Duties of charity trustees

19 September 2018

Charity trustees play an essential role in the success of charities and are responsible for the general control and management of the administration of the charity. Many charity trustees are also company directors with an extra set of director duties codified in the Companies Act 2006. It is important that each trustee understands their legal duties as they are individually and collectively responsible for everything that the charity does.

Duties of charity trustees

The duties of charity trustees are as follows: -

  1. Stewardship - to safeguard and protect the charity’s assets
  2. Act collectively with the other trustees
  3. Always act in the best interests of the charity
  4. Responsible for the proper administration of the charity
  5. Avoid conflicts of interest
  6. Responsible for everything the charity does
  7. Act reasonably and prudently in all matters

Golden Rules for charity trustees to adhere to: -

  1. Understand your constitution (whether it is a set of rules, articles of association) e.g. what are your charitable purposes, are you working to promote only these purposes?
  2. Read the Charity Commission for NI’s guidance for trustees entitled “Running your Charity” and the “Public Benefit Guidance” which is mandatory.
  3. Report to the Commission (the regulator). This includes submitting the Annual Monitoring Return, Trustees’ Annual Report and the annual accounts.
  4. Do you need a consent from the Commission e.g. charitable companies require certain consents from the Commission for regulated amendments to the articles of association. Regulated amendments mean changes to the charitable purposes, dissolution clause or member or trustee benefits.
  5. Can the Commission authorise something that you want to do? For example the Commission can consent to an ex gratia payment being made to an outgoing CEO.
  6. Be an active trustee- read your board papers, attend meetings, contribute your expertise and challenge constructively.
  7. Manage conflicts of interest.
  8. Understand the accounts – do you fully understand the financial position of the charity?
  9. Board renewal – is it time to recruit and succession plan for the board? Are there any skills lacking in the board?
  10. Good governance- this is not just record keeping and ensuring the charity is up to date with its relevant policies, rules and procedures (e.g. GDPR). Charity trustees must recognise that this is an active and ongoing responsibility e.g. when did you last update your constitution? Are you still acting within your charitable purposes?

Record keeping is essential as a Trustee. This is the proof that you acted within your powers and with due diligence. It is also important that charity trustees seek professional advice when appropriate.

Serious incident reporting is another important responsibility. Any incident should be reported to the Commission promptly. 

Charity trustees should also be mindful that any concern raised or serious incident report can result in a statutory inquiry. Concerns are often raised by members of the public or disgruntled trustees. If the Commission identify any misconduct or mismanagement, it has the power to investigate and open a statutory inquiry. The reporting of these inquiries are in the public domain and individual trustees can be suspended and even removed.

The risk of personal liability needs to be understood by trustees. In order to mitigate any personal risk, trustees should act in accordance with their constitution to promote the charitable purposes, acting diligently. Any breach of trust or duty could result in personal liability to a trustee and he/she will have to make good that loss to the charity.

Catherine Cooney, Partner with Worthingtons Solicitors advising charities and businesses on a daily basis. Regularly advising on charity trustee duties and liability, good governance, mergers and collaborations, serious incidents, concerns and insolvency. Catherine has been ranked in Chambers for the last two years in Charity Law in Northern Ireland and delivers board training to charity trustees and directors. For any charity law advice please telephone 02890279500 or email catherine@worthingtonslaw.co.uk


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