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Check you're clear on board duties

Originally published: July 2017 | Last reviewed: July 2017

Trustees are responsible for a charity’s management and administration. But what does that mean in practice?

The Charity Commission provides guidance on the six legal duties of a trustee, summarized below. These apply to trustees of any charity in England and Wales, whether registered with the commission or not. (The charity regulators in Scotland and Northern Ireland provide guidance for their respective jurisdictions.)

Note that those considered trustees under charity law may be called otherwise — directors, committee members, governors or something else.

Below are some questions to help guide trustees when checking that they meet each of their legal responsibilities.

1) Ensure your charity is carrying out its purposes for the public benefit

The Charity Commission says that trustees must ensure the charity is carrying out the purposes for which it is set up, and no other purpose. That means you should:

  • Ensure you understand the charity’s purposes as set out in its governing document
  • Plan what your charity will do, and what you want it to achieve
  • Be able to explain how all the charity’s activities are intended to further or support its purposes
  • Understand how the charity benefits the public by carrying out its purposes

Check you’re on track:

  • Can all trustees explain the public benefit of the charity’s work?
  • When did the board last review what the charity is achieving and how effective its activities are?
  • Are the charity’s objects still appropriate, relevant and up to date? (For example, could there be better ways of meeting the need for which the charity was originally set up? Does the charity’s beneficiary group still represent a sufficient section of the public?)
  • Have the staff had the impact of your charity’s work independently verified, measured or audited?

2) Comply with your charity’s governing document and the law

Trustees must:

  • Make sure that the charity complies with its governing document
  • Comply with charity law requirements (including reporting and accounting) and any other laws that apply to your organization

Trustees are expected to take reasonable steps to find out about legal requirements, and seek appropriate professional advice when needed.

Check you’re on track:

  • Does every trustee have an updated copy of the governing document, and consult it regularly?
  • Are you sure you’re complying with accounting and financial reporting requirements?
  • Has the board sought advice on laws that apply to all charities (such as equality, data protection and copyright law) and others that may apply to yours in particular, such as employment law, property law, or working with vulnerable people
  • Does the board include people who can lend their skills in this area (not necessarily legal experts, but those with direct experience of the sector, or of particular issues such as financial management or working with vulnerable people)?

3) Act in your charity’s best interests

The Charity Commission says that trustees must:

  • Do what they (and no one else) decide will best enable the charity to carry out its purposes
  • Make balanced and adequately informed decisions, thinking about the long term as well as the short term
  • Avoid putting themselves in a position where their duty to the charity conflicts with personal interests or loyalty to any other person or body
  • Not receive any benefit from the charity unless it is properly authorized and is clearly in the charity’s interests; this also includes anyone financially connected to the trustee, such as a partner, dependent child or business partner

Acting in the charity’s best interests means doing what will best enable the organization to carry out its purposes, now and in the future. It does not mean serving the charity as an institution in itself, or preserving it for its own sake.

Check you’re on track:

  • Is the board recording how you make significant decisions in case you need to review or explain them in the future?
  • Are trustees critically and objectively reviewing proposals and challenging assumptions in making decisions?
  • Are individual trustees who miss a meeting reading minutes and recording their say on any decisions made?
  • Do all trustees know what process to follow for identifying, declaring and recording conflicts of interest? Is your register of conflicts up to date and reviewed regularly?
  • Do all trustees know about the charity’s policy for reimbursing their expenses (and if relevant, payment of trustees)?

4) Manage your charity’s resources responsibly

Trustees must act responsibly, reasonably and honestly. They must:

  • Make sure the charity’s assets are only used to support or carry out its purposes
  • Avoid exposing the charity’s assets, beneficiaries or reputation to undue risk
  • Not over-commit the charity
  • Take special care when investing or borrowing
  • Comply with any restrictions on spending funds or selling land

Failing to put appropriate procedures and safeguards in place and ensure they are followed makes a charity vulnerable to fraud or theft, or other kinds of abuse.

Check you’re on track:

  • Do you have a risk policy that is regularly reviewed?
  • Do you have a risk register to record any risks identified, their assessment and any actions taken?
  • Are trustees complying with commission guidance on managing charity finances?
  • Are all trustees comfortable with all the charity’s methods for income generation, including any trading subsidiaries, and with the reserves policy?
  • Are trustees informed about what fundraising the charity does (and given the right information on this during their induction), and are they aware of their responsibility to ensure it’s done in an ethical manner?

5) Act with reasonable care and skill

Trustees are responsible for governing a charity and so:

  • Must use reasonable care and skill, making use of their skills and experience and taking appropriate advice when necessary
  • Should give enough time, thought and energy to the role, for example by preparing for, attending and actively participating in all trustees’ meetings

Check you’re on track:

  • Has the board done a skills audit to identify any gaps?
  • Are trustees aware of which situations require them to seek external / expert advice?
  • Are trustees attending meetings as expected (not least to reach your charity's "quorum", meaning the minimum number needed for decisions to be made)?
  • Are trustees appraised annually so they can raise issues with the chair, and the chair with them?
  • Is the board reflecting on its performance and effectiveness as a governing body?

6) Ensure your charity is accountable

Trustees must comply with statutory accounting and reporting requirements.

They should also, says the Charity Commission:

  • Be able to demonstrate that the charity is complying with the law, well-run and effective
  • Ensure appropriate accountability to members (if there are non-trustee members)
  • Ensure accountability within the charity, particularly where responsibility is delegated to staff or volunteers

Check you’re on track:

  • Are all trustees aware of what accounts need to be submitted, and are they prepared to question something they don’t understand?
  • If the charity has members, do you hold an annual AGM to update members on the charity’s activities?
  • Do you have a board representative elected or co-opted from your members?
  • Are delegated tasks clearly defined, for example in staff job descriptions, volunteers’ role descriptions and committees’ terms of reference?

Get support and training

While new trustees should read Charity Commission guidance thoroughly, they aren’t expected to know everything. Charities also have a responsibility to induct new trustees thoroughly — and trustees should not be afraid to keep asking questions, or ask to see or have explained to them important documents.

Several organizations provide resources and training for U.K. trustees including Small Charities Coalition, the FSI, NCVO, and the Association of Chairs.

This article was produced with input from Leon Ward, Deputy Chair of Brook, the young persons sexual health charity; governance expert for the Key for School Governors; and author of the Young Trustees Guide. Leon is also a former trustee of international children’s charity Plan U.K.

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Disclaimer

MissionBox editorial content is offered as guidance only, and is not meant, nor should it be construed as, a replacement for certified, professional expertise.

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References

GOV.UK / Charity Commission for England and Wales: The essential trustee: what you need to know, what you need to do (CC3) (2015)

Knowhow Nonprofit: Legal duties of trustees (2017)

The Guardian: What every new trustee of a charity must know,by Ian Joseph (2011)

Mango: Risk register

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