Board member eligibility
Roles and responsibilities
Not everyone is qualified or able to be a director or trustee. Here, we consider some of the legal considerations around this issue to bear in mind prior to the recruitment process.
Some organisations place restrictions on eligibility around at least some positions on the board. Examples might include:
- being a member of the organisation
- election or nomination by the membership or by particular stakeholders (such as geographical areas or sporting disciplines)
Governing documents may also stipulate other reasons for removing or rendering ineligible a board member, such as:
- non-attendance at board meetings – normally accompanied by a specified number or timeframe
- being convicted of an offence or offences
- breaching the code of conduct or otherwise bringing the organisation into disrepute
It is always worth consulting the governing document before embarking on the recruitment of a new board member or applying to become one.
Legal considerations – can I be a director or trustee?
There have always been legal restrictions on who can serve as a board member. These change occasionally and also differ according to the structure or form the organisation takes. The age limit, for example, is 16 years and over to be a director of a company, including companies limited by guarantee and charitable incorporated organisations, or 18 years and over for trusts and unincorporated associations.
Additionally, both company and charity law set out restrictions relating to certain criminal and financial proceedings and covering conduct in the running of organisations.
Individuals can be disqualified from being a company director for failing to meet their legal responsibilities. Courts can make a disqualification order for reasons such as:
- unfit conduct in the promotion, formation, management or liquidation of a company
- wrongful trading
- failure to comply with filing requirements under the Companies Act legislation
- following conviction for criminal offences (in the UK or abroad) related to the promotion, formation, management or liquidation of a company
Examples of ‘unfit conduct’ include:
- conduct that seeks to deprive creditors of assets
- continuing to trade to the detriment of creditors when a company is insolvent
- fraudulent behaviour
- failure to keep proper accounting records
- failure to prepare and file accounts or make returns to Companies House
- failure to comply with other statutory require