I've been asked to become a trustee. What are my responsibilities?
I've been asked to become a trustee. What are my responsibilities?
"We are only the trustees for those who come after us" - William Morris
This is a question I’ve been asked a few times; most recently by my friend, Sally, who had been asked to become a trustee for a local arts organisation.
I realised that although most people know what a trustee is, and a bit about what they do, there is less of an understanding about the responsibilities of trustees. There’s also a fear around liability; in other words, if something goes wrong, could I be blamed?
Here, I’ll try to answer these questions, and talk a little about the role of a trustee, plus signpost you to some helpful resources if you’d like to learn even more.
What is a trustee?
“Trustees have independent control over, and legal responsibility for, a charity’s management and administration”
– Charity Commission for England & Wales.
In other words, trustees decide how a charity is run and lead it to ensure everything is carried out correctly.
Trustees operate within two sets of formal rules:
The governing document - rules, constitution, trust deed, memorandum and articles of association.
The law - the Trustee Act 2000 (for unincorporated charities), Insolvency Acts, Companies Acts, and Charity Acts.
Who can be a trustee?
Trustees of a Charitable Company or Charitable Incorporated Organisation (CIO) must be at least 16 years old and for any other charities, trustees must be at least 18.
Reasons for being disqualified to become/continue acting as a trustee are:
being bankrupt (undischarged) or having an individual voluntary arrangement (IVA)
having an unspent conviction for certain offences (including any that involve dishonesty or deception)
being on the sex offenders’ register
How are trustees recruited/elected?
The way that trustees are appointed depends on the instructions set out in the charity’s governing documents. This will set out:
who appoints new trustees
when, and how, new trustees are appointed
how long appointments last and whether a trustee can be re-appointed
how trustees can resign or be removed
Charities will advertise for trustees, often specifying particular skills and expertise they are looking for, or key roles on the board they are looking to fill.
What are the duties of a trustee?
One of the biggest questions people have before committing to the role is, ‘What are my responsibilities as a trustee?’
Trustees have six main duties (taken from the Charity Commission website.)
1. Ensure your charity is carrying out its purposes for the public benefit
You and your co-trustees must make sure that the charity is carrying out the purposes for which it is set up, and no other purpose. This 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 of the charity’s activities are intended to further or support its purposes
understand how the charity benefits the public by carrying out its purposes
2. Comply with your charity’s governing document and the law
You and your co-trustees must:
make sure that the charity complies with its governing document
comply with charity law requirements and other laws that apply to your charity
3. Act in your charity’s best interests
You must:
do what you and your co-trustees (and no one else) decide will best enable the charity to carry out its purposes
with your co-trustees, make balanced and adequately informed decisions, thinking about the long term as well as the short term
avoid putting yourself in a position where your duty to your charity conflicts with your personal interests or loyalty to any other person or body
not receive any benefit from the charity unless it’s properly authorised and is clearly in the charity’s interests; this also includes anyone who is financially connected to you, such as a partner, dependent child or business partner
4. Manage your charity’s resources responsibly
You must act responsibly, reasonably and honestly. This is sometimes called the duty of prudence. Prudence is about exercising sound judgement. You and your co-trustees must:
make sure the charity’s assets are only used to support or carry out its purposes
not take inappropriate risks with the charity’s assets or reputation
not over-commit the charity
take special care when investing or borrowing
comply with any restrictions on spending funds
5. Act with reasonable care and skill
As someone responsible for governing a charity, you:
must use reasonable care and skill, making use of your skills and experience and taking appropriate advice when necessary
should give enough time, thought and energy to your role, for example by preparing for, attending and actively participating in all trustees’ meetings
6. Ensure your charity is accountable
You and your co-trustees must comply with statutory accounting and reporting requirements. You should also:
be able to demonstrate that your charity is complying with the law, well run and effective
ensure appropriate accountability to members, if your charity has a membership separate from the trustees
ensure accountability within the charity, particularly where you delegate responsibility for particular tasks or decisions to staff or volunteers
Do all trustees have the same role?
All trustees have the same role and duties. These duties should be set out in your organisation's constitution or governing document. All trustees are jointly and equally responsible for the charity. However, there are often additional responsibilities for some trustees as follows:
The treasurer ensures that the charity is keeping accurate accounts and oversees financial performance.
The chair usually plans and runs trustee meetings, ensures trustees are undertaking their responsibilities, and is the line manager of the charity’s Chief Executive (CEO).
What skills does a trustee need to have?
All trustees will bring their unique combination of skills and experience to the role; it’s likely they have been recruited on the basis of their expertise and willingness to share that to advance the objectives of the charity.
These skills could range from legal, financial, management, fundraising & safeguarding to specific knowledge or qualifications in the area the charity works in, such as education, social welfare, or healthcare.
Overall, it’s important that trustees have both some knowledge and a keen interest in the charity’s cause, and in the people or communities it serves.
As a trustee, can I be held liable?
According to the Charity Commission: “It’s extremely rare, but not impossible, for charity trustees to be held personally liable.”
However, trustees could potentially be held liable for:
financial loss they cause or help to cause
a claim against the charity such as:
- breaches of an employee’s terms, conditions or rights
- failing to pay for goods or services, or to fulfil the terms of a contract
- a member of the public being injured on the charity’s premises
- liability to any staff pension scheme
To reduce the risk of becoming personally liable, it is important to:
ensure trustees understand their responsibilities
hold regular trustee meetings and keep proper records of decisions made and the reasons for those decisions
ensure you prevent conflicts of interest from affecting decisions
ensure any transactions with and benefits to trustees or connected persons are properly authorised
take appropriate advice from a suitably qualified person when you need to
if you delegate any powers, give clear written instructions and make sure the instructions are being followed
ensure the charity has effective management and financial controls
If your charity is unincorporated and employs staff or enters into other contracts, the trustees should seriously consider changing the charity into an incorporated form.
See my training here for more on running a not-for-profit organisation.
Does a trustee get paid?
A trustee is a voluntary role, so no, they do not get paid. However, most charities will allow trustees to be reimbursed for travel and other out-of-pocket expenses.
What are the benefits of becoming a trustee?
Most people will become trustees of a charity that they care greatly about. The charity might be working to target a specific issue such as homelessness, unemployment, poverty. Being a trustee can make you feel like you’re part of the solution; fighting for justice.
For many it can be a rewarding next step in their career, whether early on to gain some diverse experience, or in retirement as a way to continue using those much-needed skills they have acquired.
It’s worth noting that there is an element of time commitment that must be taken into account before making the commitment. The meetings could be monthly or quarterly, but it’s likely there will be other actions and tasks delegated to you in between those meetings. Make sure you have the time and energy to dedicate to the role, because even though it is unpaid, it is a privilege and a legal responsibility once you are appointed.
Useful resources:
National Council for Voluntary Organisations
The Essential Trustee – guide from the Charity Commission for England & Wales
You might find the following free online courses useful:
Thanks for reading, Rachel x