United Kingdom: ME Association governance issues

Jonathan Edwards said:
However, the remaining sections do imply that anything other than expenses and indemnities are 'other' and 'exceptional' and so require CH approval.
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Jonathan Edwards said:
so these payments were not exceptional and did not require approval from CH.
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Just to clarify, approval is required (or not) from the CC (Charities Commission) not CH (Companies House).
 
Peter Trewhitt said:
Thank you @Dx Revision Watch for your very clear and helpful summary.

I have not heard anything back from my enquiry to the MEA but was not necessarily expecting any response now until after the holidays.

So it has always been possible for Trustees to be paid such moneys
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You're welcome. Peter.

Unfortunately, it is such a tangled mess that it is not possible to sum up in a couple of lines.

I doubt you will, but if you were to receive a response from the MEA over the holidays I'd be very interested to see it as it may help inform my questions to Companies House.



These are from the 2007 Articles:

6. Allowed Payments

6.1 The Charity may pay: -

(a) Reasonable and proper payment to any officer or servant of the Charity
who is not a member of its Board of Trustees for any services to the Company;​

(b) Interest on the money lent by any member of the Charity or its Board of
Trustees. The annual rate of interest must not be more than 2% below the
base rate of the charity’s bank or a rate of 3% whichever is the greater;​

(c) Reasonable out-of-pocket expenses to any member of the Board of Trustees;​

(d) Reasonable and proper payment to a company of which a member of the
Board of Trustees holds not more than a hundredth of the capital;​

(e) Reasonable and proper rent of premises demised or let by any
member of the Charity or its Board of Trustees;​

(f) Any premium in respect of any indemnity insurance to cover the
liability of the Board of Trustees which by virtue of any rule of law would otherwise attach to them in respect of any negligence, default, breach of trust or breach of duty of which they may be guilty in relation to the Charity; provided that any such insurance shall not extend to any claim arising from any act or omission which the Board of Trustees knew to be a breach of trust or breach of duty or which was committed by the Board of Trustees in reckless disregard of whether it was a breach of trust or breach of duty or not and provided also that any such insurance shall not extend to the costs of an unsuccessful defence to a criminal prosecution brought against the Board of Trustees in their capacity as Trustees of the Charity ;​

(g) In exceptional cases other payments or benefits but only with the
prior written approval of the Charity Commission.​

PROVIDED THAT no member of the Charity or the Board of Trustees shall be
present during the discussion of or voting on any decision to borrow money from or
pay rent or make a payment or give a benefit to that member.


26. Payment of reasonable expenses to members of the Board of Trustees

26.1 The members of the Board of Trustees may be paid reasonable out-of-pocket
expenses that they have properly incurred in connection with the business of the
Charity but shall not be paid any other remuneration save as permitted in the
Memorandum of Association.

but under the set of articles previously on line and lodged with Companies House and presumably with the Charity Commission this can only be done with the prior written approval of the Charity Commission. However the Chairman is saying this set of articles is an out of date version put out by accident and that under the ‘correct current’ version no such prior written approval was necessary. He says the version now on the MEA site is now the correct version and that the version with the Charity Commission will be replaced.

[sorry went on editing after this was posted, not having realised I had already posted]
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All four versions contain the same clause about exceptional circumstances and approval from the CC: 2007, 2013, 2014 and the document that Riley has now posted on the site which he says is the "correct" 2014 Articles.

[Apologies if the formatting of Articles 2007, article 6 Allowed Payments is a bit screwed up. I'll fix it later.]
 
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I had a quick glance through the AfME Articles of Association at Companies House as an example for comparison, and there seemed to be no mention of any possibility of any trustees being paid for contract services. There was just the usual bit about expenses. And on the AfME website there was a note somewhere saying no trustees are paid by AfME apart from expenses.
I'm too knackered now to find the references.
 
This is the signed cover letter that accompanied the newly adopted 2013 Articles when the document was forwarded to Companies House for registration and filing. It certifies that the resolutions were carried and have been adopted by the membership.

There were a number of resolutions being voted on in November 2013:

1 (Underlined in yellow)
a) To comply with the change in law for the need for a Company to have both a Memorandum and an Articles of Association to only requiring Articles of Association.
b) To comply with changes in the Companies Act 2006 and Charities Act 2011 to the laws on how a company and a charity may operate.
c) Provision by the Companies Act of a new model of Articles for Companies for which the Board proposed to adopt the major part for its new Articles.

d) (Underlined in red) Some additional specific amendments. According to the summary of the November 2013 EGM these were changes to two articles for which the numbers were given as articles 24 and 29.


res-2013.png



This is the signed cover letter that accompanied the newly 2014 Articles when the document was forwarded to Companies House for registration.

