Lynton and Barnstaple - Operations and Development

True, but...if at least 5 Trustees fail to turn up, then maybe it will show who is willing to sit down and discuss Trust business and who is not.

 

Actually, what Clause 50 says is "...and the secretary at the request of a trustee shall..." {my emphasis} , so IMHO that leaves him/her no option to do otherwise.

 

If that were to happen, and those trustees who are the problem refused to attend, and only the three, were too, would that be in itself reasonable course to then, call an EGM, calling into question the fitness of the chairman , and others to stand ?

 

Sadly some of us know the secretary is the 7th of the 6

 

Are you seriously asking us to believe that you don't see the similarities between shareholders and members? Or are you just doing your usual act of defining everything in very strict legalistic terms more relevant to multinational companies? This is a hobby you know...

 

Let’s be blunt here and this is directed in part at @Lineisclear .

The situation is that a majority of trustees have been acting in a manner which calls into question whether their actions are legal, honest with the membership, proportionate and in the best interests of the charity as defined by charity law, the M and A of the organisation and general good businesslike standards.

When asked to account for their decisions, actions and inactions across an emerging and increasing range of issues their response has been to attack (including physically).

The membership voted for trustees who they hoped would help to uncover what at that stage was a suspected range of issues. This they have done. Many of those issue might be put down to simple capacity or capability issues, the “6” are volunteers too of course. However, the vitriolic response, the blank refusal to call board meetings, and therefore the growing suspicion that board meetings must be happening, but without proper notice to all trustees and without in all probability any minutes, creates further suspicion. What more are they trying to hide?

There is a clear need to have a practical means to hold them to account. Preferably before the trust is permanently damaged. This is extremely difficult to do, and pronouncements about trustee duties are beside the point. There is ample proof that these trustees are NOT acting in the best interests of the trust. Removing them though is very nearly impossible in practical terms. Such protection is fair when it is just one of those periodic differences of opinion between members and trust board. This is not that.

 

True, but charities , their trustees and their members are still governed by charity and company law. There is a huge difference. Shareholders have a stake in the company and its assets. It exists primarily for their benefit. Charities cannot have shareholders because a charity exists for specified public benefit purposes. If it closes when solvent the assets, or the proceeds of their sale, aren't available to the members as they would be for shareholders and must be disposed of to another similar charity. Even though its a hobby size has nothing to do with proper governance. Some still seem to assume that you can have all the tax and fundraising benefits of being an incorporated charity whilst paying lip service to the law and running the organisation like the members' preservation societies many of them started as. That's delusional.

 

Well the law does apply to charities as well, especially the L&B. This is the trap that the current trustees have gotten into. They believe that the usual norms don't apply to them. Whatever you think, the law is the law and what @Lineisclear has said is correct. Of course the members have a stake in it, but they don't own the charity and although they can vote the trustees out, and so of course the trustees need to keep they members "on side", the ultimate authority is the charity commission.

 

Are you talking about the members or the trustees being subject to that delusion?

Everything I have seen here suggests that it is the members who want to see some proper standards of governance put in place, and the trustees that are still trying to run it as a private club.

Not for the first time, I can’t help thinking that while you are right in legal terms, your assessment of the actual situation is being viewed in a mirror that reverses reality.

Tom

 

An interesting point. IMHO the answer is not entirely clear, but I suspect that it would be impractical for a number of reasons.

Clause 4 of the M&AoA states:-

"The trustees may call general meetings and, on the requisition of members
pursuant to the provisions of the Act, shall forthwith, proceed to convene an
extraordinary general meeting for a date not later than eight weeks after receipt of
the requisition. If there are not within the United Kingdom sufficient trustees to call a
general meeting, any trustee or any member of the charity may call a general
meeting."

Unless all the majority Trustees were to be abroad on their holidays, I suspect the last sentence can be ignored So what about the first part which I have highlighted in bold? What is meant by 'the trustees' in this context? I suspect that what is meant is that the Trustees can meet as a Board and pass a decision to call a GM. If that is the case, then if the 'majority' Trustees do not turn up to Board meetings then those meetings will be inquorate, so any minority decision has no effect. So ultimately we come back to the normal EGM process requiring request from at least 5% of the membership.

