The Charity Commission issued an Official Warning under section 75A of the Charities Act 2011 to One Young World, a youth education charity with international reach.
On 10th January 2024, the Charity Commission issued an Official Warning to this organisation, which is known for its annual One Young World Summit which features international leaders and celebrities. Concerns about the charity were raised in the media as early as September 2022 in relation to senior staff salaries, bonuses paid at the charity, potential conflicts of interest and the employment of a person connected to a trustee.
After investigating the concerns, the Commission found that the salary paid to the connected employee was unauthorised under the charity’s governing document. It also concluded that bonuses paid to the charity’s CEO were not covered by an earlier permission to compensate a trustee for their employment and were therefore unauthorised. The Commission recognised, however, that the bonus payments had been made in good faith.
The Official Warning
An Official Warning was then issued to the charity due to governance failings and breaches of trust, including poor minute taking, lack of evidence that conflicts of interest were managed effectively, and unauthorised payments to a connected person employed by the charity’s trading subsidiary.
The Charity Commission issued an Action Plan, alongside the Official Warning, requiring the trustees to address the above issues.
The charity has since implemented the advice given by the Charity Commission, including the CEO of the charity stepping down as a trustee last year.
Guidance from the Commission
In its press release about the Official Warning, the Charity Commission advised:
‘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.’
Importantly the Commission explained that it expects charity trustees to undertake benchmarking exercises to set appropriate salaries for senior positions.
To read the full press release, please click here.
For further information, please contact:
Chris Priestley, Partner, Withersworldwide
chris.priestley@withersworldwide.com
