Leadership and Governance

East London Cultures School CIC is all about making an impact by enriching our students' education experiences. Our vision is working in the fields of languages education, art, dance, music, sport, and the environment, to help people to build up confidence and skills, and improve community life in East London.

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East London Cultures School CIC is passionate about exploring how we can best support and develop community transformation across our city. We have established a clear structure for both our governance and the involvement of our guarantees.

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East London Cultures School CIC Articles of Association contain detailed governance requirements, however, compliance with the regulatory codes, (suitably adapted to East London Cultures School CIC particular circumstances) is also seen as good practice; For example, the appointment of independent non-executive directors, a professional services & support team, internal and external review committees and the clarity of roles such as Chief Executive and Managing Director, all contribute to the transparency of East London Cultures School CIC and improved guarantee confidence.

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Director Responsibilities

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As with any other company, the directors of East London Cultures School CIC occupy an important position of trust and general company law imposes on them a range of duties to the company and other responsibilities. The directors are also responsible for ensuring that the company meets its statutory and other obligations.

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In addition to these general responsibilities East London Cultures School CIC directors are also responsible for ensuring that the company is run in such a way that it will continue to satisfy the community interest test. In practice, this will mean having regard to the interests of members of the local community, and in some cases giving more weight to those interests than to generating financial returns.

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In most companies the day to day management of the company is in the hands of the board of directors although certain functions may be delegated to specific directors, such as the Chief Executive, Managing Director and other delegated roles. It is essential to good governance that the directors clearly establish the lines of delegation. The authority and responsibility of those given delegated power need to be established and systems of control, including where appropriate internal audit, must be set up.

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It must be remembered that the term director includes anyone who performs the role of a director whether formally appointed or not. A person who directs the policy and makes major decisions with regard to East London Cultures School CIC may therefore be regarded as a de facto director or a person upon whose instructions the appointed directors act (excluding those giving professional advice as part of the professional services & support team) may be regarded as a shadow director. It is therefore particularly important with Community Interest Companies, where guarantees are encouraged to participate in running the organisation, to clearly establish respective roles and responsibilities.

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Directors’ Remuneration

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We do not currently pay Directors, but, because East London Cultures School CIC is a trading business that needs good directors to be successful, we may in the future need to remunerate directors in order to ensure that we achieve our full potential to benefit the community.

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East London Cultures School CIC exercises the following remuneration policies:

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• Directors’ may be paid for their services

• Directors’ remuneration will be set by both an internal and external review committee

• Directors’ remuneration will never be more than is reasonable

• Directors’ remuneration arrangements will always be transparent

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There are a range of key considerations which East London Cultures School CIC will bear in mind when setting directors’ remuneration, and these are:

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• Advice from internal and external review committees

• Particular responsibilities, skills and expertise of individual directors

• Nature, size and performance of the business

• Financial position of the company

• Published guidance on good corporate governance

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As a general principle, the remuneration of East London Cultures School CIC directors should be no more than is reasonable having regard to the contribution which they make to the success of the company and the benefits East London Cultures School CIC provides for the community.

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Community Interest Test and Asset Lock

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Two aspects of the legal framework which applies specifically to East London Cultures School CIC, are of particular importance in relation to directors’ remuneration: these are the community interest test and the asset lock.

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The community interest test requires East London Cultures School CIC to conduct its affairs in such a way that a reasonable person might consider that our activities are being carried on for the benefit of the community (The legislation also provides that a CIC, which carries on activities that a reasonable person might consider only benefit its own employees, will not satisfy the community interest test).

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These rules apply as much to the remuneration of directors as to any other area of a CIC’s business. For example, a CIC does not satisfy the community interest test if it is ostensibly established to benefit the community by devoting the profits from its trading activities to charitable or other community causes, but in fact consistently sets its directors’ remuneration at a level which means that the company is left making little or no profit for distribution to these good causes.

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The asset lock is the mechanism that ensures that a CIC’s assets are used for the benefit of the community. It is embodied in the requirement that every CIC must include in its Articles of Association a prohibition on transferring any of its assets other than for full consideration (subject to certain limited exceptions, such as gifts to charities or the payment of dividends subject to the dividend capping rules).

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In the context of directors’ remuneration, consideration means the value which the company (and through it, the community) gets from having a particular individual as a director in return for transferring some of its assets to that individual by way of remuneration. Put simply, if a CIC pays its directors more than they are really worth to it and the community that it serves, it may well be breaching the asset lock. Such a breach may give rise to legal action.

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The overall contribution which a director makes to the success of the East London Cultures School CIC business and the attainment of its community benefit objectives, is a key consideration when determining whether that director’s remuneration is consistent with the Asset Lock.

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Transparency

 

East London Cultures School CIC will always be transparent about directors’ remuneration. No effective control can be exercised over the remuneration of directors unless directors’ remuneration arrangements are transparent. East London Cultures School CIC is obliged to disclose certain details about their directors’ remuneration as part of its annual CIC Report. In addition, East London Cultures School CIC will keep copies of directors’ service contracts, or memoranda of their terms, available at an appropriate place for inspection by our guarantees.

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Freedom of Information

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The Freedom of Information Act creates a statutory right for access to information in relation to bodies that exercise functions of a public nature, three different kinds of bodies are covered under the act. Public Authorities, publicly owned companies and designated bodies performing public functions.

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Because East London Cultures School CIC exists to provide benefit to members of the local community, its Directors have also taken the decision to facilitate Freedom of Information requests via this website.

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You can make your request in writing with the information of your full name, email address, What's App number, postal address and the description of the information you see by getting in touch, which will help us deal with your request as promptly as possible.

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Good Governance Code

 

The Board of East London Cultures School CIC have adopted the Good Governance Code. This Code was first published in 2005, in response to demand from the voluntary and community sector. It was written by representatives of the sector, with support from the Charity Commission, and was championed and promoted by the Governance Hub.

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The 6 key principles of the Good Governance Code are:

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• Principle 1: Understanding the Board’s Role

• Principle 2: Doing what the organisation was set up to do

• Principle 3: Working Effectively

• Principle 4: Control

• Principle 5: Behaving with Integrity

• Principle 6: Openness and Accountability

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The Code sets out the six Code principles, with an explanation of why each principle is important, key legal requirements that an organisation must meet, and examples of how to put the principle into practice.

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• Click here to download the full Good Governance Code as a PDF

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Regulation of Community Interest Companies

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The Office of the Regulator of Community Interest Companies decides whether an organisation is eligible to trade as a Community Interest Company (CIC). It is responsible for investigating complaints – taking action if necessary – and it provides guidance and assistance to help in the management of CICs.

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CIC Regulator
Companies House
Crown Way
Cardiff
CF14 3UZ