Contributed by Wright Hassall Solicitors
There are many reasons why you might like to become a trustee of a charity: positive support for a good cause, putting a particular skill set or experience to good use, or remaining active in the community. Whatever your motivation, you need to be aware that being a trustee is a significant legal responsibility, shared with your fellow trustees, and you must understand your obligations before volunteering. The most important document you need as a trustee is the charity’s governing document which should contain all the information you need to understand how the charity is run and what it has been set up to do. For detailed information please see our full guide on charity trustees’ responsibilities.
The post of trustee is almost always voluntary (with reimbursement of reasonable expenses) and you need enough spare time to undertake your duties properly, not least as trustees are liable for the decisions they make. You can find a more detailed guide on the responsibilities and duties of charity trustees in Charity Commission’s ‘The Essential Trustee’ – VoluntaryNews update.
Getting to grips with the charity’s governing document
Every trustee must have a copy of the charity’s governing document which details what the charity has been set up to do, its legal structure, how it should operate and how its income should be distributed.
- You need to understand the charity’s objects (its charitable purposes) and that it passes the public benefit test. This means that its activities must be for the public’s benefit – or a sufficient section of the public.
- You need to make sure that suitable trustees are appointed, for instance you cannot appoint someone disqualified under the Charities Act. Consider whether or not an individual’s experience and skill set would be a valuable addition to the governing body.
- Make sure you understand which legislation your charity needs to comply with, such as employment legislation.
- Review the governing document regularly to make sure it accurately reflects what the charity does. If it needs updating, seek legal advice.
Acting responsibly, reasonably and honestly
- You must always act in the best interests of the charity and not those of the individuals involved.
- You must ensure that the charity’s resources are being used responsibly and that it is financially well-managed.
- You need to understand any risks that the charity might face and have a policy in place to evaluate and mitigate those risks.
- You must act in good faith and with ‘reasonable care’ which will depend, to an extent, on your skills and experience.
Exercise financial prudence
- You need to be sure that your charity is complying with the relevant accounting requirements and is able to produce the most recent set of accounts on request.
- You must understand that trustees can be held liable for any financial loss caused by them acting dishonestly or irresponsibly.
Being a trustee should be a rewarding experience. However, as trustees are ultimately responsible for the efficient management of the charity and its capability to deliver its objectives it is crucial that they understand exactly what that responsibility entails. The starting point for any trustee is to familiarise themselves with the governing document which sets out the charity’s legal structure, its objectives, who (or what) it is intended to help and how it meets the public benefit test. Beyond that, trustees must act in the best interests of the charity, applying common sense and good judgment.