1. Options for Implementing the Fourth Principle Thea Longley 20 September 2012

2. What will we cover?  Introduction – legal forms  Terminology  Democracy vs board skills – the issue and possible solutions  SE requirements  Bear Traps  Why does membership matter?  Questions as we go

3. Legal forms – boring but important!  Lots of legal forms for membership organisations e.g. Incorporated:  Company limited by guarantee  Industrial and Provident Society  Royal Charter Body  Community Interest Company Unincorporated:  Unincorporated association

4. Special status options  Possible status:  Charity?

5. What is a constitution? Constitution = governing document Company → Articles of Association IPS → Rules Royal Charter → Charter Unincorporated Association → rules/ constitution/byelaws (lots of names) NB: may also be: standing orders, byelaws, regulations etc.

6. Why does the Constitution matter?  Sets out procedures for meetings, appointments etc.  Must be followed or decisions can be challenged

7. Who is the Board? (1) Board Members

8. Who is the Board? (2)  Directors  Management committee  Council etc

9. Who are the members?  Members can be:  Democratic (members in a legal sense) with legal rights to vote at the AGM, elect in whole (or part) the Board and dismiss Trustees (e.g. National Trust); and  Participative (members in a colloquial sense) these can be termed Friends or Supporters (e.g. Tate Gallery).

10. More Terminology  Nominate = put forward someone for election or appointment  Appoint = put into a position  Shadow director = someone who acts as if they are on the board but who hasn’t been appointed to the board  Elect = put into a position by an election  Co-opt = usually someone appointment by the Board to fill a vacancy or as an additional Board Member

11. Democracy and Board Skills – get the balance right  What is the problem?  Appointed vs elected

12. Possible solutions  Appoint to posts – e.g. “Treasurer”, “Regional representatives”  Selection Panel, Appointments Committee, Nominations Committee  Co-option  Terms in office  Automatic retirement and sunset provisions  Staggered retirement to ensure continuity

13. Lots of variations  Do co-opted board members have to be reappointed at the AGM or not?  Selection panel  only those selected put forward for members to elect  all those nominated put forward with flags on those recommended  selection panel appoints?  who appoints selection panel?

14. SE requirements  Open recruitment  Well balanced  1/3 independent  Terms of office 2x4 years

15. Bear Traps  Mutual Trading exemption  Member buy in – consultation is key!

16. Why does membership matter?  Legitimacy (voice)  Sustainability (secure income and a market feedback)  Mission (staying on track through listening to diverse voices of stakeholders)  Practical support (through volunteering)

17. CONTACT Thea Longley Charity and Social Enterprise Co-head of Sports Group Bates Wells & Braithwaite London LLP 2-6 Cannon Street London EC4M 6YH Tel: 020 7551 7777 t.longley@bwbllp.com