Co-operatives UK has recently updated its charitable community benefit society model to reflect governance best practice and in response to the increased demand from charitable organisations operating in England & Wales wishing to engage in social investment by raising capital through a community share offer.
Some of the main changes to the model include:
- Including optional provisions to enable a society to issue withdrawable share capital up to the statutory limit, or what is more commonly known as “a community share offer.” Alongside this is an optional provision to pay interest on this share capital within the limits of the FCA’s guidance which mirrors that published by the Charity Commission.
- In recognition that best practice in charity law is continually evolving, the model includes updated references to the Charities Act 2011, particularly by strengthening the powers section in relation to charity investments and borrowing and enabling trustees to be paid for goods and services provided to the charity, provided that a clear and transparent process is followed.
- Strengthening the conflict of interest provisions around the importance of trustees declaring any conflicts of interest and/or loyalties and setting out a process for authorising a conflict of loyalty where these cannot be avoided.
- Making amendments that will improve the practical governance of their society, including:
- Provisions that enable members to appoint a voting representative to act on their behalf at general meetings. Feedback from our member societies has shown that their members are drawn from a broad geographical area and these provisions will enable even the remotest members to participate in the decision making of the society.
- Provisions that enable a society to cleanse its membership register when it has lost contact with a member and providing a transparent process is followed enabling the society to cancel that member’s shares.
Over the coming months, Co-operatives UK will work to update its other community benefit society models in light of the best practice developed through the updates to this model.