ADVANCING LOCAL VOLUNTARY ACTION
Ashton House
1a Gatefield Street
Crewe
Cheshire
CW1 2JP
Tel/Fax 01270 211545
Registered Charity No. 506632
DIFFERENT ROUTES TO SERVICE WITH THE BOARDS OF VOLUNTARY ORGANISATIONS
Members and officers of local authorities come to serve or attend the boards of voluntary organisations from several different routes. It is useful to identify these because this helps to clarify the relationship.
3.1. Local authority nomination of a member
This usually occurs when local authority has a substantial interest in the area of work of the voluntary organisation and might fund some of its activities and/or purchase services. The Governing Instrument of the organisation may stipulate that the local authority is entitled to nominate a member to serve on the board.
3.2. Local authority nomination of an officer
As at 3.1, except for the fact that the officer might be expected to report back to the executive management of the local authority rather than to a committee.
3.3. Local authority nomination of a third party
Some local authorities nominate third parties from a list of people who are considered suitable to serve on the boards of voluntary organisations. In these circumstances the person might not be held directly accountable to the local authority.
3.4. Voluntary organisation invitation to the local authority
Voluntary organisations may invite a local authority to nominate a member or officer to serve on their boards.
3.5. Members' or officers' personal interest in the subject area of a voluntary organisation
Local authority members and officers are often personally interested in the work of a particular voluntary organisation. In some instances they may have served on the board before being elected to or employed by the local authority.
3.6. A single local authority member or officer on the board of a voluntary organisation covering several or many areas
Some major voluntary organisations may invite one or two people with experience of local government to join the main board. The same concerns arise in respect of any business transacted between the voluntary organisation and the particular local authority of which the person is a member or officer. There is also the separate issue of the person being perceived to advise the voluntary organisation about local authorities more widely.
3.7. LGA nominations to the boards of major voluntary organisations
There is an established custom for local authority associations to be invited to nominate a member or officer to serve on the board of voluntary organisations at national level.
3.8. The local authority member or officer as observer
The risks of full membership of the boards of voluntary organisations causes some local authorities to insist that members or officers should act as observers rather than members of boards with the full duties of trustees and directors. In other instances, members and/or officers are invited with the clear expectation that they will act as observers.
Observer Status
The risks of personal liability are sometimes thought to be avoided if the authority member or officer acts as an observer at meetings of voluntary organisations rather than as a full board member. Also the member or officer is not bound by the legal duty to act in the best interests of the voluntary organisation. However, the member and/or officer may inadvertently influence policy and management decisions while not appearing to bear full responsibility for them. There are risks of acting as "shadow directors" and thus being treated as directors in terms of personal liability.
The voluntary organisation might have difficulty in discussing controversial issues in the presence of an observer who may also represent a major purchaser, funder or contractor.
For the purpose of this paper, the term Governing Instrument is used to include a Constitution, Memorandum and Articles of Association or other document which describes the rules and authority of an organisation.
