Joint Committee on Justice, Defence and Equality debate -
Wednesday, 18 Jun 2014

Charities Regulatory Authority: Chairperson Designate

Chairman

The purpose of this meeting is to have an engagement with Mr. Conor Woods, chairperson designate of the Charities Regulatory Authority.

Before I ask Mr. Woods to make his opening statement, I wish to draw his attention to the fact that by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by the committee to cease giving evidence on a particular matter and they continue to do so, they will be entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or any official by name or in such a way as to make him or her identifiable.

Mr. Conor Woods

I have the honour to be appointed as chairperson to the Charities Regulatory Authority and look forward to help bringing about a framework of regulation, accountability and transparency to the charity sector. I am from Carnaross, Kells, County Meath, where I live with my wife and our three children. I went to school in Kells Community School and then to Dublin City University where I graduated with an honours degree in accounting and finance in 1995. I qualified as a chartered accountant in 1998 and spent several years in KPMG before joining Kingspan Group PLC in 2003. In 2005, I joined Russell Brennan Keane Chartered Accountants and worked there as a partner for seven years, before leaving in 2013 to establish my own practice in Kells, County Meath. My wife is chartered accountant and we met while we were in KPMG. She also works in the practice with me.

This is an historic moment in the history of the charity and voluntary sector. We have a significant weight on our shoulders and a significant amount of responsibilities. I look forward to embracing all of these challenges and responsibilities with passion, hard work, integrity and honesty. The functions of the Charities Regulatory Authority are clearly defined in the Charities Act 2009.

The role of the authority is enshrined in law.

In conjunction with these functions, there is an immediate need to restore confidence, transparency and assurance to the charity and voluntary sector in Ireland. There is also a need to build a framework for registration, regulation, reporting and compliance. This must be done in a proportionate and balanced manner. We need to work hard on framing this strategy and developing the framework for the delivery of this strategy in the coming years.

Perhaps one of the most important immediate objectives for the board will be to develop the short to medium-term strategy of the authority and to ensure it is rolled out. As the committee is aware and as defined in the Act, the charities regulator will be officially appointed on establishment day. I am delighted to learn that the establishment date is now set at 16 October 2014. This day will crystalise the formal appointment of the charities regulator, the authority and the CEO. This will also crystalise the dissolution of the Office of the Commissioners of Charitable Donations & Bequests in Ireland, which will be integrated into the authority.

There are 16 board members of the Charities Regulatory Authority, including the chairman. The board shall adopt and maintain the highest of standards in how we operate, how it is governed and how it works together as a unit. The board shall implement and adopt best practice corporate governance. In accordance with the code of practice for the governance of State bodies, the board shall establish committees to ensure that it is always informed, that the work of the authority is focused on key areas and that the authority works in a structured and strategic manner. To conclude my opening foreword, I wish to say that I am excited about the work of the Charities Regulatory Authority and the work that I look forward to carrying out as chairman of the authority.

Chairman

Has Deputy Anne Ferris a question?

Deputy Anne Ferris

I welcome Mr. Woods and congratulate him on his appointment. I am delighted to see that he has put in writing that he is excited about the work of the Charities Regulatory Authority. I have a few questions and will address one of Mr. Woods's last points first. It relates to the establishment of subcommittees in key areas. Can he comment on how he envisages these subcommittees being structured and composed and the key areas he intends to prioritise within the authority?

Mr. Conor Woods

The code of practice for State bodies outlines the best practice for corporate governance for State bodies. That is in situ at the moment. The subcommittees have yet to be formed because the board has only met once. We have two meetings scheduled inside the next five weeks. The composition and membership of those subcommittees will be decided upon at those two meetings. The composition will centre around the strength of the individuals' expertise at board level. For example, the composition of the finance subcommittee may consist of members of the board who have expertise and skills in that area. In respect of the governance subcommittee, there are a number of board members who have expertise in areas of governance. The composition of the board subcommittees will consist of members of the board with skillsets in those specific areas.

In terms of which subcommittees we will form, these have yet to be ratified and approved by the board but it is likely that there will be subcommittees around areas like finance and governance and perhaps the integration of the Commissioners of Charitable Donations & Bequests in Ireland into the authority as some work will be required to ensure this smooth transition into the authority. We envisage that our subcommittees will, hopefully, be formed by the end of July and they will consist of people from the board who have strengths in those specific areas.

Deputy Anne Ferris

One of the concerns in establishing the authority was the availability of resources, including staffing and financial resources. Is Mr. Woods satisfied that the authority will have enough of these resources to be able to carry out this big job of work?

Mr. Conor Woods

That is a very good question. Resources are always a challenge. We are a new authority with a very clear conviction as to where we want to go as an authority and board. As chairman of this authority, I will lead that out to the execution of the full delivery of the Charities Act. However, we are in an era where resources are tight. We have limited resources and we will work with the Minister and the Department to ensure we have the resources at our disposal to allow us as an authority to implement the full strands of the Act. We are acutely aware that resources will be a pressure point but we just have to work with that and with the Minister in the coming months to ensure we have what we need. That will obviously be a challenge but we must work on dealing with that.

Deputy Anne Ferris

It is very important that the authority has the proper resources so that it will have teeth to carry out this important work. An issue of concern is the number of un-incorporated charities. Others have been established as companies and would be subject to the rules as set down by the Director of Corporate Enforcement but other charities have been established as trusts. Can Mr. Woods comment on the obstacles he foresees when consolidating the many forms of charities under the authority's regulations because there are so many of them with different names or labels?

