Trust Me!

The role of a charity trustee is set out by the Charity Commission's ("the Commission") current guidance as follows:

'They have and must accept ultimate responsibility for directing the affairs of a charity, and ensuring that it is solvent, well-run and delivering the charitable outcomes for the benefit of the public for which it has been set up.' (Charity Commission: The Essential Trustee: What you need to know (CC3) - Section D)

In addition to this there are generally further powers and responsibilities set out in the document which governs the Charity's rules and thus a charity trustee will commit a breach of trust or duty if s/he carries out an act which is not authorised by the governing document or contradicts the above role.

The majority of those who act as charity trustees are unpaid volunteers, which has historically led to calls that volunteers should not be held personally responsible for their acts. The courts have reacted to this and generally will not hold a charity trustee personally responsible for those actions which have been reasonably undertaken, despite the fact that they may have been mistaken. However, if a charity trustee is paid for his/her services or holds himself out as having a particular expertise then a higher standard of care may be implied. If a charity trustee commits a deliberate or reckless breach, amounting to misconduct and serious losses to the charity, then the Commission can hold that charity trustee to be personally accountable.

The Commission's new guidance now gives charity trustees the added responsibility to respond and take action to recover funds lost to a charity through deliberate or reckless behaviour. The new expectations of charity trustees include:

- Considering what steps to take to recover property, in the best interests of the charity;

- Taking legal advice;

- Considering the economic prospects of successfully recovering the property and the proportionality of their actions; and

- Seeking the Commission's consent or advice where necessary and appropriate.

However, the Commission will not leave it all to the charity trustees. It states in its guidance that in situations where the charity trustees are unwilling or unable to act, the breach is sufficiently serious and there is a significant amount of money involved, the Commission will step in and use its powers of intervention and remedy. Some of the powers that the Commission has at its disposal include...