What happens if your treasurer runs off with the funds, or why your constitution is so important

Your governing document is the formal rules by which your organisation is run. Depending on your type of organisation this may be called the constitution, the memorandum and articles, the deed, or the rules. Whatever you call it, it’s a vital part of your organisation and it will establish the boundaries within which your organisation can operate. It’s so important to keep it up to date and make sure all your trustees are familiar with it. New trustees should get a copy of the governing document when they join the organisation and it should be reviewed by the board on a regular basis.

Find your governing document at the back of that drawer and dust it off. Make it work for you and your organisation.

SCVO offers a Governance MOT service for our members who have an income of less than £500,000. Through this you can access our free legal advice service and get a legal expert to look over your governing document and check that it’s relevant, fit for purpose and offers the flexibility to make organisational changes when needed. Unfortunately many organisations who contact our Information Service find their governing document is so outdated that the organisation has drifted away from what it was set up to do. Many old trusts that were set up in the last century (or even earlier than that!) are full of archaic language, making reference to individuals and institutions that no longer exist. Some don’t give their trustees the power to make changes to meet new challenges and opportunities that have emerged since they were first written. In these cases, organisations may have to apply to OSCR for charity reorganisation. What about those perennial people problems (the bit that I think makes governance interesting)? What if you have a disruptive trustee that is hindering the board’s ability to be effective? What about if you need to call an emergency meeting because the treasurer has run off with the funds? Well, you’ll need to refer to your governing document to see what the correct procedure is. When answering telephone queries about governance, my first question is always: “What does your constitution say?”. The number of people who have no idea, or haven’t even seen a copy of their constitution is depressingly high. So go on, find your governing document at the back of that drawer and dust it off. Make it work for you and your organisation. If you’re a UK-wide organisation, think about the effects of September’s independence referendum and its aftermath. Check whether your constitution says anything about geographical restrictions on your membership, or the scope of your activity. And what if your organisation has come to a natural end? Governance documents that don’t have a dissolution clause mean organisations won’t have the power to wind up. What if you want to borrow money, but you don’t have the power to do this? Don’t wait until your meeting with the bank – check now what you can and can’t do, and futureproof your organisation. Get yourself a governance health check! We’re cleaning house here at SCVO. We know our model constitutions are well used by the sector, but we have had a number of queries and comments about our SCIO constitutions and guidance so we’re working to update our SCIO information (with the help of Stephen Phillips of Burness Paull, one of our legal advice partners). Watch this space for more details and a new and improved SCIO constitution! [info-box penguin='https://cms.scvo.org/wp-content/gallery/info-box-penguins/faq-man_brolly_news.png' penguinposition='left' penguinheight='100' cornerclass='' cornercolour='#ed7002' columns='1' columnwidth='280' fontsize='14' padding='10'] Get help For questions about your governing document or to get a Governance MOT contact our Information Service on 0800 169 0022 or find out more here. Publication | The SCVO Guide to Good Governance is available to buy online. [/info-box]