What to Do When Trustees Stop Holding Meetings or Performing Their Duties - A Comprehensive Guide for Non-Profits in 2026

Introduction: The Foundation of Trust in Non-Profit Organisations

In Nigeria, many organisations, especially non-profits, religious bodies, community associations, and charitable institutions, are established as Incorporated Trustees under the Corporate Affairs Commission (CAC). At the heart of these organisations are the Trustees – individuals entrusted with the immense responsibility of managing the organisation's assets, upholding its mission, and ensuring its legal compliance. They are the custodians of the organisation's vision and public trust.

However, what happens when these vital pillars become inactive? What if Trustees stop holding meetings, fail to perform their statutory duties, or even become obstacles to the organisation's progress? This is a critical challenge that can paralyse an organisation, jeopardise its assets, and ultimately undermine its very purpose.

At BusinessHelp CONSULT, we understand the complexities involved in running an Incorporated Trustee body. This comprehensive guide is designed to equip you with the knowledge and practical steps needed to address situations where Trustees become derelict in their duties. We will break down the legal framework, practical remedies, and preventative measures, all in clear, accessible Nigerian English.

Understanding the Role and Responsibilities of Trustees

Before we delve into solutions, it's crucial to properly understand the fundamental role and responsibilities of Trustees. This context will help you identify when a breach of duty has occurred.

Who are Trustees?

Under the Companies and Allied Matters Act (CAMA) 2020, Part F, Incorporated Trustees are persons appointed by a community, association, or body of persons to hold property in trust for the benefit of the organisation. They are essentially the legal owners of the organisation's assets, holding them not for personal gain, but for the collective good and advancement of the organisation’s objectives.

Key Duties and Responsibilities

Trustees have a wide range of duties, primarily fiduciary in nature, meaning they must act in utmost good faith and in the best interest of the organisation. These include:

• Fiduciary Duties: This is the most important. Trustees must act honestly, in good faith, and for the benefit of the organisation, avoiding conflicts of interest and personal gain.
• Duty of Care and Skill: Trustees are expected to exercise reasonable care and skill in managing the organisation's affairs, as would a prudent person managing their own business.
• Duty to Act in Accordance with Governing Documents: They must adhere strictly to the provisions of the organisation's Constitution, By-laws, and the CAMA 2020.
• Duty to Hold Meetings: Regular meetings are essential for decision-making, oversight, and strategic planning. The frequency is usually stipulated in the constitution.
• Financial Stewardship: Ensuring proper management of funds, accurate financial records, annual audits, and transparent reporting.
• Compliance with Laws: Ensuring the organisation complies with all relevant laws and regulations, including filing annual returns with the CAC.
• Advancement of Mission: Working actively to achieve the stated objectives and mission of the organisation.
• Safeguarding Assets: Protecting the organisation's property, both movable and immovable.

Legal Framework in Nigeria (CAMA 2020, Part F)

The primary law governing Incorporated Trustees in Nigeria is the Companies and Allied Matters Act (CAMA) 2020, particularly Part F (Sections 823-850). This Act outlines the process of incorporation, the powers and duties of Trustees, and procedures for their removal or replacement. Understanding these sections is vital when dealing with inactive Trustees.

Identifying the Problem: Signs of Trustee Inactivity or Dereliction

Recognising the problem early is the first step towards a solution. Trustee inactivity can manifest in several ways:

What Constitutes “Stopping Meetings”?

This is often the most visible sign of inactivity. It can include:

• Failure to convene scheduled meetings as stipulated in the constitution (e.g., quarterly, annually).
• Inability to form a quorum for meetings due to consistent absenteeism.
• Lack of proper notice for meetings, preventing attendance.
• Holding meetings but failing to take meaningful decisions or document proceedings (minutes).
• General disinterest in participating in discussions or strategic planning.

What Constitutes “Not Performing Duties”?

This goes beyond just meetings and includes a broader failure to uphold responsibilities:

• Financial Mismanagement: Lack of oversight on funds, failure to approve budgets, or not ensuring proper accounting and audits.
• Failure to File Annual Returns: This is a critical statutory requirement. Non-filing can lead to penalties, de-listing by CAC, and inability to conduct official business.
• Neglecting the Organisation’s Mission: Not actively working towards the objectives for which the organisation was established.
• Lack of Strategic Direction: Failure to provide leadership or guidance, leaving the organisation adrift.
• Failure to Protect Assets: Allowing property to deteriorate, or not taking steps to secure the organisation’s resources.
• Ignoring Legal Advice: Disregarding professional advice crucial for the organisation’s compliance or growth.

Potential Impact of Inactive Trustees

The consequences of inactive or derelict Trustees can be severe:

• Legal Issues: Penalties from CAC for non-compliance, potential lawsuits, or even de-registration.
• Financial Damage: Misappropriation of funds, loss of assets, inability to access grants or funding due to poor governance.
• Reputational Harm: Loss of public trust, difficulty attracting volunteers or donors.
• Operational Stagnation: Inability to make crucial decisions, hindering growth and project implementation.
• Mission Drift: The organisation may lose its focus and deviate from its founding objectives.

