CIC Association

Serving Community Enterprise

I have done a lot of reading, but can't find clear answers..can anyone help?

What is the role of members of a CIC? What is their power & responsibilities compared to directors?

I believe new members need to be accepted by directors, but how do they apply (nothing is specified in Art. of Assos?)

I also believe that we need to keep a register of members, but do not need to publish the list at companies that correct?

We are currently 2 directors, subscribers and members. One director is stepping down. Does that director also ceases to be a member?

As there is only two of us Directors/members, I have declared us as PSC. Is that correct? The actual running of the school is done with a committee.  Should these people who attend regular meetings be members, if so, does that affect our PSC status?

Thanks for your help!

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In very simple terms

In a 'small membership' CIC - members are usually the first subscribers- which in simple terms means the first Directors. In your case director/member are the same thing

In a large membership CIC- members are a wider group from which they elect the Directors 

The Director stepping down ceases to be a member (as described in your articles of association) You may need to adopt new Articles if they do not cover the situation of being run as a single director CIC.

The two existing directors ar most probably  PSCs. If they have the relative powers described in Company House Rules.more than 25% of voting rights etc so usually this would be yes.

Best of luck

Thank you John.  Should our management committee personnel become members?  Who should make decisions like staff or directors' wages?  Recruiting new staff?  Recruiting directors?   Does the management committee have any voting rights alongside the directors if they are not members?

Hi |Helen

So much is subjective, you can basically arrange it as you want it. You could have representation on the board from the management committee, for example 2 of 6 directors or you could draw all 6 directors from the committee. The board should approve wages formally, but you could have a system where the management committee approve any decisions and then send to directors to execute.

The directors can lead and make decisions, the management committee can make decisions and send to directors,its up to you. Im just guessing that having directors lead and being advised by a non voting committee may suit.

Is the committee made up of parents?

Who actually makes the decisions now?

Do you need to ensure certain individuals remain in overall control?

We have been running as a non-profit organisation for over 25 years. We have always been managed through a Committee. We changed to a CIC set-up to protect the management team and limit liabilities. The chair person (with school governor experience) and the treasurer became the founding directors/members. We assumed to be ultimately legally responsible should something go wrong. (Having led the group for over 15 years, we were also planning on stepping back from full daily involvement to leave the management committee do the day to day work!) As a director I see my role as maintaining the ethos of the group, and supporting the management committee.

The management committee are reluctant to become directors because they think they are protected from all legal responsibilities. I have a particular concern with the head of the teaching team who has the day to day responsibility of recruiting teaching staff (approx 30), ensuring the safeguarding procedures are observed (150 pupils), etc. That person does not have the title, but is she de facto a director, and should she be recognised as such to avoid any ambiguity with new recruits to the job?

In answer to your questions:-

All committee members (and most of our teaching staff) are recruited from the parents. The committee is made-up of the group’s admin staff. It is very difficult to get parents involved, or simply to turn-up at meetings.

Decisions used to be made by consensus within the committee. Becoming a director resulted in the person who used to be chair wanting to impose her views, which the team didn’t accept. She is stepping down. Directors and committee members are all in effect volunteers. We do the work for the good of the school. It is therefore important for each person (who gets involved in the committee to see the school succeed) to have the right to vote. Can you suggest a way for us to achieve that? Isn’t this what “members” are for?

A last concern is electing/removing directors. Our statutes dictate that a minimum of 2 directors are required, and a quorum of members can remove directors. As we are both the only directors and members, how do we

1. remove a director

2. select a new one – does the director who steps down have a say in selecting her replacement? As we are now, does the committee?

Your last question is the big one. I do worry about keeping the ethos of the school, and also about having an inexperienced committee. We have had a big turnover of staff these past few years, and it is probably important for the continued success of the school to have someone at the top who has that long experience. That being said, had my colleague not stepped down, we may have ended up with a walk out of the committee.. Do you have any suggestions?

You can control/restrict members rights as you want, for example you can have one class of members who vote and one who doesnt. This should mean you can organise control to suit you specifically, from 1 person in charge right through to a co-operative cic with one member one vote.

The way your new directors are elected will be detailed in your Articles of Association.

You could elect new directors from the member committee, one problem is the same terms can mean different things, for example you could call your directors the management committee so it is difficult for me to know exactly.

The head of teaching isnt necessarily a defacto director as you describe.

The director stepping down shouldnt have 'THE' say, perhaps that should be the management committee. is probably important for the continued success of the school to have someone at the top who has that long experience. That being said, had my colleague not stepped down, we may have ended up with a walk out of the committee.. Do you have any suggestions?

Choose the system that you all believe in your hearts will keep the thing thriving, what  I have boiled it down to is you saying 25 years of joint decision making went well.



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