The DfE published new model Articles of Association on 30 June 2021. The model itself includes a helpful list of the areas which have been updated. We consider some of the key changes and what the implications might be for your academy trust.
As a general comment, the changes reflect the continuing development of DfE policy around the separation and independence of members from the board. The model applies to both single-academy trusts and to multi-academy trusts.
It does not apply to those trusts which are operating on the models specific to the operation of UTCs or co-operative academies, nor is it an update to the models agreed with the Catholic Education Service or the Church of England Education Office. These trusts might however wish to consider whether there are any provisions which might be of benefit to the governance of their trust.
What Are the Main Changes?
These are as follows:
A strict requirement that a majority of the members are not also trustees. This is a step further from it being a 'strong preference' of the DfE.
The circumstances in which a member ceases to be a member are increased, bringing it more in line with the position for trustees).
A new express provision provides that the members "shall act in a way which they decide, in good faith, will be most likely to further the Objects of the Academy Trust". This is not a new legal duty for members but reflects the judgment of a case in the Supreme Court last year.
The Articles necessarily require that an AGM for the members be held (some Trusts might have this as optional requirement).
The quorum for the members has been increased from two to "a majority of the members" in office.
New Articles at 23A and B are added to provide for members to attend general meetings (other than the AGM which must still be attended in person) by 'phone or other electronic means. The previous model doesn't provide for this and the saving legislation put in place during the pandemic to permit virtual meetings of members has now expired.
The word 'Clerk' is replaced with the term 'Governance Professional' in recognition of the importance of this role and its wider scope.
A footnote confirms the DfE's position that "Whilst the members can decide whether to appoint the trust’s CEO/Principal as a trustee, the Department’s strong preference is for no other employees to serve as trustees in order to retain clear lines of accountability through the trust’s single executive leader." (Note that under the new Academy Trust Handbook and with effect from 1 March 2022, the appointment of the senior executive leader as a trustee must have the approval of the members irrespective of whether the Articles require this).
With the exception of parent trustees, the members (or the trustees where relevant) can determine a shorter term of office for trustees than four years at the point of appointment.
The requirement under the Academies Financial Handbook (now the Academy Trust Handbook) to appoint a Clerk has now been added to the Articles.
The provisions providing for trustees to attend meetings virtually have also been updated with clarity as to how individuals might join and where the meeting is deemed to take place.
Pronouns have also been updated to ensure that they are gender-neutral throughout the document.
What Does This Mean for Our Trust?
Many trusts have recently updated or are in the process of updating their Articles following the publication of last year's Academies Financial Handbook which covered, among other matters, the prohibition on employees being members. You are not required to start again with the new model.
As we discussed in more detail in our blog, trusts are required to review their governance arrangements annually and should consider the extent to which they are effective and align with DfE policy (as set out in the Governance Handbook, the Academy Trust Handbook and the Academy Trust Structure: Governance and Role Descriptorsdocument). Beyond this, there is no legal requirement for Trusts to move on to this new model.
For those that might be thinking of updating their Articles, do be mindful of:
the consents which might be required and
that you might also be required to update your funding agreement. We consider this further here.
If you would like to discuss the implications of this new model for your academy trust, please contact Chloe Brunton in our Academies, MATs & Schools team on 07920 281889, or complete the form below.