There appeared to be no resolutions for specific amendments. The only reason for filing new Articles in 2014 appeared to be in order to adopt the new [model] form of Articles of Association as a substitution for the "existing Memorandum and Articles of Association" (which would have been the 2013 Articles).

But they had already covered adoption of the new model form in the 2013 resolutions.

There is no mention of changing the text of article 28 (which had been changed in the document as was sent to Companies House). The document that Riley says should have been sent is almost identical to the document registered in November 2013 (apart from the change from "2000 Charity Act" in the 2013 Articles to "Trustee Act 2000" for 2014).

So what was the point of filing a new Articles in 2014 if there were no changes to the Company and Charity law that had not already been covered by the previous year's resolution?


2014-res1.png
 
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Jonathan Edwards said:
...I think what should happen is that Riley withdraws from the Board and continues whatever executive role he performs as a voluntary officer.
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He is a Trustee/Director who happens to be the person currently appointed to the role of Chairman. The Board could re-assign the office of Chairman to any of the other Trustees, tomorrow.

I don't think he should be anywhere near the charity, either as a Trustee or a volunteer.
 
Dx Revision Watch said:
He is a Trustee/Director who happens to be the person currently appointed to the role of Chairman. The Board could re-assign the office of Chairman to any of the other Trustees, tomorrow.

I don't think he should be anywhere near the charity, either as a Trustee or a volunteer.
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I don't think so too.

Also, if I understand it right, members have a right to remove a trustee:

How to remove a trustee from the board
You usually need a good reason to remove a trustee, such as if they have done something that damages your charity’s reputation.

Check your charity’s governing document to see if it has a procedure for removing trustees.

If your charity is a company, you have the right to remove a director, providing you follow the correct procedures. You have this right under the Companies Act 2006, regardless of what else is written in your articles of association.
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Charity trustees: resignation and removal - GOV.UK

See also Articles 7 and 25 in the AoA-Nov14
 
Dx Revision Watch said:
He is a Trustee/Director who happens to be the person currently appointed to the role of Chairman. The Board could re-assign the office of Chairman to any of the other Trustees, tomorrow.

I don't think he should be anywhere near the charity, either as a Trustee or a volunteer.
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And they need to appoint a Company Secretary. It does not need to be a Trustee.
 
Dx Revision Watch said:
These are from the 2007 Articles:

6. Allowed Payments

6.1 The Charity may pay: -

(a) Reasonable and proper payment to any officer or servant of the Charity
who is not a member of its Board of Trustees for any services to the Company;
(b) Interest on the money lent by any member of the Charity or its Board of
Trustees. The annual rate of interest must not be more than 2% below the
base rate of the charity’s bank or a rate of 3% whichever is the greater;
(c) Reasonable out-of-pocket expenses to any member of the Board of Trustees;
(d) Reasonable and proper payment to a company of which a member of the
Board of Trustees holds not more than a hundredth of the capital;
(e) Reasonable and proper rent of premises demised or let by any
member of the Charity or its Board of Trustees;
(f) Any premium in respect of any indemnity insurance to cover the
liability of the Board of Trustees which by virtue of any rule of law would otherwise attach to them in respect of any negligence, default, breach of trust or breach of duty of which they may be guilty in relation to the Charity; provided that any such insurance shall not extend to any claim arising from any act or omission which the Board of Trustees knew to be a breach of trust or breach of duty or which was committed by the Board of Trustees in reckless disregard of whether it was a breach of trust or breach of duty or not and provided also that any such insurance shall not extend to the costs of an unsuccessful defence to a criminal prosecution brought against the Board of Trustees in their capacity as Trustees of the Charity ;
(g) In exceptional cases other payments or benefits but only with the
prior written approval of the Charity Commission.
PROVIDED THAT no member of the Charity or the Board of Trustees shall be
present during the discussion of or voting on any decision to borrow money from or
pay rent or make a payment or give a benefit to that member.


26. Payment of reasonable expenses to members of the Board of Trustees

26.1 The members of the Board of Trustees may be paid reasonable out-of-pocket
expenses that they have properly incurred in connection with the business of the
Charity but shall not be paid any other remuneration save as permitted in the
Memorandum of Association.
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This also demonstrates (unless I'm mistaken - my brain is a tad wonky, but I think I'm right) that Art 28 section (a) from the AoA-Nov 13 (in use Nov 2013-Nov 2014) was an addition, not a continuation of existing situation.

Between 2007 and 2013 there was no situation where companies owned by trustees could be hired for regular, non-exceptional services.
 
