Naomi Campbell disqualified from being charity trustee over ‘serious mismanagement’

Posted: 02/10/2024

The Charity Commission recently published the decision of its inquiry into charity Fashion for Relief, and concluded with the following statement: ‘There had been serious misconduct and/or mismanagement in the administration of the charity by its trustees since it was established.’

The charity was removed from the Register of Charities on 15 March 2024 and as part of the conclusion of the inquiry, two of the trustees (one of whom was supermodel Naomi Campbell) were disqualified.

Background to the inquiry

The Charity Commission opened a proactive compliance visit and inspection (CVI) case into the charity in 2020 following a review of information submitted in the charity’s annual return for the financial year ending 5 April 2018. The CVI case was closed on 9 March 2021 with the issuing of an action plan.

The action plan set out actions for the trustees to take to address failings in the charity’s governance and management, including ‘recording trustee decision making, to implement partnership agreements, to strengthen the charity’s financial controls, to implement policies on reserves, social media and risk management, and for the trustees to ensure that required annual financial information was submitted on time to the Commission’.

Following a review of the trustees’ response to the action plan, along with other information it obtained, the Charity Commission opened a statutory inquiry into the charity under section 46 of the Charities Act 2011 on 8 November 2021.

Scope of the inquiry and findings

The scope and findings of the inquiry were as follows:

Whether those in control of the charity had properly exercised their legal duties and responsibilities under charity law in its administration:

• The trustees failed to comply in full with the action plan within the required timeframe, providing a limited response to the Charity Commission outside of the deadline.
• The trustees also failed to comply with the charity’s constitution in the following ways:
  • did not keep meeting minutes (clause 23);
  • failed to manage conflicts of interest (clause 7);
  • failed to submit accounts and annual returns on time (clause 24).

The financial management of the charity, including payments made to trustees and the level of charitable expenditure:

• a review of the financial records identified that the trustees expended €14,800 for a flight on 11 May 2018 from London to Nice;
• €9,400 was paid from the charity’s funds for three nights’ accommodation for Naomi Campbell’s stay at a hotel in May 2018. A further €7,939.75 was expensed by Naomi Campbell and paid for by the charity. These costs included spa treatments, room service, and the purchase of cigarettes and hotel products;  
• one trustee received £290,572 in consultancy fees (excluding expenses). These payments were not authorised by the Charity Commission, by the Charities Act 2011, the court or otherwise in accordance with the charity’s constitution. Consequently, all such payments were unauthorised and made in breach of trust.

The governance and management of the charity by the trustees, including the failure to file statutory returns on time:

• the trustees failed to keep records of their decision making; this included invoices, receipts, partnership agreements, due diligence checks and meeting minutes;
• the charity’s accounts and annual returns were filed late four times between the financial year end 5 April 2016 – 5 April 2020.

Whether there had been misconduct and/or mismanagement by those in control of the charity:

• the charity failed to manage its partnership agreements, leading to disputes with the organisations it partnered with.

Conclusions

The Charity Commission concluded that: ‘The charity was poorly governed and managed, including management of its finances. The trustees’ lack of record keeping compounded these issues and required extensive use of the Commission’s information gathering powers to establish facts and obtain records relating to the charity to be able to reach the findings set out in this report.’

In its report, it highlighted three issues for the wider sector to consider:

• financial controls – trustees must use their charity’s funds and assets in furtherance of the charity’s purposes: having proper financial controls will enable this;
• conflicts – having a conflict of interest does not mean trustees have done something wrong, but they need to act to prevent conflicts of interest from interfering with the ability to make a decision only in the best interests of their charity;
• accounts and trustee compliance – trustees must remember to file their annual updates, returns and annual reports on time as this is a legal duty.

If you have any queries about the issues raised above, please contact a member of our charities group, or your usual Penningtons Manches Cooper contact.

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