Fit and proper person test

The fit-and-proper-person test or director's test is a test aiming to prevent corrupt or untrustworthy businessmen from serving on the board of certain organizations. First introduced in 2004 for owners and directors of major British football clubs, since November 2014 also applies to the National Health Service in England for board members of NHS Trusts under the Health and Social Care Act 2008 (Regulated Activities) Regulations 2014.

Directors of NHS Trusts can be deemed unfit if they have been involved in “serious misconduct or mismanagement”. The test is supervised by the Care Quality Commission but decisions are made by individual trusts.

A Trust must be satisfied that its directors are:

A trust must not “appoint or have in place” a director who has been responsible for, privy to, contributed to or facilitated any serious misconduct or mismanagement (whether unlawful or not) in the course of carrying on a regulated activity.

The CQC received referrals from campaigners and whistleblowers in January 2015 which alleged that more than 20 current and former NHS chief executives, medical directors and senior board level executives were unfit for their roles.

The test, introduced in 2004, is mandated by the Premier League, the Football League, the Football Conference and the Scottish Premier League. Anybody who takes over a club, runs one, or owns over 30% of its shares must be assessed. The first director known to have failed the test was Dennis Coleman, director of Rotherham United when they went into administration in 2006 and 2008. He claimed:

"I came in and in effect saved the club. It is totally unfair for me to be disqualified."

In November 2009, Stephen Vaughan, then owner of Chester City, became the first owner to fail the test, after he was legally disqualified from being a director of any company. This was a result of VAT fraud as owner of Widnes Vikings rugby club. He transferred control of Chester to his son, Stephen Vaughan, Jr.

...
Wikipedia