The former trustees of Kids Company have welcomed a High Court judgement clearing them of being unfit to be company directors.

The case had been brought by the Official Receiver against the charity’s former trustees and ex-chief executive Camila Batmanghelidjh.

The Official Receiver had sought to disqualify the trustees and Batmanghelidhj from being company directors following the collapse of Kids Company in 2015.

But in her judgement Mrs Justice Falk said: “The public need no protection from these Trustees.

“On the contrary, this is a group of highly impressive and dedicated individua s who selflessly gave enormous amounts of their time to what was clearly a highly challenging trusteeship.

“I have a great deal of respect for the care and commitment they showed, and the fact that they did not take the much easier path of not getting involved in the first place or walking away when things got difficult.”

Kids Company full judgment and summary available here https://t.co/1O5ABYBFoD

— Judicial Office (@JudiciaryUK) February 12, 2021

The former trustees are Alan Yentob, Richard Handover, Francesca Robinson, Jane Tyler, Andrew Webster, Erica Bolton, Vincent O’Brien.

Five of the trustees, including Alan Yentob, have been represented by the legal firm Bates Wells.

In a statement released by Bates Wells, the former trustees said: “As the former trustees of Kids Company, we welcome Mrs Justice Falk’s judgment in the High Court clearing us of the charge by the Official Receiver that, in our management of Kids Company, we were unfit to be company directors, concluding that she was ‘wholly satisfied’ that the disqualification was unproven and unwarranted.”

‘Gross injustice’

Bates Wells added: “We are delighted with the total vindication of our clients by this judgment. The Court has rightly found that they acted responsibly and would be a credit to the board of any charity. They are “highly impressive and dedicated individuals” whose good work has been recognised and reputations preserved.

“By contrast, the Official Receiver’s conduct and ill-conceived claim have been harshly exposed.

“It is shocking that a case with profound implications for the charity sector should have been brought on such flimsy grounds, wasting millions of pounds of taxpayers’ money and causing years of unnecessary anguish to the defendants. Dedicated service by charity trustees must never again be repaid by such gross injustice.

“We hope that this victory will ease anxiety in the charity sector and that good people will not be deterred from serving as charity trustees.”

Rosalind Oakley, chief executive of the Association of Chairs, is concerned that the publicity around the case may put people off trustee roles.

“We are concerned that despite the trustees being cleared, the publicity surrounding this case may still deter people from joining trustee boards or for boards themselves to become excessively risk averse.

"Kids Company was in many ways an atypical charity with an unusual funding model. Nonetheless, in our view, the case offers important lessons for good governance and board practice. We will be studying the judgment and discussing the implications with our members."

Good governance

Mrs Justice Falk’s “benevolent approach to charity trustees that today’s Kids Company verdict has upheld” has been welcomed by the ICSA: The Chartered Governance Institute.

“Overall, the judgement underscores the importance of good governance: of effective oversight, training, assurance and risk management, all of which is best supported by a governance professional,” it said.

The Institute’s policy and research director Peter Swabey added: “There are almost one million volunteer trustees in England and Wales and many will have been relieved the long-standing tolerance of the Court for charity trustees who have not committed fraud or deliberately misled or mismanaged the charity’s resources is re-affirmed.

“Charities, like other types of organisations, fail from time to time despite the best efforts of trustees and sending a message of support will act as a ‘safety net’ for volunteer trustees trying to do their best. Removing that ‘safety net’ could have negatively impacted the number of people willing to take on a trustee role.

“Judge Falk is quite right to point out the importance of the charity sector being able to attract a strong calibre of trustees, ‘The charity sector depends on there being capable individuals with a range of different skills who are prepared to take on trusteeship roles.

"It is vital that the actions of public bodies do not have the effect of dissuading able and experienced individuals from becoming or remaining charity trustees."

Charity’s collapse

Batmanghelidjh has long denied blame for the charity’s collapse. In an interview in 2017 she said that her and her team “were not responsible for the closure of Kids Company. Not at all, and I’m being absolutely clear about that”.

The charity supported vulnerable children in London. Bristol and London and had received around £43m in public funding over 12 years, including accepting a final £3m a few days before it collapsed.

In 2017 it emerged that the government wanted to bring legal proceedings against Kids Company’s leadership team to disqualify them from running or controlling companies.

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