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dave30th said:
what document is this??
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I think this refers to the version of the 2014 AoA that was posted on the MEA website for several years until this week it was taken down because it didn't include permission to pay for services. June 2018 might be when the citation of a legal Act was corrected. Presumably it was modified from what was in the 2014 version filed at CH. Nightsong gave us the histories for the three versions.
 
Jonathan Edwards said:
However, there is something a bit odd about this drafting. Why is there a statement that payments 'other' than already mentioned (and the scope of that is not defined I think) must be exceptional if the first section (a) allows pretty much any payment for services? What else would payments be for? Either the implication is that there might be some other exceptional payments that were not for services (?) or that section (a) does not apply to trustees and is not included in what contrasts with 'other'.
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Presumably payments for goods or property would be considered 'other' payments.

It seems to me that the two most likely scenarios are that either section (a) was added to allow payments to trustees for services without requiring CC permission; or section (a) was effectively removed and subsequently forgotten when payments were made to trustees for services.

The removal of section (a) seems more consistent with the public records and the CC model document. However, it's also possible that the board and members decided that it was in the charity's best interests for services to be contracted to trustees without having to ask the CC for permission each time.

I am hoping that the CC will have or acquire the paper trail to establish exactly what happened. Either way, it is clear that mistakes have been made and that Peter White was right to raise concerns. It's also clear that the concerns he raised have been dealt with very badly.

My hope is that the outcome of all this is that the MEA will be better run charity, which better serves the interests of people with ME/CFS.
 
dave30th said:
what document is this??
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Nightsong said:
I can't follow all the twists and turns but perhaps this will help - timestamps from the PDF and DOC metadata for the different versions:
Code: 
Articles-of-Association-05-12-2013.pdf:
CreationDate: Thu Dec 5 11:23:51 2013 GMT
ModDate: Thu Dec 5 11:23:51 2013 GMT

Articles-of-Association-of-ME-Association-11.03.2014.pdf:
CreationDate: Tue Mar 11 09:44:12 2014 GMT
ModDate: Tue Mar 11 11:09:33 2014 GMT

Articles-of-Association-of-Myalgic-Encephalopathy-Association.pdf:
CreationDate: Tue Mar 11 09:44:12 2014 GMT
ModDate: Thu Jun 28 10:05:53 2018 BST

Draft-Articles-of-Association-for-approval-at-EGM-on-19-November-2013.doc:
Create Time/Date: 2013-08-08 07:52:00
Last Saved Time/Date: 2013-08-08 07:52:00
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The document created on 3 March 2014, created at the exact same moment as the one that contained the text of the AoA of November 2014 as posted online (with this path file name) and registered with Companies House in the same month, was modified on 28 June 2018.

This is not only and additional clue that the ME Association considered this text as their active AoA, but the modification falls directly in the period (June to July 2018) when they posted this text as their AoA online in their section on policy documents.

It was removed recently because it was not the "real" AoA, according to the trustees of the ME Association.

(I'm only hazy as to where that document can be found.)
 
dave30th said:
yes, very helpful! To clarify, which document allows for payments to trustees, and which does not??
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I had thought that the one the chairman claims is the ‘real’ articles (see https://meassociation.org.uk/2024/12/mea-statement-regarding-articles-of-association/ ), linked to as the 2014 articles, but with the date 5/12/2013 in the pdf file name, allowed such payments. However I was corrected, see above, and it is not clear that even this one allows such payment.

My head is spinning.
 
Robert 1973 said:
However, it's also possible that the board and members decided that it was in the charity's best interests for services to be contracted to trustees without having to ask the CC for permission each time.
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But did they do that with permission of the Charity Commission?

It would go so against the basic guidance and principles of the Charity Commission as well. And I've seen a lot of procedural sloppyness from the ME Association. Also, updating your complete AoA in a new format/law adherence is a big project. This is pure speculation, but I would not be surprised if in the whole bustle of getting the project done, they forgot/neglected to ask CC permission in 2013 for the two Articles.

Which might explain why it was dropped for its amendment.
 
dave30th said:
what document is this??
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This is the 2014 Articles.

Using Wayback Machine, the MEA did not appear to post a copy on their site straight after the resolutions were adopted. For some time the 2013 Articles remained on the site. There are very few captures for the Policies and Documents pages on Wayback for the period 2014 to 2016. Unclear why, though it may be due to the MEA changing their platform.

Anyhoo, the earliest I could find the 2014 Articles on Wayback is from around March 2019 and they remained on the site until Riley whipped them off in December and replaced them with another document.

Possibly the file for the 2014 Articles was being prepared in 2018 for posting online but I don't know.
 
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