19th October 2018
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Charities regulator approves charitable trust reform proposals

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Shetland Charitable Trust has won approval from regulator OSCR for its proposal to slim down from 24 to 15 trustees, seven from the council and eight chosen by a selection panel.

OSCR received 68 objections to the reorganisation but concluded overall that the new scheme would allow what is one of Scotland’s biggest charities to operate more effectively and remove the potential for trustees’ conflicts of interest. It was not up to the regulator to decide whether election or selection of the majority of trustees was the most superior method, OSCR said.

Head of charity services Martin Tyson said: “We have carefully examined the proposal made by the Shetland Charitable Trust as well as the various objections we received.

“As regulator our only consideration must be whether the proposal, if implemented, would enable the charity to be administered more effectively. Having considered the proposal and all the relevant issues, our view is that this requirement is met.

“We have therefore written to the trustees to confirm our approval, reiterate the key points that led to our decision, and set out the next steps to be taken to implement the reorganisation.”

He added that it was now time for trustees to introduce the scheme. No timetable has been imposed, but the regulator said in its letter to trustees that it was strongly recommending that this be done as “soon as possible”.

Charitable trust chairman Drew Ratter said a workshop for trustees on reform would be held on 30th July and a meeting on 13th September to decide whether to adopt the scheme.

OSCR said that the current constitution created “irreconcilable conflicts of interest and resulted in public mistrust of decisions taken on behalf of the trust”. These included the trust selling its interest in Viking Energy Ltd to the SIC, leasing Sullom Voe Oil Terminal to the council, providing buildings in partnership with the council for care in rural areas and leasing other property, including the two isles colleges, to the SIC.

Two trustees – Billy Fox and Cecil Smith – have resigned over the past week after trustees voted to approve £6.3 million in additional funding for the Viking Energy windfarm, with Mr Fox citing conflicts of interest as his main reason for standing down.

In its letter to trustees, written by charities services senior case officer Kenny Mathers, OSCR said the trust had a conflict of interest policy but it was not clear that it had been invoked in all the relevant circumstances.

He said it was not up to OSCR to decide whether election of non-councillor trustees would be better than selection.

“The proposed changes will result in a majority of trustees being independent of Shetland Islands Council. Those trustees will be selected for their suitability and the skills they might bring to the trust. This is clearly an improvement on the current process, where trustees are appointed by virtue of another position held by them.”

Mr Mathers said OSCR had no objection to the re-appointment of former councillors. “By definition, former councillors have ceased to be councillors and … there can be no conflict of [interest] on account of any duty owed to Shetland Islands Council.

“We expect there is not an unlimited supply within any community of individuals with the necessary skills and willingness to devote their time to the running of a large charity. We would have greater concerns about a constitution seeking to impose a blanket restriction on the appointment of former councillors as trustees.”

Addressing the question of the quorum for trust meetings, which at six (at least three of them appointees) objectors said was not sufficient, Mr Mathers said among the 23,500 charities on OSCR’s register that was not untypical for a body with 15 members.

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