 

I have never said that the law doesn't apply. I also never mentioned the winding down of a railway or anything about members trying to claim assets.
What I said was that there is a direct correlation regarding shareholder control of a company and member control of a trust/railway entity.

 

The ultimate regulatory authority may be the Charity Commission, but they have made clear that they are reluctant to intervene, especially if they judge it to be a conflict between factions. The article I linked to about the Actors Benevolent Fund illustrates the significance of this, especially where the regulatory issue is tied up with the internal politics.

The implication of this, to me, is that it is essential that charities apply a measure of self-regulation as well, working within the law. That includes dissenting trustees, where they believe in good faith that there is mismanagement, remaining in office and seeking to influence the conduct of the charity - including by publicising the issues to members.

If that avenue is barred, then the effect is to the discredit of public confidence in the charity sector as a whole. It will mean that charities will fail, and that regulatory reviews, typically post mortem, will leave the impression of systemic failings in the sector. As public opinion, influenced by political campaigns, hardens over the definition of “public benefit”, we should be wary of a situation where the public benefit our sector claims is challenged because of an unrepresentative minority.

The current situation in the L&BRT is undoubtedly messy, and needs resolution. But that mess is a consequence of the lack of safety valve in the system, and the refusal of the majority of trustees to respond to reasonable criticism. Members are entitled to be aware of these choices, and to understand them before being asked to cast their votes at annual elections.


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Well I'm pleased we can agree on that because the common feature is that there is only limited scope for either.

 

So despite this "letter" from six of the Trustees being riddled with errors, inconsistencies and libelous statements against their three colleagues (I can see no evidence - and the six produce none - to suggest that Anne, Mike and Chris are attempting to damage the railway - indeed, quite the reverse), we now know that there hasn't been a Trustees' meeting since August when Ian Cowling apparently refused to work with Anne and this seems to have scuppered the meeting.

A few things (mostly unprintable) spring to mind:

- If Ian Cowling doesn't want to work with someone elected by the membership, he should resign immediately. It is not for him to decide who he deigns to work with, it is for the Members.

- The Chairman's role is only to chair the Trustees' meetings, but he or she must do that - simply refusing to meet because your mate refuses to work with someone he doesn't like isn't acceptable, and if that's the way you want to play it, you should resign as well.

- I have not seen any formal delegations of powers in the Trust, so it must be in their absence that the Trustees have to either concur or take formal votes to do things and to spend money. If the Trustees have not met since August, then there can be no authorisation for the mailshot just sent out. I look forward to confirmation from the six who signed this "letter" that they have funded the mailshot themselves, as Anne, Mike and Chris did in dispatching their Minority Reports.

- If the Trustees have not met since August, how are they discharging their fiduciary duties to the Trust? Given the size of the Trust's exposure to LBBC/OSHI (at least £503,000 plus accrued interest, despite the misleading nonsense in the "letter"), this should include monthly management accounts from the pub.

- None of this answers the questions about the:

• Amount of money the Trust has available for the extension - it certainly isn't the £700k the "letter" seeks to suggest it is
  
• Legality of the Trust's unsecured loan to LBBC as it has a lower interest rate than the fully secured loan from a CIC Director.
• Rumours that the vendors are not paying market price rent for two years to 2025.

Everyone should be concerned with the answers to these questions (and the 60+ questions submitted to the Board before the Meeting by those who couldn't go which remain unanswered) because they go to the heart of the Trust's ability to reinstate the railway.

Toby

 

That may well be so BUT without taking the wishes of your members into account then not only will your membership start to shrink therefore causing loss of membership dues but donations/legacies ect will also start to dry up and without funds you're basically bugg...d

 

Yes a good point but would in not be yet another nail in his coffin if even he refused to turn up, I get the impression from all of this that some of them don't want the membership involved with this project full stop.

