CIC Association

Serving Community Enterprise

How many Directors must a CIC have in order to set up and maintain a CIC? One of our Directors wishes to stand down due to ill health, but where will that leave the CIC?

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Your articles may specify a minimum, but it is possible - though not advisable - for a CIC to continue with just one director (as long as they are a real person not a 'legal person' - ie. a company).

The usual practice is that if the number of directors falls below a minimum specified in the articles the director(s) or members meet just to appoint another director.

Also bear in mind that funders are likely to look for some strength in depth - a limited liability structure with a very small number of people involved will put off most funders, especially grant-making bodies, which often also want some/most of the directors to be financially disinterested.

Finally, note that there is in the CIC legislation an in principle requirement for 'stakeholder' participation, but what this really means is not specified, so not in practice enforced.

Hello Geof, thanks for this reply . I am just sending the forms to set up my CIC, and we have two directors.

 

I am now also getting the both of us to come to an agreement as to our roles and responsibilities and general terms of working together, due to experiences I have had in the past of working with people where because we did not clarify our terms of working together it led to a lot of friction and confusion.

 

Thanks also  about bringing to our attention, the point regarding the funders which is very useful

I'd echo Geof's comments. In addition, maintaining a "healthy" number of directors needs to be ongoing. A CIC should aim to have six or eight directors, because resignations and absence will always deplete this number to a level approaching the quorum threshold.

 

When working with not-for-profits I encourage directors to plan identification and development their successors. Shadowing, co-option and stand-in roles can be found for new recruits to keep them "warm". Losing a Chairman is also a risk that needs to be planned for.

Thanks for the great advice. We currently have five and would be depleted to four if this director left, so I guess it would be a good idea to begin lining someone up for the job..particularly as I note in another discussion that funding bodies prefer a goodly number to ensure a broad range of business knowledge and minimise any creative accounting or operation of the business.

 

Thanks again...

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