Appointing board members

There are no specific qualifications for being a Director but there are rules in company and charity legislation that set out when an individual is disqualified (i.e. barred) from becoming a Director or Trustee.

The Companies Act states that to be a Director you need to be:

• 16 or over
• not disqualified from being a Director
• not in bankruptcy
• not restrained by the Court from becoming a Director

• not disqualified by the company’s own Governing document.

  https://www.gov.uk/guidance/being-a-company-director

   

Apart from the disqualification and bankruptcy provisions, Companies House will accept nominations for any people the members of a social business deem fit to act in that capacity.

Set up a private limited company: Appoint directors and a company secretary - GOV.UK

The Charity Commission states that to be a Trustee you need to be:

• 18 or over other than for charitable companies or CIO where trustees can be 16 or over
• not automatically disqualified
• not disqualified by the Charity Commission.

Trustees are normally asked to complete a Charity Trustee declaration form to confirm their eligibility.

Further guidance:

• Automatic Disqualifications
• Charity Trustee Declaration

The governing document will set out social business specific information on Board appointments, including:

• how and by who Board members are appointed and removed
• specific social business requirements for Board Members, e.g. skills, representation, disqualifications etc.
• the minimum and maximum number of Board members
• the minimum number of Board members that need to be present to conduct its business (the Quorum)
• the maximum number of years a Board member can sit on the Board (the Term of Office).

Board members always have a duty to avoid conflict of interest and to act in the best interest of the social business. Social business should put in place processes and procedures to identify and manage conflict of interest, including:

• annual conflict of interest declaration forms
• separate declaration of any conflict of interest in individual agenda items at Board meetings. 

Further guidance

• Companies House: Directors Duties
• Charity Commission: Conflict of Interest Guide 

The Mental Capacity Act 2005 needs to be considered when assessing an individual’s capacity to take on a Board member position. It says, ‘assume a person has the capacity to make a decision themselves, unless it's proved otherwise.’

Board members are accountable as a collective. As Board of elected members, people have responsibility for various tasks and roles to ensure the business is compliant. As a collective, the Board will have a shared capacity and understanding of their roles and responsibilities.