Gillian Harkness-McKinlay
- Partner
Gillian Harkness-McKinlay
Insights | Charities & Third Sector
Time to get your charitable house in order
30 June 2021
“Friluftsliv” is the Norwegian word for “fresh air life” – the enjoyment of all things outdoors. I’ve been loving the fresh air socialising forced upon us by Covid – no mad dash around the house clearing away Lego obstacle courses, collecting half-eaten bits of toast and generally making our home look as if it isn’t the scene of a crime. Rather, all I’ve had to do is throw up some twinkly lights in the garden and casually deposit fleecy blankets (Scandi style) on our outdoor chairs and the job is done. But courtesy of lockdown easing, I can no longer legitimately block friends at my front door. It’s time to get my house in order! And as things wind down for summer, it’s a good time for all of us in the third sector to take some time and space to get our ‘house’ in order and reflect on the past year.
Virtual fatigue
We’ve all had to make the fairly radical departure from ‘physical’ meetings to virtual ones. Many of us are probably suffering from some degree of virtual fatigue but there is much to be said for retaining elements of virtual meetings when social distancing is a thing of the past.
AGMs
The Companies Act 2006 dispensed with the requirement for private limited companies to hold AGMs (unless there was a specific requirement to this effect in the company’s articles). Most third sector organisations have, however, retained AGMs – this is, for many, where new directors are elected (with retirals typically being tied to the conclusion of the AGM) and an opportunity to engage with the membership. For charities structured as SCIOs (Scottish charitable incorporated organisations), there is a statutory requirement to hold an AGM.
My experience of virtual AGMs has been surprisingly positive. Many virtual AGMs have seen wider engagement from members and, if conducted properly, can be an interesting exercise in democracy and member engagement. I joined one which had ‘attendees’ into the hundreds and from over 30 countries – considerably more than the 20 or so who typically attend.
The chat function on virtual AGMs has also, generally-speaking, been received positively. It seems to generate more questions (perhaps this is less daunting than raising a hand in a more public forum) and members appear to appreciate the opportunity to have their questions responded to immediately by board members and those on the senior management team.
But holding virtual meetings certainly will not be desirable in all circumstances – there will be members who cannot access the technology or who don’t feel comfortable using it. And the AGM also often initiates social interaction – this can be especially important for charities with members who have limited opportunity for such interaction.
There is also, theoretically, the potential for purely virtual meetings to be challenged. The provisions of the legislation which allowed for AGMs to be held entirely virtually (The Corporate Governance and Insolvency Act 2020) no longer apply – and although OSCR is comfortable with SCIOs amending their constitutions to allow for purely virtual meetings (and the SCIO legislation is broad enough to make this permissible), a charitable company is not in quite the same position. Parliament did not take this opportunity to change company law to definitively state that all companies can hold entirely virtual AGMs and it remains possible that this approach could be challenged regardless of what a company’s articles say.
Board meetings
In recent months, board members have become used to the etiquette of using the ‘raising a hand’ function that comes with online meeting platforms and although we have coped admirably, virtual meetings are (to my mind) no real substitute for in-person discussions. Board meetings are a very different forum from AGMs and there should be the opportunity for full and frank discussion. Having said that, it remains important to retain provision in third sector constitutions which allow for virtual meetings following the key principle of allowing people full participation i.e. to have full access to the discussions and to be able to actively contribute.
Where does that leave us?
Going forward, many charities may find some form of hybrid meeting may be most desirable. For board meetings, the default should (to my mind) be that board members should (as far as possible) attend meetings and participate fully in discussions while retaining the option for virtual participation.
For general meetings of members, I suggest that a physical meeting should take place at which a quorum is present (to put the position beyond challenge) but many charities may also wish to allow for others to participate virtually, to make it as easy as possible for as large a number of members to participate. In short, we can retain the best aspects of virtual meetings.
We can help
If you’re considering changing your charity’s constitution to allow for virtual meetings to take place, please get in touch.
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