Can board members be paid?
Any board member may seek reimbursement for reasonable expenses, and most may benefit from any indemnity insurance policy paid for by the organisation.
Any non-charity can also pay its board members if (1) it is in the best interests of the organisation to do so, (2) all conflicts of interest are declared and properly managed and (3) there are no restrictions in the organisation’s constitution. There are additional limits to payments for CIC board members.
The rules are different for charities, because a trustee has a duty of undivided loyalty to their charity, and must not profit from their position. Nor may a trustee create a conflict of interest. For those reasons, it is rare for a charity to pay a trustee for their trusteeship, and a trustee can never be paid for providing auditing services for their charity. Despite their being an argument that a ban on payments to trustees may prevent volunteers with limited finances from volunteering to be on a charity’s board, the Commission’s view remains that it is in the sector’s interests to discourage paid trusteeships. The Commission’s permission must be given for these sorts of payments (either by seeking consent to include in the constitution a power to pay a trustee for carrying out trustee duties or by seeking permission for ad hoc permission). Guidance is published here
It may be possible for trustees to be paid for goods and services they supply to their charity. The same rules apply whether that payment is in cash or in kind. There is a statutory power that authorises these sorts of payments in some circumstances if all of the conditions are met. Please see guidance here
It may be possible for a trustee to be a paid employee of a charity for other roles, provided that the constitution has an express power or the Commission’s consent is obtained. It may also be possible for a minority of trustees to be paid (on a one off or occasional freelance basis) for services provided to their charity.
Last, it may be possible to agree to give a board member a gift, perhaps in recognition of past service, if the board decides it has a moral obligation to do so or if the board decides it is in the organisation’s best interests to make a payment.
The Charity Commission offers full advice re trustee expenses and payments.
