Is your organisation thinking of setting up a branch overseas? While local law will need to be considered, governance and structures which ensure there are connections into the future are also important factors in setting up branch organisations.
We have written this with international charities in mind, as for a business venture, there are different considerations at play.
This is to ensure that child organisations are linked to the founding body and that they have same vision and share a sense of unity and uniformity. Without such governance mechanisms, it becomes difficult for a founding body to guide branch organisations in other countries, or hold them accountable. This can be a problem if connection is lost and potentially the reputation of the parent organisation is impacted by the actions of an offshore affiliated group.
Governance Principles:
Some examples of oversight measures we can help to incorporate into the local organisation’s documents might include;
- Appointment of Governance – before directors/trustees are appointed to the branch organisation, the founding body must give prior written consent of the appointment.
- Removal of Governance – the founding body might be able to remove those in charge of the branch organisation by written notice.
- Amendments to documents – The founding body could be consulted and approve of any changes to founding documents. This should including any changes to the clause that gives you this power, meaning that clause is entrenched.
- Reference of your mission statement or overall purpose (including the specific purpose of branching out globally) and the founding body throughout governance documents.
- Ensuring a consistent name is used at the branch level as well as any logos (see below).
- Ensuring there are consistent purposes across each branch (while recognising there may be local law around what qualifies as charitable if you are a charitable organisation).
- Considering how each branch relates to each other, and how you will incorporate this into the governance documents.
- Ensuring that there is a consistent statement of faith included in all documents if your organisation is religious. This can help diminish the branch disseminating different interpretations or views that are not aligned to the founding body.
In implementing these principles, it is also important to get local tax and accounting advice to ensure there are not unintended consequences.
Intellectual Property:
Another important consideration is intellectual property (IP). This is often a very valuable asset for an entity and is also how an organisation is known. It is important to ensure that the founding body owns the IP that is used by the branch organisation.
- We suggest trademarking the logo and name in jurisdictions where you will operate so that you own it.
- We suggest an IP license with the branches setting out how they can use it and grounds for terminating use.
- Consider ownership of domain names and that you retain ownership of those for each jurisdiction.
- Consider social media accounts and who will run or own them.
This is also another mechanism that can be used to distance yourself from a branch organisation if they are no longer aligned with your views.
Policies:
Having consistent policies will also help as part of the overall governance structure and we suggest creating the following to start:
- Privacy Policy & Data Protection Policy
- Conflict Of Interest Policy
- Child Protection Policy
- Gifts Policy
- Non-Disclosure Agreement
If you are interested in your options and would like to discuss further, please contact our team.
Please note that this article is not a substitute for legal advice and you should contact your lawyer about your specific situation. Please feel free to contact us by phone 03 348 8480.
