The role of a trustee

The role of a trustee in a charity is an important role carrying significant responsibilities which should not be underestimated.

Charity trustees often act in a voluntary capacity with little or no training on what the job entails. The charity sector relies on charity trustees in order to fulfil the important role that charities have in modern day society.

The collapse of Kids Company has ensured that the management of charities and the role of trustees have been subject to increased media attention, whilst Kids Company itself is the subject of a report by the House of Commons Public Administration and Constitutional Affairs Committee and the subject of a charity commission statutory enquiry.

There has been much written about the role of the trustees and it is helpful to go back to first principles in order to understand what the duties and obligations of a charity trustee are.

The Charity Commission has produced an extensive guide to trustees entitled ‘The essential trustee: What you need to know, what you need to do’. The guidance highlights the six key features of being a trustee.

These are:

  1. Trustees must ensure that everything they do helps to achieve the purpose for which the charity is established. This requires trustees to have an understanding of the charity’s purposes as set out in the governing document, what the charity intends to achieve and how its activities will support its purposes and how this benefits the public. The charity commission has published guidance on public benefit in PB1, PB2 and PB3.
  2. Trustees must comply with the charity’s governing document and the law. This requires a proper understanding of the governing document and the provisions that are set out in it and an understanding of charity law and other laws applicable to the charity. If necessary, the trustees will need to take advice.
  3. Trustees must act in the charity’s best interests. This entails making decisions in the best interests of the charity and ensuring that there is no conflict with any personal interest or any other entity the trustee may be involved with. The trustee may not receive any benefit from the charity unless authorised to do so in its governing document.
  4. Trustees must manage the charity’s resources responsibly and must act in a prudent manner so that the assets of the charity are used solely for fulfilment of the charity’s purposes, risks are not taken and when making investment decisions on behalf of the charity either in relation to funds or land, appropriate advice is taken.
  5. Trustee must act with reasonable care and skill and take advice when necessary. Reasonable in the circumstances depends on any special knowledge or expertise of the trustee and whether the trustee is a professional trustee or paid. Trustees should recognise when they should take specialist advice.
  6. Trustees must ensure the charity is accountable and complies with all statutory accounting and reporting requirements. Trustees need to be aware that the Charity Commission requirements on the production of accounts vary depending on the type of charity and the levels of income and that failure to submit accounts to the charity commission is a criminal offence.

Trustees should be aware that they might be personally liable if they cause loss to their charity. If they have acted honestly and reasonably then they will generally be protected. It is vital that trustees have a full understanding of their obligations and duties as a trustee, read the relevant charity commission guidance and take specialist advice when appropriate.

The Charity Commission’s website contains further information about what it means to be a trustee:
www.gov.uk/government/organisations/charity-commission

If you would like any guidance about being a trustee or managing a charity, please contact:

Victoria Fairley
Partner

T. 020 7227 7329
E. victoria.fairley@rlb-law.com


Disclaimer

This briefing is for guidance purposes only. RadcliffesLeBrasseur accepts no responsibility or liability whatsoever for any action taken or not taken in relation to this note and recommends that appropriate legal advice be taken having regard to a client's own particular circumstances.

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