Mr. Conor Woods

There are approximately 8,500 charities in Ireland, approximately 5,000 of which are incorporated entities which would probably take the legal form of a company limited by guarantee whose structure would be that of a company without any share capital but which would be governed by the Companies Acts 1963 to 2013. The Deputy made a very important point in the context of the cocktail of different types of entities that exist for charities. I do not see that as being a challenge because a charity is a charity is a charity. If it is a charity, it will be governed by the Charities Act irrespective of what legal form it takes. There may be nuances around initial reporting because some charities will report into the Companies Registration Office and others will not because they are not companies. We will be working with the different arms of the State such as the Companies Registration Office and the Revenue Commissioners in ensuring that reporting is streamlined over time so that regardless of the legal form a charity takes, it is under the auspices of the Charities Regulatory Authority and must abide by the regulations stipulated in the Charities Act. The Act is flexible and allows organisations to take different legal forms. Certain jurisdictions have gone down a route whereby if an organisation wants to become a charity, it must become a specific type of legal entity. That is one option that could be explored but it could be years away because there are many hoops to jump between now and then. Certainly, the fact that charities take different legal forms has thrown up challenges in the past because they have different responsibilities in terms of reporting and different obligations as trustees or directors. Directors have fiduciary duties in accordance with the Companies Act whereas trustees do not fall under its remit. Thankfully, we now have an Act that governs all charities.

Deputy Anne Ferris

This authority is very welcome given the bad publicity about certain charities that emerged recently from the Committee of Public Accounts. It is very important that people have confidence when they donate to charities and that charities can have confidence that the public in the main has confidence in them and where their money is going.

Chairman

I have a few questions. Will the charities sector contribute in some way to the cost of the authority?

Mr. Conor Woods

We are working on the area of fees and income for the authority. The Charities Act does allow for charities to be charged a fee which may be determined by the Minister and will be set by the authority. Those costs will be charged to go towards the cost of establishing and maintaining the register.

It would be premature at this stage to indicate the level at which the fees will be set because the board has to go through its own process in conjunction with the chief executive designate and her team. Some form of fee will be coming down the track, however, and we will be consulting the Minister to work out the details of the fees in a collaborative manner.

Chairman

What complement of staff does Mr. Woods envisage in the authority and what will be their composition?

Mr. Conor Woods

We are starting from a blank canvas. On our establishment day we will have a complement of 11 staff, of whom seven will come from the Office of the Commissioners of Charitable Donations and Bequests. In considering what we want to achieve and the number of organisations and charities that we will be regulating, we can examine the structures in other countries, such as structures for compliance, monitoring, enforcement and regulation, with a view to emulating best international practice and standards. The charity sector is quite a large sector, with overall income of €5 billion or €6 billion. It is estimated to produce 3.5% of our GDP. We have to put proper resources in place if we are to deal with the sector. The board will have to evaluate our budgets and costings but we will certainly have to develop the office of the chief executive and her team if we are to execute the strategy. We could ultimately require between 20 and 30 staff if we are to deliver on what the Act requires from us. The board has only recently been formed, however, and these issues will be ironed out when we sign off on the strategy. We have a good feeling for the different arms of the organisational structure we require, and our requirements will certainly not be achieved with current staff numbers.

Chairman

Mr. Woods's comment on the need to restore confidence, transparency and assurance is key to the matter. I know from my own dealings with various charities that they are anxious for this to occur because recent events have done considerable damage to the reputation of various charities and the sector as a whole. It is timely that the board and the regulations are now being established. Mr. Woods mentioned a figure of 8,500 charities. Are these registered charities?

Mr. Conor Woods

There are approximately 8,500 registered charities. The chief executive designate is engaged in the process of building the register. We will only know the exact number of charities when we get every charity to register with the authority.

Chairman

Did Mr. Woods draw the figure of 8,500 from the number of charities registered with the Companies Registration Office, from Revenue or from both bodies?

Mr. Conor Woods

They are not registered anywhere in that a charities register does not yet exist. We are building this register for the first time but the Revenue Commissioners have a record of all charities with tax exempt status. That is the best yardstick at present. With the register, which is a key element of the Act, we are building a proper record of charities for the first time in this country so that information is available to us, as regulators, and to the public on the standing of charities and details about their trustees, their premises and their activities. It will give clarity to the public, which is a key issue for us, on the identity of registered charities.

Chairman

We are aware of organisations which are not registered as charities but are collecting money for various causes. What approach will the regulator take on these organisations? Will it be pursuing them to ensure they are registered and above board, and that their funding is used for the purpose for which it is collected?

Mr. Conor Woods

If bogus organisations are purporting to be charities, that is a big issue. The charity register will establish exactly who is bogus and who is not. If those organisations are not on the register and they are purporting to be charities, they will be in contravention of the Act and the authority will take whatever means are necessary to ensure their activities are halted. The register will allow us to identify clearly whether an organisation is a charity.

Chairman

That will be very important.

Deputy Anne Ferris

That will be very helpful because people were heretofore unable to get that information from the Revenue Commissioners. They will be able to contact the regulator to find out whether an operator is real or bogus. I presume that if an organisation is bogus it will be a matter for the Garda to address. I suggest we invite Mr. Woods back to the committee this time next year to get an update on the regulator, find out whether it is facing any financial or resource problems and make sure he is still excited about his work.

Chairman

If that is agreeable, we will ask Mr. Woods and the new CEO back next January or February to update us on how their work is progressing.

Mr. Conor Woods

I would delighted to appear again before the committee and to address any questions it might have. I hope I will be able to provide positive feedback on our progress.

Chairman

On behalf of the committee, I thank Mr. Woods for taking the time to meet with us and I wish him and the board well. We are somewhat depleted in numbers today because so much is happening but I am sure our next meeting will be attended by more members.

Sitting suspended at 2.27 p.m. and resumed at 2.28 p.m.