Initial Steps and Internal Resolution (Before Legal Action)

Before considering formal legal action, it is always advisable to attempt internal resolution. This approach is often quicker, less expensive, and preserves relationships where possible.

1. Reviewing Governing Documents

The first and most critical step is to thoroughly review your organisation's Constitution (or Articles of Association for Incorporated Trustees). This document is your primary guide. Look for provisions related to:

• Frequency of Trustee meetings.
• Quorum requirements for meetings.
• Procedures for calling special meetings.
• Duties and responsibilities of Trustees.
• Grounds and procedures for the removal of Trustees.
• Dispute resolution mechanisms.

Understanding these clauses will inform your subsequent actions and ensure they are compliant with your own rules.

2. Communication and Dialogue

Sometimes, inactivity stems from misunderstandings, busy schedules, or lack of clear communication. Initiate formal and informal communication:

1. Informal Outreach: Reach out to individual Trustees to understand their challenges or reasons for inactivity.
2. Formal Written Communication: Send a formal letter (signed by active Trustees or the organisation's secretary) to the inactive Trustees, reminding them of their duties, the importance of meetings, and the consequences of their inaction. Request their commitment or resignation.
3. Request for a Meeting: Specifically request a meeting to discuss the issues, proposing a clear agenda.

Ensure all communications are documented, including dates, methods of delivery, and responses received.

3. Calling a Special General Meeting (SGM)

If your constitution allows, and there are other active members or Trustees, you might be able to call a Special General Meeting (SGM) of the organisation's members or the Board of Trustees. The purpose of this meeting would be to:

• Discuss the issue of inactive Trustees.
• Pass resolutions urging compliance.
• If the constitution permits, pass a resolution to remove the inactive Trustees (though this often requires court sanction for Incorporated Trustees).

Ensure proper notice is given to all eligible attendees, and minutes are accurately recorded.

4. Mediation and Conflict Resolution

For organisations with internal dispute resolution clauses, or where personal conflicts are contributing to the inactivity, consider engaging a neutral third-party mediator. A mediator can help facilitate discussions and find common ground or agreeable solutions without resorting to legal battles.

5. Documenting Everything

Throughout this internal process, meticulous record-keeping is paramount. Keep copies of:

• All correspondences (letters, emails, meeting invitations).
• Meeting minutes, especially those where inactivity was discussed.
• Evidence of non-performance (e.g., unfiled annual returns, neglected projects).

These documents will be crucial evidence if you eventually need to pursue formal legal or regulatory action.

Formal Procedures for Addressing Trustee Inactivity/Dereliction (CAC & Legal Avenues)

If internal efforts fail, or the situation is dire, you must turn to the Corporate Affairs Commission (CAC) and potentially the courts.

Understanding the Corporate Affairs Commission (CAC)'s Role

The CAC is the regulatory body for Incorporated Trustees in Nigeria. It has oversight functions and powers to intervene in cases of misconduct or mismanagement. Under CAMA 2020, the CAC has significant powers regarding Trustees.

Steps for Reporting to CAC

Section 839 of CAMA 2020 empowers the CAC to suspend or remove Trustees and appoint new ones, especially in cases of misconduct, mismanagement, or public interest. Here’s how to initiate this process:

1. Gather Comprehensive Evidence: Collate all your documented evidence of trustee inactivity, failure to hold meetings, non-performance of duties, and any attempts at internal resolution. This includes letters, minutes, financial reports, and proof of non-compliance (e.g., non-filing of annual returns).
2. Draft a Formal Complaint Letter: Write a detailed petition to the Registrar-General of the Corporate Affairs Commission. The letter should clearly state:
   • The name and registration number of the Incorporated Trustee.
   • The names of the inactive/derelict Trustees.
   • A chronological account of their failures and breaches of duty, supported by evidence.
   • The negative impact on the organisation.
   • The specific relief sought (e.g., investigation, suspension, removal of Trustees, appointment of new ones).
3. Submit the Complaint: File the petition with the CAC. It is advisable to engage a legal professional or a corporate consultant like BusinessHelp CONSULT to ensure the complaint is properly drafted and submitted.
4. CAC’s Investigation Process: Upon receiving a valid complaint, the CAC may:
   • Request further information or documents.
   • Invite the accused Trustees for questioning.
   • Conduct its own investigation into the affairs of the organisation.
   • If satisfied that there is a case of misconduct or mismanagement, the CAC can exercise its powers under Section 839.
5. CAC’s Decision: The CAC can issue directives, suspend Trustees, or even apply to the Federal High Court for an order to remove the Trustees and appoint new ones, or to vary the trusts.

