A1: What every trustee needs to know but was too afraid to ask
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Presented Tuesday 14 November at the NCVO/BWB Trustee Conference 2017
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A1: What every trustee needs to know but was too afraid to ask
- 1. Drinks sponsors: Partner sponsor: Lead sponsor: Media partner: Tech partner: WHAT EVERY TRUSTEE NEEDS TO KNOW BUT WAS TOO AFRAID TO ASK SPEAKERS DAN FRANCIS SENIOR GOVERNANCE CONSULTANT, NCVO IAN WHITE ASSOCIATE CONSULTANT, NCVO ROSAMUND MCCARTHY CHARITY PARTNER AND JOINT HEAD OF POLITICS, ELECTIONS AND CAMPAIGNING, BATES WELLS BRAITHWAITE
- 2. • Context of trusteeship and sector • Role of a trustee • Legal duties • Liability and legal forms • Good Governance • Opportunity for any questions WHAT WE WILL COVER…
- 3. Trusteeship in context quiz Match the statement with the number
- 5. Micro Under £10,000 Small £10,000 to £100,000 Medium £100,000 to £1 million Large £1 million to £10 million Major £10 million to £100 million Super-major > £100 million Proportion of number and income of organisations by size 2014/15 (%)
- 8. WHO ARE THE TRUSTEES? The persons having the general control and management of the administration of a charity. Section 177 of the Charities Act 2011
- 9. • Voting members of the governing body • Ultimate legal responsibility for the charity • A collective group of decision makers • Elected or appointed in accordance with the charity’s governing document • Operate within a formal set of rules • In a charitable company, company directors and trustees are the same people • Trustees often delegate day to day tasks to staff and/or volunteers • Almost always unpaid WHO ARE TRUSTEES?
- 10. CHARITABLE STATUS 10 • To be award the status an organisation must be set up with purposes which are exclusively charitable • These are defined in the Charities Act 2011 • Charity purposes must meet the public benefit requirement • Charities demonstrate the public benefit by reporting annually • Its all about trust and confidence Image source: https://www.britannica.com/event/Poor-Law
- 11. LEGAL AND REGULATORY DUTIES CC3 THE ESSENTIAL TRUSTEE Drinks sponsors: Partner sponsor: Lead sponsor: Media partner: Tech partner:
- 12. Charity Commission (2015) CC3: The essential trustee: What you need to know, what you need to do
- 13. Each group will be allocated a legal duty to consider. For the legal duty think about… • What trustees can do to ensure they meet this legal duty? and • Times you think this legal duty may be challenged and how trustees should deal with this?
- 14. LEGAL FORMS AND LIABLITY Drinks sponsors: Partner sponsor: Lead sponsor: Media partner: Tech partner:
- 15. COMPARISON OF LEGAL FORMS 15 Charitable Trust Charitable Unincorporated Association Charitable company limited by guarantee (“CLG”) Charitable incorporated organisation (“CIO”) Unincorporated Incorporated
- 16. • Governance liabilities • e.g. breach of trust under charity law • Operational liabilities • e.g. claims from third parties • Failure to comply with relevant statutory requirements • e.g. data protection, health & safety, PAYE • Wrongful and fraudulent trading TRUSTEE PERSONAL LIABILITY
- 17. • Incorporation (CIO; company limited by guarantee) but does not offer complete protection • Charity Commission has a range of powers, including trustee disqualification Plus: • Trustee indemnity insurance • Good management practices • Clear roles and responsibilities • Records of decisions taken • Provisions in governing document • Contingency funds • Professional advice • Board development • Risk management TRUSTEE LIABILITY
- 18. CHARITY COMMISSION’S VIEW 18 The Charity Commission expects trustees to take their responsibilities seriously... The Commission recognises that most trustees are volunteers who sometimes make honest mistakes. Trustees are not expected to be perfect – they are expected to do their best to comply with their duties. Charity law generally protects trustees who have acted honestly and reasonably. Charity Commission (2015) CC3: The essential trustee: What you need to know, what you need to do
- 19. CHARITY GOVERNANCE CODE Drinks sponsors: Partner sponsor: Lead sponsor: Media partner: Tech partner:
- 20. PRINCIPLES OF GOOD GOVERNANCE 20
- 21. • NCVO: www.ncvo.org.uk/practical-support/governance • NCVO Consultancy and training: https://www.ncvo.org.uk/training-and-events • Knowhow Nonprofit: http://knowhownonprofit.org • Good Trustee Guide, 6th ed, NCVO 2015 • BWB booklet: http://www.bwbllp.com/knowledge/2015/05/08/duties-of- charity-trustees • Charity Commission website: www.charity-commission.gov.uk and the core guidance - The Essential Trustee: What you need to know • Charity Good Governance: www.charitygovernancecode.org USEFUL RESOURCES
Editor's Notes
- Unless another accounting framework or alternative SORP applies Thresholds 10,000 – charity reg basic audit threshold 1M