Trustees – the latest update on rules, roles and responsibilities

Becoming the trustee of a charity or organisation can be a very rewarding experience, but it is not a decision to be taken lightly.

The Charity Commission for England and Wales has called on charities to update their organisation’s details before submitting an annual return.

It comes after the regulator announced changes to the public register of trustees, which will ban trustees from using a ‘display name’.

From 1 April 2020, all charities trustees will instead have their full legal names published on the register, which can be viewed by members of the public.

It is believed that the change will help promote the “serious” nature and responsibility of being a trustee, as well as increase transparency and accountability to the public.

In light of this upcoming change, the Charity Commission has now asked all charity trustees to update their details, ensuring any existing information is up to date and all new trustees are added accordingly. This includes their home address, email address and telephone number, although these details will not be published on the register.

Charities also have a duty to ensure that each named person is not disqualified from acting as a trustee.

“Trustees of all charities have a legal obligation to keep the details on the charity register accurate and up to date. This helps maintain public trust and confidence in the charity sector and enables us to contact you with important regulatory information,” said the Charity Commission.

And finally, charities must now provide details of all bank and building society accounts in operation.

Commenting on this change, the regulator said: “Trustees have a duty to act responsibly, reasonably and honestly and protect charity funds and assets so that they are only used to support or carry out its purposes.

“Working inside the regulated banking system is the best way to achieve this. Holding a bank account also aids with transparency providing an audit trail and records, such as bank statements.”

The 2018-19 charity annual return also includes a host of new questions, two of which ask charities to detail salary information and overseas expenditure.

Trustees will typically have independent control over, and legal responsibility for, a charity’s management and administration.

As such, they fulfil a very important role within the third sector, but if they fail to uphold their responsibilities, they may find themselves under investigation by the Charity Commission.

This organisation expects all trustees to take their responsibilities seriously and will take action against trustees if they feel they have stepped outside of the rules.

The Commission expects all trustees to follow six key legal duties. These are:

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.

Comply with your charity’s governing document and the law

It is your responsibility to take all reasonable steps to learn what these rules are by reading relevant documents or seeking expert advice.

Act in the best interests of the charity

To fulfil this responsibility, you must:

  • do what you and your co-trustees decide will best enable the charity to carry out its purposes
  • 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 interests or loyalty to any other person or body
  • not receive any benefit from the charity unless it is properly authorised and is clearly in the charity’s interests.

Manage your charity’s resources responsibly

You must:

  • make sure the charity’s assets are only used to support or carry out its purposes
  • avoid exposing the charity’s assets, beneficiaries or reputation to undue risk
  • not over-commit the charity
  • take special care when investing or borrowing
  • comply with any restrictions on spending funds or selling land.

It is also the responsibility of trustees to ensure that the correct safeguards and checks are in place to ensure that these rules are complied with.

Act with reasonable care and skill

As someone responsible for governing a charity, you should use reasonable care and skill when managing the organisation and take appropriate advice when necessary.

Ensure your charity is accountable

Trustees must ensure that the organisation that they run is compliant with statutory accounting and reporting requirements.

The Commission has made it clear that they do not expect trustees to be perfect, but they do expect them to do their best to comply with their duties. As such, charity law seeks to protect trustees who have acted ‘honestly and reasonably’.

If you would like to know more about our services for charities and trustees, please contact our team today.

Posted in Charities News.