The Charity Commission has issued an Official Warning to One Young World over breaches of trust.
One Young World Limited, a youth education charity with international reach, has been issued with an Official Warning by the charity regulator for England and Wales.
The Charity Commission found governance failings and breaches of trust by the charity's trustees, including poor minute taking, a lack of evidence that conflicts of interest have been effectively managed, and unauthorised payments to a connected person employed by the charity's trading subsidiary.
The Official Warning, issued alongside an Action Plan, requires trustees to address these governance and administrative failures.
The Commission intervened in September 2022 following concerns raised in the media about senior staff salaries and bonuses paid at the charity, and potential conflicts of interests, including employment of a person connected to a trustee.
The regulator assessed these matters and found that the salary paid to an employee connected to one of the trustees was unauthorised under the requirements of the charity's governing document.
Separately, the Commission concluded that bonus payments made to the CEO were not covered by an earlier permission to compensate a trustee for their employment and were unauthorised. The regulator accepts that the trustees made these bonus payments in good faith at the time, and the trustees in turn now agree that they should have sought specific authority on this point.
The Charity Commission has engaged with the trustees extensively, providing advice which the charity has already implemented, including the CEO of the charity stepping down as a trustee last year. This will help make it easier to manage any possible conflicts of interest.
The Official Warning sets out the actions the trustees must take to rectify the breaches of trust and help protect the charity from future governance risks.
These include, among other points, ensuring that any payments to connected persons are made lawfully, conflicts of interests are appropriately managed, and additional, unconflicted trustees are recruited.
Tracy Howarth, Assistant Director for Casework at the Charity Commission, recently said:
“Our engagement with One Young World uncovered governance errors that every charity should take care to avoid, especially in relation to executive pay and conflicts of interest.
“We welcome efforts the trustees have made so far in addressing past failings and making improvements to the charity's administration and governance.
“The Official Warning sets out the further improvements we now expect the trustees to make. We will continue to monitor their progress.”
Advice for all charities
Before authorising any trustee payments, charities must ensure they have the correct authorisations from the Commission or relevant provision in their governing documents.
Trustees are also reminded that failing to keep accurate records of their decision-making or steps taken to identify, manage and avoid conflicts of interest, is a breach of the trustees' duty to act with reasonable care and skill, and can amount to misconduct and/or mismanagement.
Having an accurate and full record to justify any decisions made can protect a charity and help the regulator to exonerate trustees from wrongdoing when concerns are raised.
Notes to Editors:
- The Official Warning was issued on 10th January 2024 under section 75A of the Charities Act 2011.
- Information about Official Warnings can be found in an online Q&A: Guidance - Official warnings to charities and trustees: Q and A (publishing.service.gov.uk)
- The Charity Commission is the independent, non-ministerial government department that registers and regulates charities in England and Wales. Its purpose is to ensure charity can thrive and inspire trust so that people can improve lives and strengthen society.
- The regulator has also created a series of ‘5-minute guides' on a range of issues for trustees to refresh their knowledge, this includes guidance on managing finances, conflicts of interest and decision making. More information can be found via this link: 5-minute guides for charity trustees - GOV.UK (www.gov.uk)
- The Charity Commission is not a regulator or controller of executive pay. As part of their decision making, we expect charity trustees to undertake benchmarking exercises to set appropriate salaries for senior positions.
- As with all decisions, we have produced guidance to help trustees reach decisions that are valid, reasonable and in the best interests of their charity.
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