Charitable incorporated organisation members' duty to act in good faith is subjective
In a case involving a dispute between two parties in a church, which was being re-structured as a charitable incorporated organisation (CIO), the High Court confirmed that a member of a CIO is to exercise their powers subjectively.
The Court referred to the case of The Children's Investment Foundation Fund (UK) v Attorney General Ch 139 where the Court of Appeal held that members of a charitable company owed a duty corresponding to that specifically imposed on members of CIOs by s. 220 of the Charities Act 2011.
"In other words, the member must exercise the powers that he has in that capacity in the way that he decides, in good faith, would be most likely to further the purposes of [the charitable company]. It should be stressed that this duty is subjective: in other words, that what matters is the member's state of mind".
The facts of the case involved an internal election and claims that parties had acted in breach of their duties by voting for certain candidates when there was no rational reason for members to vote against others.