What are the legal responsibilities for trustees?
The persons who have the general control and management of the administration of a charity will be its trustees.
Trustees have duties to their organisations that are similar to company directors, but also are required to comply with charity law.
They must:
- Act collectively exercising reasonable care and skill.
- Safeguard the assets of the organisation.
- Act in the best interests of the organisation, avoiding personal conflicts.
- Keep information at the Charity Commission up to date.
Following the very public insolvency of the charity known as Kids Company, it is clear that the courts will continue to recognise the public service that charity trustees provide, and will take a benevolent approach in circumstances where no dishonesty or wilful misconduct is alleged.
Since then, issues at the Captain Tom Foundation, Barnabas Aid, Fashion For Relief and Sentebale (amongst others) have also made national news.
The Charity Commission expects trustees to take their responsibilities seriously, but acknowledges that honest mistakes can happen. Public rebukes to charities or individual trustees can be issued by the Commission if it considers there has been a breach of trust or duty, or other misconduct or mismanagement. That includes maladministration that results in significant charitable resources being misused or beneficiaries being put at risk. The importance of a proper system of record keeping by both the charity and the trustees should not be underestimated to show that trustees did their best to comply with their duties, acting honestly and reasonably.
The Charity Commission sets out six key obligations for trustees here
- Ensure your charity is carrying out its purposes for the public benefit
- Comply with your charity’s governing document and the law
- Act in your charity’s best interests
- Ensure your charity is accountable
- Manage your charity’s resources responsibly
- Act with reasonable care and skill
All organisations may campaign, but charities need to make sure they are not involved in party political activity. The Commission published a short guide in autumn 2022 here