May be that is the view from the six (or the Seven) and they will issues removal notices to every member.

On Page 5 it states they plan to overhaul the Articles of Association;-

https://www.gov.uk/government/publi...e-companies-limited-by-guarantee#reservepower

However for Mr lineisclear the L&BR has this to say


7. Every member of the Charity undertakes to contribute such amount as may
be required (not exceeding £10) to the Charity's assets if it should be wound up
while he or she is a member or within one year after he or she ceases to be a
member, for payment of the Charity's debts and liabilities contracted before he
or she ceases to be a member, and of the costs, charges and expenses of
winding up, and for the adjustment of the rights of the contributories among
themselves.

My understanding is that this is paid in advance when we joined, so techincally we do own the Trust it was stated at an AGM (I can not recall which one) that should the trust fail then the membership will have already paid their £10 in to the pot and no more will be asked of them.

My point is that the trust is also a company and what a trust can and can't do is also up to Company law isn't it?

 

The L&B is like many other heritage railways both a company limited by guarantee and a charity. It is a common structure for charities of all kinds in fact.

A company limited by guarantee is controlled by its members who cannot normally benefit financially from the company and are liable for upto a specified amount in the event of a winding up.

A charity is a nonprofit organisation which uses its assets for a specified objective of benefit to the community at large. Charities are governed by trustees.

So, trustees of a charity which is also a company limited by guarantee must:

- use its resources to further its charitable aims

- operate in accordance with the wishes of the members

- obey both charity and company law

- take into account guidance from statutory authorities

Now on occasion trustees may find that there is some conflict between these duties. Guidance is there to assist them, and sometimes that might mean that they might need to explain to members why something cannot be achieved. It is possible that charitable objects might need revision to better align members wishes. The law MIGHT require that members wishes are not undertaken, or have to be significantly modified. But, without question, members have an important role.

It isn’t simply that a board of trustees is foolish to ignore the members. It must not do so. The objects must be approved by both the members and the charity commission. The members appoint the trustees. It is quite clear to me that the role of members is to control the organisation. They cannot compel the trustees to act illegally or in anything other than the best interests of the organisation in meeting its objectives, but within the legal framework, they set the objectives.

in practice members approve (or not) what trustees place before them. A practical demonstration of the power of being to set the agenda.

So I think that it is wrong to say that the trustees are not responsible for carrying out the wishes of the members. They are responsible for doing just that, providing that those wishes do not conflict with the charitable objectives, what is best for the organisation in the judgment of the trustees and what is lawful. Ideally it would all be carried out in a manner which was compliant with CC guidance on best practice.

IF the wishes of the membership were to conflict with the objectives this might mean a change in objectives was needed, but this ought to be investigated before straight refusal by the trustees. The law is the law of course. Guidance is generally about how not what.

I feel that if more trustees (in various places) were to properly recognise the complex and delicate nature of their responsibilities and how they interlock, we would all be better off.

 

Thank you 21B for an excellent assessment.
Perhaps it's worth clarifying that although a 75% voting majority of members can vote to change the charitable purposes that also requires Charity Commission consent. As 21B notes the judgement as to what is in the best interests of the organisation is ultimately one for the trustees. In extreme cases that can mean they should not implement the members' wishes if doing so would conflict with their reasonable judgement of what is in the best interests of the organisation.

 

As 21B notes the judgement as to what is in the best interests of the organisation is ultimately one for the trustees. In extreme cases that can mean they should not implement the members' wishes if doing so would conflict with their reasonable judgement of what is in the best interests of the organisation.

Which sounds exactly like the reasoning that enables the 5 to fight off any demand to make changes to their approach. And so the debacle carries on.

 

John, you keep repeating this as if it is the be-all and end-all of all the problems being experienced by various trusts. What we seldom see you do is suggest practical means by which some of these problems can be addressed. Good chairmanship, communication, and open-mindedness, together with an acceptance that differing views are healthy and that those expressing them are not "wreckers", might be a good starting point. As @21B says "It isn’t simply that a board of trustees is foolish to ignore the members. . It must not do so."