Presented on Monday 2 November at NCVO/BWB Trustee Conference 2015 Emma Herbert, NCVO; Chinonso Denwigwe, BWB; and Ian Jospeph, Russam GMS & Trustees Unlimited What every new trustee needs to know If you would like to find out more about our 2016 Trustee Conference email us at ncvoevents@ncvo.org.uk or call us on 020 750 3153.

1. Organised by: Lead Partner:
Media Partner:
Sponsors:AM2: WHAT EVERY NEW TRUSTEE
NEEDS TO KNOW
EMMA HERBERT
NCVO
CHINONSO DENWIGWE
BWB
IAN JOSPEPH
RUSSAM GMS & TRUSTEES
UNLIMITED
Drinks sponsor:

2. ABOUT YOU: SHOW OF HANDS………
1. Who is considering becoming a trustee?
2. Who is currently a trustee?
3. Who has been a trustee for under a year?
4. Who holds more than one trusteeship?
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3. AIMS OF THIS SESSION
• To look at the context within which trustees
operate
• To provide an overview of trustee duties and
responsibilities
• To look at the key principles of good
governance
• To hear from some experienced trustees and
to learn from their experience
• To provide hints and tips for being an effective
trustee
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4. 4
QUIZ: TRUSTEESHIP IN CONTEXT

5. MATCH THE DESCRIPTION TO THE STATISTIC
Description Statistic
£billion – total income of the voluntary sector 821,000
% of the voluntary sector’s income derived from
individual donations and purchases
160,000
% of the total number of voluntary sector
organisations with an annual income of under
£100,000
46
Number of voluntary organisations 23.9
Voluntary sector paid workforce 83
£billion - Estimated value of the outputs of
volunteers
40.5

6. £40.5bnTOTAL ANNUAL INCOME OF THE VOLUNTARY SECTOR
83%% OF THE TOTAL NUMBER OF VOLUNTARY SECTOR ORGANISATIONS WITH AN ANNUAL INCOME OF UNDER
£100,000
46%% OF THE VOLUNTARY SECTOR’S INCOME DERIVED FROM INDIVIDUAL DONATIONS AND PURCHASES

7. 160,000NUMBER OF VOLUNTARY ORGANISATIONS
£23.9bnESTIMATED VALUE OF THE OUTPUTS OF VOLUNTEERS
821,000PAID WORKFORCE

8. CURRENT CHALLENGES

9. WHAT IS A CHARITABLE
ORGANISATION?
• Organisations that are set up with purposes that are
exclusively charitable; and
• must be able to demonstrate how their purposes
benefit the public.

10. 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

11. WHO ARE THE TRUSTEES?
• Voting members of the governing body
• Ultimate legal responsibility for the charity
• Usually 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

12. TRUSTEESHIP
Charity trustees are the people who are entrusted to look after
money (or other resources such as land or property) given to a
charity by a person or group of people. As a charity trustee you
must ensure that these resources are used effectively to achieve
the particular purpose for which they were given...
NCVO (2015), The Good Trustee Guide, 6th ed

13. THREE ESSENTIAL QUESTIONS FOR A TRUSTEE
• Why does my organisation exist?
• Where is it going now and in the future?
• Are we meeting our objects in the most effective way?

14. WHAT ARE THE LEGAL DUTIES OF TRUSTEES?
• Ensure the charity is carrying out its purposes for the public
benefit
• Ensure compliance with the charity’s governing document and
the law
• Act in the charity’s best interests
• Manage the charity’s resources responsibly
• Act with reasonable care and skill
• Ensure the charity is accountable
Charity Commission, The essential trustee: what you need to
know, what you need to do

15. TRUSTEE PERSONAL LIABILITY
• Governance liabilities
e.g. breach of duty under charity law
• Operational liabilities
e.g. claims from third parties
• Criminal liability for offences committed by the
charity’s staff

