In a judgment that will be welcomed by charity trustees across England, Mrs Justice Falk made a particular point to mention the invaluable work that trustees do for charities, often on a voluntary basis, recognising that, "the charity sector depends on there being capable individuals, with a range of different skills, who are prepared to take on trusteeship roles. … It is vital that the actions of public bodies do not have the effect of dissuading able and experienced individuals from becoming or remaining charity trustees".
After a detailed review of the role played by the founder and former CEO of Kids Company, Camila Batmanghelidjh, and the way in which she was managed by the charity trustees, Mrs Justice Falk also concluded that "the CEO was not a de facto director. If I am wrong about that then I would still not have made a disqualification order against her".
These conclusions will go some way to reassuring those who feared that directors' disqualification proceedings in this high profile case would deter people from becoming charity trustees. The reaffirmation of the Court's reluctance to penalise charity trustees acting in a voluntary capacity where there is no suggestion of dishonesty or "any want of probity" is very welcome.
Many in the sector will also welcome the suggestion that the Charity Commission should be the regulator dealing with cases such as this one: "the primary means of regulating trustees’ behaviour, at least in practice, is and should be via the standards set by, and the enforcement powers of, the Charity Commission, being the regulator that has the most appropriate expertise. At the least, this might in practice reduce the risk of charity trustees being held to inappropriately different standards depending on whether the charity in question happens to be incorporated".
The case is a controversial one, which has been the subject of several official reports and a torrent of commentary. No doubt the debate - within and beyond the charity sector - will continue.
Questions prompted by the judgment include, in no particular order:
The judgment also revealed that, as with all charities, there were areas in which the governance arrangements of the charity could have been improved. Whether or not you participate in the wider debates referred to above, the decision provides a reminder to review the governance of your organisation and perhaps ask two further questions: