Thinking About Becoming a Trustee?

Becoming a trustee is an important decision in an individual’s life. It is an opportunity for you to be involved in the way services are provided & communities are supported. By joining a board, you will be at the centre of the action - a place to put ideas into action & help others. But trusteeship can also be about your own development as a person, learning new, diverse skills & new ways of working that can help you in others areas of your life.

What is a Trustee & what is a Board?
A trustee is a member of a group of people – the board or governing body – who have ultimate responsibility in a charitable voluntary organisation. They are responsible under the charity’s governing document for controlling the management & administration of that charity (section 97 of the Charities Act 1993). The board of trustees will be the voting members of the top supervisory body of a charity, known as the governing body, which takes decisions, sets direction & ensures that the work of a charity is carried out.

What skills do trustees need?
Charities need people with diverse skills, experiences & backgrounds who can work together & harness each other’s talents. As well as a range of professional skills – legal, financial, management, etc. – boards draw on common sense perspectives & experience of the services the charity is providing. Boards should value people who can ask challenging questions. Charities also need to ensure they represent the community they work in. All trustees should hold basic values including honesty & integrity.

Can anyone become a trustee?
Trustees must be over 18 years of age. For registered charities & companies there are additional restrictions, disqualifying people who have been convicted of certain offences involving dishonesty or deception, undischarged bankrupts & those previously removed or disqualified from being trustees or company directors. Some organisations require trustees to be members or there may be other criteria specified in an organisation’s governing document.

What does it involve to become a Trustee?
Trustees give their time & usually carry out their duties voluntarily & take ultimate responsibility for all the charity does. This does not mean that trustees do all the work – their role varies widely depending on the size & structure of the organisation. Trustees are expected to attend meetings & be available for urgent business between meetings. Trustees may also have to spend time between meetings keeping themselves informed & appropriately involved in the charity’s work. Some trustees may have a particular role in the charity – they may be an honorary officer (chair, secretary, treasurer), a member of a subcommittee or have a particular specialism.

What is a charity?
A charity is an organisation set up exclusively for charitable purposes. Charities benefit others & not those responsible for its running. There are 4 main categories of charitable work:
*relief of poverty
*advancement of education
*advancement of religion &
*other purposes beneficial to the community.

Responsibilities & Liabilities of Trustees
All trustees have a core duty of providing overall direction to the charity & ensuring that its work is within its aims, within the law & properly resourced & managed.

“If trustees act prudently, lawfully & in accordance with their governing document then any liabilities they incur as trustees can be met out of the charity’s resources.”
Responsibilities of Charity Trustees, The Charity Commission

If you have acted reasonably, worked within your governing document & taken appropriate professional advice where you don’t know enough to make a decision or where you are required to by law, then it is unlikely that you would be held personally liable. Having a well-managed organisation complying with legislation & following good practice, with good management & safeguards & an active & effective trustee board are important steps you can take to minimize any risks. As a trustee, you are not personally liable for the wrongful acts of staff or agents, provided you have exercised proper care in their appointment & supervision.

Liability of trustees varies depending on the type of charity they belong to. Unincorporated associations or trusts do not have any independent existence in law. This means that the trustees are jointly & severally liable for any agreements which the organisation has entered into. The most likely scenario is where, due to cuts in funding, an unincorporated charity has insufficient funds to pay off its creditors & the trustees have had to pay off the debts.

A company limited by guarantee exists as a legal entity in its own right. Agreements are taken out in the name of the company rather than the in name of individual trustees. This means trustees do not normally have personal financial liability nor individually liable for negligence.

However, trustees of a charitable company are still personally liable for:

*Breach of their fiduciary & statutory duties as company directors
*Wrongful trading under the Insolvency Act 1986 (continuing to trade without avoiding going into insolvent liquidation – this has never happened)
*Fraudulent trading – where there has been dishonesty in the running of the charity (i.e. incurring a debt when the trustees know there is little prospect of ever repaying it)
*Acting as a company director when disqualified

Trustees of all types of charities can be held personally liable for:

*Acting as a charity trustee when disqualified
*Breach of trust under charity law
*Failure to comply with relevant statutory requirements in areas such as health & safety, trade descriptions & financial services
*Failure to deduct employee’s PAYE


Compiled from the Trustee & Governance Briefing Pack,
National Council of Voluntary Organisations (NCVO)