.

The Trustees have to get the approval of the members to change membership rates, IMO that fairly much guarantees a regularish GM in the future.
2020 : To redundancy ... and beyond!

drossall
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Re: Is this a good place to ask Cycling UK AGM questions?

Postby drossall » 6 Aug 2020, 11:22pm

thirdcrank wrote:The benefits flow from the members to the charity, not vice versa.

That's in the nature of a charity. A charity must have charitable purposes and deliver benefit to the public. That's not incompatible with membership, especially if anyone can join, but there tend to be limits on the levels of benefit for members, especially if Gift Aid is involved (I'm not a lawyer; this is me paraphrasing my best understanding). Often, members are a vital part of the resources of the charity and join in order to contribute to the public benefit, as opposed to joining to receive benefits.

Promotion of community participation in sports was added as an acceptable charitable purpose some years back, which of course is what created the opportunity for Cycling UK to be a charity.

AndyK
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Re: Is this a good place to ask Cycling UK AGM questions?

Postby AndyK » 7 Aug 2020, 12:49am

Lots of questions here, hard to know where to start. I'll try and tackle the status of Cycling UK as a charity and company (it's both), then election versus co-option of members, then the AGM.

Cycling UK is a company which is also a charity. The term "membership charity" is not so much a legal definition as a description of the form of "governance structure" that the charity has, as it says in the Charity Commission document PH links to above.

CTC is - and has always been - a company limited by guarantee. Members of the company (CTC/Cycling UK) are the company's guarantors, which means that technically, if the company were ever wound up, each Member would be liable to contribute an amount of up to £1 towards the winding-up costs. Fascinating, eh.

Because Cycling UK is a charity, there is a built-in conflict between the process of electing trustees and the duties of the existing trustees as required by charity law. The existing trustees must ensure that we recruit new trustees who will fill gaps in the skills and experience of the board, who will increase the board's diversity, etc etc. It is our legal duty to do so. Trustees complete a "skills audit" each year and a subcommittee analyses the results to identify where there are gaps in the range of knowledge we ought to have, as well as looking at how to improve the board's diversity (which, frankly, could do with improvement).

Membership charities are also expected to have a board which represents the charity's beneficiaries to some extent. That's not the same as representing the members. Some of the beneficiaries may be members and vice versa, but many are not.

So. Most of the trustees are elected from the membership, by the members. (Until recently all of them were, even though the Articles already say that up to 2 can be co-opted, i.e. chosen by the current board members.) If the members in their wisdom select candidates who do not fulfil those requirements, that puts the board in a very sticky position. The Charity Commission can hold us responsible for not doing our job properly. Saying "We found good candidates but the members voted against them" is not an excuse.

Now, in the past that has led to a conflict between the board and the membership. In an attempt to make sure that the board's range of skills, experience and backgrounds is improved, the board has tried to direct the members towards picking the candidates who meet those requirements. Some members object to such heavy-handedness - though it's quite common in other charities.

This is a built-in conflict in the structure of a membership charity, and again the document that PH refers to goes into great depth about the problems this can cause. If you really want to understand the issues behind this proposal I recommend reading it.

A way to reduce this conflict is to allow the board a little more freedom to co-opt trustees where there are gaps in the board's skills. The vast majority of the board remain elected by the membership, but there's enough space for the trustees to have some discretion and fulfil their legal duty to balance the membership of the board. That way the board doesn't have to try so hard to push the members into voting for specific candidates.

I should point out that I was one of the candidates who were not recommended by the board in the year I was elected. The members chose to elect me anyway. Whether that was wise or not I shall leave as an exercise for the reader. One of my objectives as a trustee has been to try and reduce the conflict that led to this "nudging" that took place in the election. I believe that this small increase in the number of co-opted places will help to resolve the conflicts of interest, without undermining the members' right to elect the controlling proportion of the board. I think allowing up to 3 co-opted trustees is a reasonable balance.

Incidentally (and this really matters to me) the members also have a duty to ensure that the board is well-balanced, and should think about that seriously when voting. As members of the charity you all have a moral duty to help it conform to charity law, like it or not. (Arguably also a legal duty, though I'm given to understand that the case law is unclear on this. I am not a lawyer!)

As for the physical AGM:

Not a requirement of charity law. Since 2006 it hasn't been a requirement under company law either, except for PLCs. Private companies are only required to hold an AGM if it says in their articles that they have to - as it does in ours.

Attendance at the AGM is not big and has not been for some time. We've no intention of removing the AGM entirely but we think it's worth having the flexibility to try other approaches to fulfilling the functions it serves. One option would be to hold it "virtually" instead, i.e. by videoconference.

Ironically, we get to try that option out this year anyway. Government Covid-19 legislation enables companies, for this year only, to hold a virtual AGM even if the company's articles say it should be physical. We'll see how it turns out. If it gets greater involvement than the physical AGMs have been getting, there's an argument for saying it should be repeated - but that can only happen if we change our articles.

Removing the automatic requirement for an annual general meeting doesn't remove the ability to call a General Meeting when required because the members need to vote on something. As a result it's likely to be annual in some form, but not necessarily the traditional one.

As a reminder, our Articles of Association list just three things that must happen at an AGM:
12.10 At the annual general meeting the Members are to:
(a) receive the accounts of the Charity for the previous financial year;
(b) receive a written report on the Charity’s activities;
(c) appoint reporting accountants or auditors for the Charity.


I suggest that it doesn't need a bunch of people to trek across the country just to do that.

Re. PaulaT's note: the trustee elections take place by postal vote, completely unconnected with the AGM.
Last edited by AndyK on 7 Aug 2020, 12:55am, edited 1 time in total.

AndyK
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Re: Is this a good place to ask Cycling UK AGM questions?

Postby AndyK » 7 Aug 2020, 12:51am

drossall wrote:
thirdcrank wrote:The benefits flow from the members to the charity, not vice versa.

That's in the nature of a charity. A charity must have charitable purposes and deliver benefit to the public. That's not incompatible with membership, especially if anyone can join, but there tend to be limits on the levels of benefit for members, especially if Gift Aid is involved (I'm not a lawyer; this is me paraphrasing my best understanding). Often, members are a vital part of the resources of the charity and join in order to contribute to the public benefit, as opposed to joining to receive benefits.

Promotion of community participation in sports was added as an acceptable charitable purpose some years back, which of course is what created the opportunity for Cycling UK to be a charity.

Well put. Like it or not, Cycling UK is a charity and its job is to deliver public benefit.