16 May 2019 by Ted Nicholl
Charity work is an admirable thing, but the rules and guidelines surrounding it need to be understood
Over the past year a number of members have asked why the Institute, and our livery company (the Worshipful Company of Chartered Secretaries and Administrators), do not encourage members to undertake charitable work. When this was mentioned at an Institute Membership Committee there was general surprise that anyone would assume that such charitable endeavours were not approved of-or even being discouraged.
It was, therefore agreed that there was need for clarification of the Institute’s view and regulations regarding members undertaking charitable work.
The Institute strongly believes, and has always believed, in the value of members undertaking charitable works and has never sought to limit members’ charitable activities. However, to protect both our members, and the beneficiaries of their charitable work, it is both necessary and appropriate that certain rules and guidelines should apply.
To ensure that these guidelines are up to date and that the UKRIAT Public Practice Scheme Regulations (“PPSR”) are clear, the Institute’s Membership Committee conducted a detailed review of the appropriate regulations.
After research and much discussion, it was felt that ‘charitable work’ can normally be split into two categories:
Pro-bono - Pro-bono work is usually the term used to denote any work undertaken by a professionally qualified person which in the course of the scope of their normal working life would be expected to carry a charge or fee. But which is, in this instance undertaken without charge. Examples might be legal, accounting or administrative work for a client on a low income;
Charity work – ‘Charity work’, in this case would be the practice of voluntarily helping those in need; work for a charity; acting as school governor, volunteering at a Citizens’ Advice Bureau, or some other similar volunteering.
As the term ‘pro-bono’ implies that the member is undertaking work within his or her usual professional work, the Committee agreed that such work would fall within the scope of the UKRIAT Public Practice Scheme Regulations section C2; which states that “The Scheme encompasses any chartered member (not a graduate) of ICSA who advertises or carries on the business of offering services in governance, risk, compliance, company secretarial, legal (including HR) and accountancy to individual or business clients for financial gain”, but the Committee agreed that there is no requirement for a member undertaking pro-bono work to be a member of the Institute’s Public Practice scheme as there is no ‘financial gain’.
However, the Committee agreed that the member should have indemnity insurance, or, at least, be covered by the client’s insurance, if there were to be any. If there is no such indemnity insurance then the member would be expected to ensure that the client is made aware that the member has no indemnity insurance that would cover the work undertaken on behalf of the client.
This is covered by the UKRIAT Public Practice Scheme Regulations section D “Exemptions”; which states that “If you are working in a voluntary role you are exempted from registering on the Scheme but you should check you have sufficient Professional Indemnity Insurance”.
In the event of a complaint being made against the Institute member, the Institute, and Disciplinary Tribunal, would expect that the member be able to evidence that the client had been advised that the member did not hold indemnity insurance, and was so aware of any potential risk.
For other charity work, such as a school governor or a trustee - Where the member is undertaking a role that would not be regarded as their usual profession, there is no requirement, at all, for the member to be in the practice scheme.
Again this is covered by the UKRIAT Public Practice Scheme Regulations section C2, as above, and that there is no requirement for the member to be a member of the Institute’s Public Practice scheme as there is no ‘financial gain’.
Above common skills - Whilst there is no requirement for the member to hold indemnity insurance, members are reminded that as a person with a professional qualification, such as an ACIS or FCIS, they are expected to have, and also to apply, skills and knowledge greater than that of an unqualified or less experienced person; the proverbial Man on the Clapham Omnibus.
The ICSA’s Policy Officer, Not for Profit, Craig Beeston comments: ”Charity trustees can purchase indemnity insurance arising out of certain situations.
The Charities’ Act 2011 permits trustees to purchase liability insurance out of charity funds without prior permission from the Charity Commission if the trustees decide it is in the best interests of the charity (unless this is expressly forbidden by the charity’s governing document)”.
The message to the many members of the Institute, and Livery Company, who are so inclined is, please do undertake, or carry on undertaking, charitable works.