The Charity Commission requires charity trustees to make prompt reports of ‘serious incidents’. In 2020-21, it received more than 4,000 such reports.
A serious incident is described in the Charity Commission's guidance as an adverse event, whether actual or alleged, which results in or risks significant:
‘Significant’ means ‘significant in the context of [a] charity, taking account of its staff, operations, finances and/or reputation.’
The Charity Commission gives a list of examples of issues which might lead to a report being required: the list starts, understandably perhaps in light of various charity scandals, with safeguarding, but does not stop there. Reportable incidents include financial loss, loss of reputation, unauthorised fundraising, and investigation by other regulators.
It has published some helpful guidance here to assist trustees in deciding whether or not a matter should be reported.
It's important to note that reporting a serious incident is not viewed as a failure of governance; difficult issues arise for many organisations and reporting problems as they arise and, critically, demonstrating how the matter will be addressed, including preventing reoccurrence, is a mark of good charity governance.
The Charity Commission always wants to hear about potential issues from the charity trustees and not from other sources. Depending on your general profile and the nature of your activities, you may be subject to a degree of press interest. If a story is likely to run in the press, or is gaining traction on social media and might be picked up by the mainstream media, then a prompt report to the Charity Commission should be made, whether or not the subject matter of the potential press coverage itself related to a reportable incident.
For example, the guidance mentioned above says that if ‘a visiting speaker has used a charity event to promote extremist messages, via live speech or social media’, then that is reportable. However, it may also be a reportable matter if a charity has either declined or agreed to a controversial speaker joining an event, if that decision is likely to lead to media interest.
A serious incident report will also be needed if the charity has made a report to another regulator. For example, if there is a reportable data breach, such as a leak or loss of beneficiary personal information, and the Information Commissioner has been informed, then a serious incident report should also be made to the Charity Commission.
Reports are made by an online form: the form asks for comprehensive information about the charity and about the incident in question, and also prompts the trustees to explain what steps they have taken to deal with the matter, and how they might prevent something like it happening again. It’s important to give as much information and explanation on these points as possible – the Charity Commission will have more confidence in a charity which takes ownership of difficult issues, than if it appears there is panic or confusion.
The report can be made by an employee of the charity, but they must have the authority of the trustees to make the report, and the report should be endorsed by the trustees.
It is important to note that, once a report has been made, the trustees should continue to monitor the situation. They should update the Charity Commission on any developments and, if a further incident occurs, even if linked to the original incident, it should be reported separately. Trustees should also expect to hear back from the Charity Commission, which may have follow up questions or request an update on the situation.
Trustees should receive regular training to ensure they are aware of their reporting obligations and that they can recognise a potentially reportable situation, should it arise. Senior leaders within charities also need to be aware of these obligations so that they know when to bring a potentially reportable situation to the attention of the trustees.
The team at Penningtons Manches Cooper regularly provide training to trustees on all aspects of their roles including serious incident reporting. Please contact Daff Richardson for further details.