L11.0 Trustee Duties L11.0 Trustee Duties
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Note: MUST* and MUST NOT* (with asterisk) denotes legal requirement
MUST and MUST NOT (without asterisk) denotes requirement of the Code of Fundraising Practice
This section applies to fundraising organisations which are charities.
L11.2 Key Requirements
The overriding duty of all charity trustees is to advance the purposes of their charity. Those occupying equivalent positions in non-charitable voluntary organisations will have similar duties. In advancing their charities’ purposes, trustees have several basic responsibilities:
a) Trustees are responsible for the proper administration of their charity.
Trustees MUST* ensure that the charity’s assets and resources are used only for the purposes of the charity and that the charity is run in accordance with its constitution, charity law and all other applicable laws and regulations. Examples of legal requirements placed on trustees in the field of fundraising include the need for appropriate agreements with commercial participators and professional fundraisers, and the need for appropriate licences when conducting street or house to house collections.
b) Trustees have ultimate responsibility for everything the charity does.
The trustees are responsible for the vision, mission and management of the charity. While they may delegate in some circumstances, it is the trustees who are accountable if things go wrong.
c) Trustees have to act reasonably and prudently in all matters relating to their charity.
The law imposes a duty of care on the trustees of charities, which is sometimes expressed as a duty “to exercise such care and skill as is reasonable in the circumstances”. The duty will be greater if a trustee has, or claims to have, any special knowledge or experience, or if their business or profession means that they can reasonably be expected to have special knowledge or experience. If trustees are not experts in certain matters, they will be expected to take appropriate advice.
d) Trustees MUST* safeguard and protect the assets of the charity.
As well as obvious assets such as investments, cash and land, a charity’s assets include its intellectual property, staff and reputation. So where a charity uses volunteers or paid fundraisers to fundraise, the trustees MUST* make sure that the charity receives all the funds to which it is entitled. Trustees MUST* also consider the impact of controversial fundraising campaigns on the charity’s reputation in the long term.
e) Trustees have a duty to act collectively.
Decisions and responsibilities are shared, so all trustees should take an active role. Trustees can act by majority decision, unless the constitution says otherwise, and some trustees, such as the Chair and the Treasurer, will have particular roles, but all the trustees are collectively responsible for decisions made by the trustees.
f) Trustees MUST* act in the best interests of their charity.
The interests of the charity are paramount. Trustees should not allow their personal interests or views to override this: they MUST* exercise independent judgment.
g) Trustees MUST* avoid any conflict between their personal interests and those of the charity.
The main implication of this is that the scope for trustees to benefit personally from their charity is very limited. Trustees MUST* deal appropriately with any conflicts between their own personal interests and those of the charity. They MUST* also be alert to possible conflicts between duties they may owe to other organisations and the duties they have to the charity.
Further information can be found on the Charity Commission website in guidance document CC3: The Essential Trustee.
h) Trustees in Scotland
Charity trustees are obliged to comply with the Charities and Trustee Investment (Scotland) Act 2005 and any regulations made under it or affecting charities. In particular, charity trustees MUST* adhere to their charity’s constitution and comply with their duties under Section 66 of the 2005 Act when exercising functions in their capacity as a charity trustee. Crucially, they MUST* act in the interests of the charity, seek in good faith to ensure that the charity acts in a manner which is consistent with its purposes, and act with the care and diligence that it is reasonable to expect of a person who is managing the affairs of another person.
i) Trustees in Northern Ireland
The duties and responsibilities of trustees are contained in the Trustee Act (Northern Ireland) 1958 and more recently the Trustee Act (Northern Ireland) 2001 and for an outline of the specific requirements of Northern Ireland see “The Guide for Trustees” which was drawn up by the Department for Social Development. These are very similar to those set out in the England and Wales ‘key requirements’.