Trustees of a charity are responsible for ensuring that the charity is well run, solvent, and delivers the charitable outcomes for which the charity was set up.
When appointed all Trustees should be asked to read The Essential Trustee, published by The Charity Commission. (While different charity regulations apply in Scotland and Northern Ireland, the good practice in this document applies across Girlguiding.)
Trustees have three main responsibilities, which are:
- Ensuring that the charity complies with charity law including reporting requirements, and other legal and regulatory requirements.
- Ensuring that the charity follows the rules of its governing document (constitution) and remains true to its charitable purpose.
- Trustees must act with integrity and avoid any conflict of interest, or misuse of the charity’s funds or other assets.
Duty of prudence
- Ensure the charity is solvent and will remain so.
- Ensure that funds and assets are only used in furtherance of the charity’s objects (ie to benefit girls and young women).
- Avoid placing assets or reputation at risk.
- Take care when investing funds.
Duty of care
- Trustees must use reasonable care and skill in their work as Trustees, to ensure that the charity is well run and efficient.
- Seek expert advice where there may be material risk to the charity, or where Trustees may be in breach of their duties.
Trustees may also be personally liable for any debts or losses that the charity faces as a result. This will depend on the circumstances and the type of governing document for the charity. However, personal liability of this kind is rare, and trustees who have followed the requirements will generally be protected.
The Essential Trustee, The Charity Commission.
Who can be a trustee?
Most people over 18 years of age can become Trustees (or 16 if your charity is a company of a charitable incorporated organisation), but a few are not eligible.
You cannot be a Trustee if you:
- have an unspent conviction for an offence involving dishonesty or deception
- are currently declared bankrupt (or subject to bankruptcy restrictions or an interim order)
- have an individual voluntary arrangement (IVA) to pay off debts with creditors
- are disqualified from being a company director
- have previously been removed as a Trustee by us or the High Court due to misconduct or mismanagement
- are disqualified or barred from acting as a trustee of this charity under the Safeguarding Vulnerable Groups Act 2006.
Prior to being appointed as a Trustee, a potential Trustee should be asked to sign a declaration that they are eligible. A template is available on the Charity Commission site. It is also good practice for all Trustees to sign this on an annual basis, and it is suggested that this becomes a regular part of annual procedures, perhaps covering at the meeting which signs off the annual accounts.
Conflict of interest
A conflict of interest is any situation in which a Trustee’s personal interests or loyalties could, or could be seen to prevent them from making a decision only in the best interests of the charity.
Trustees should ensure that they declare any conflict of interest before the start of any meeting, so that the remaining Trustees can decide whether they need to leave the room for the item under discussion, or under what terms they may stay. In this case, they would be expected to abstain from any note. The conflict of interest should be noted in the minutes, along with the action taken.
This includes any paid work being undertaken for the charity by a family member. It is always good practice to get a number of quotes for any work, and it would not be appropriate for a Trustee to be involved in the decision making in this situation.
Trustees cannot themselves benefit personally from being a Trustee – reasonable expenses can be covered, but they should not undertake any paid work at all.