Legal Remedies and Court Intervention

While the CAC has significant powers, in some complex or highly contentious cases, direct court intervention may be necessary or initiated by the CAC itself.

Applying to the Federal High Court (Under CAMA 2020, Section 839):

Any two or more members of an Incorporated Trustee, or the CAC, can apply to the Federal High Court for orders concerning the Trustees. This application can be made on several grounds, including:

• Misconduct or Mismanagement: Where Trustees have acted improperly or mismanaged the organisation’s affairs.
• Incapacity: If a Trustee becomes physically or mentally incapable of performing their duties.
• Public Interest: Where the court believes it is in the public interest to remove or replace Trustees.
• Failure to Perform Duties: A clear and persistent failure to carry out their responsibilities, including holding meetings.

What the Court Can Do:

Upon a successful application, the Federal High Court can make various orders, such as:

• Removing any Trustee.
• Appointing new Trustees.
• Varying the trusts or the provisions of the constitution.
• Making orders for the administration of the organisation.
• Directing how the organisation's property should be applied.

The Process of Removing Trustees (Detailed Steps)

Whether through CAC intervention or direct court application, the removal of Trustees is a serious matter. The general steps involve:

1. Identification of Grounds: Clearly establish the legal grounds for removal (e.g., persistent failure to hold meetings, financial mismanagement, breach of fiduciary duty).
2. Gathering Evidence: Collect all supporting documents, communications, and records.
3. Formal Complaint/Application: File a detailed petition with the CAC or an originating summons/motion with the Federal High Court.
4. Notification to Trustees: The inactive Trustees will be formally notified of the complaint/application and given an opportunity to respond and defend themselves.
5. Investigation/Hearing: The CAC will investigate, or the court will hear arguments from all parties.
6. Decision/Order: The CAC will make a decision, or the court will issue an order for the removal of the Trustees.
7. Compliance with Order: The organisation must then ensure the order is complied with, including updating records at the CAC.

Appointing New Trustees

Once inactive or removed Trustees are out of the picture, the process of appointing new, active Trustees is crucial. This can be done:

• According to the provisions of your organisation's constitution.
• As directed by the CAC.
• As ordered by the Federal High Court.

The appointment of new Trustees must also be formally registered with the CAC by filing the necessary forms and resolutions.

Comparison of Actions for Addressing Inactive Trustees

Here’s a table summarising the different approaches, their pros, cons, and when to consider each:

Preventing Future Issues: Best Practices for Trustee Management

Prevention is always better than cure. Establishing robust governance practices can significantly reduce the likelihood of trustee inactivity or dereliction.

1. Clear and Comprehensive Governance Documents

Ensure your organisation's Constitution and By-laws are clear, unambiguous, and cover all aspects of trustee duties, meeting procedures, and removal processes. Regularly review and update these documents to remain compliant with CAMA 2020.

2. Robust Trustee Selection Process

Be deliberate in selecting Trustees. Look for individuals who are not only passionate about your mission but also possess:

• A clear understanding of fiduciary duties.
• Time availability and willingness to commit.
• Relevant skills and experience.
• A strong sense of integrity and accountability.

Conduct interviews and background checks.

3. Regular Training and Orientation

Provide new Trustees with thorough orientation, explaining their legal and ethical responsibilities, the organisation's mission, and its operational procedures. Ongoing training can keep all Trustees updated on governance best practices and legal requirements.

4. Defined Meeting Schedules and Agendas

Establish a clear annual meeting schedule and stick to it. Circulate meeting agendas and relevant documents well in advance to allow Trustees to prepare. Ensure proper minutes are taken and circulated promptly.

5. Effective Record-Keeping

Maintain accurate and accessible records of all Trustee meetings, decisions, financial transactions, and statutory filings. Good record-keeping is vital for transparency and accountability.

6. Regular Performance Reviews

Consider implementing a system for periodic, informal performance reviews for Trustees. This can help identify issues early and provide constructive feedback, fostering a culture of accountability.

7. Succession Planning

Have a plan for replacing Trustees who resign, retire, or become inactive. This ensures continuity and avoids power vacuums that can lead to operational paralysis.

Conclusion

The active and diligent performance of Trustees is fundamental to the success and sustainability of any Incorporated Trustee organisation in Nigeria. When Trustees stop holding meetings or performing their duties, it poses a serious threat that requires decisive action.

By understanding the legal framework, employing internal resolution strategies, and knowing when to escalate to the Corporate Affairs Commission or the courts, organisations can effectively address these challenges. More importantly, by implementing robust governance practices, you can prevent such issues from arising in the first place, ensuring your organisation remains focused on its mission and maintains public trust.

Navigating these waters can be complex, and seeking professional guidance is often advisable. At BusinessHelp CONSULT, we are here to provide expert advice and support to ensure your organisation's governance is sound and compliant.