16. TRUSTEE LIABILITY – PROTECTION!
• Incorporation (CIO; company limited by guarantee)
but does not offer complete protection
• Trustee indemnity insurance
• Plus –
• good management practices and financial controls
• clear roles and responsibilities
• records of decisions taken
• provisions in governing document
• contingency funds
• professional advice
• board development
• risk management

17. LEGAL STRUCTURE
17
Legal form or
structure
Incorporated
(legal
personality)
Contracts/empl
oyment in the
name of
Liability to
third parties
limited
Additional
duties on
trustees
Trust No
Trustees
personally (for
the charity)
No No
Unincorporated
Association
No
Trustees
personally (for
the charity)
No No
Company Limited
by Guarantee Yes The charity Yes Company law
Charitable
Incorporated
Organisation
(CIO)
Yes The charity Yes
Charities Act and
CIO regulations

18. CHARITY COMMISSION’S VIEW
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: The essential trustee: what you need to know,
what you need to do
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19. TRUSTEES AND GOVERNANCE
Trustees take overall responsibility for everything
a charity does and they act collectively to govern
the organisation. The term often used to describe
this role is “governance”.
Good Trustee Guide, NCVO 2015, 6th ed.
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20. WHAT IS GOVERNANCE?
Governance is concerned with leadership and
direction. It is about ensuring your charity has a
clear, shared vision of its purpose, what it is
aiming to achieve and how in broad terms it will
go about doing it...
Good Trustee Guide, NCVO 2015, 6th ed.
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21. WHAT IS GOVERNANCE?
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22. THREE KEY STRANDS OF GOVERNANCE
1. Corporate/fiduciary focus on assets
2. Strategic focus on organisation
3. Impact focus on mission/users
Dorothy Dalton, Good Governance: a practical guide for
trustees, chairs and CEOs, NCVO 2011
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23. GOVERNANCE INFLUENCES
External influences
• Codes of governance – private, public, nfps
• Events in the private and public sectors
• Relevant legislation and regulation
• Requirements of funders
• Public expectations
• ‘Best practice’
Internal influences – perhaps more subtle
• A charity’s legal form
• Trustees and relationships with SMT
• Recent successes and failures
• Dependence on members or volunteers
• Size and spread of organisation
• Range and type of services provided
• Stage of development or newness of SMT/board/chair

24. SIX KEY PRINCIPLES OF GOOD
GOVERNANCE
An effective board will provide good governance and leadership by:
• understanding their role
• ensuring delivery of organisational purpose
• working effectively both as individuals and as a team
• exercising effective control
• behaving with integrity
• being open and accountable.
Good Governance: A Code for the Voluntary and
Community Sector, 2010
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25. GOVERNANCE AND DELEGATION
Governance is not necessarily about doing, it is
about ensuring things are done
The Good Governance Action Plan for Voluntary Organisations, NCVO 2002
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26. STRUCTURES AND POWER
Many boards delegate to …..
• Honorary officers
• Sub-committees
• Advisory groups
• Staff and volunteers
• Others
Trustees retain responsibility
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27. DELEGATION
27

28. 28
The Compass Cass Governance Model
Governance
Structures Processes BehavioursMeetings
• Governance structure
• Board size
• Terms of office
• Term limits
• Representation
• Committee types
• Committee size
• Task groups
• Advisory groups
• Subsidiaries
• Representation of
nations
• Representation of
stakeholders
• Vice chairs
• Succession planning
• Recruitment
• Appointment
• Diversity
• Induction
• Remuneration
• Skills and experience
• Chair selection
• Committee chair selection
• Committee member selection
• Setting strategy and tracking
organisation performance
• Governance of risk
• CE performance evaluation
• Performance of governance
• Chair performance review
• Member performance review
• Frequency
• Duration
• Attendance
• Agenda planning
• Meeting management
• Quality of papers
• Consent item
• Chief Executive’s
presence
• Manager’s presence
• People in the room
• Away days
• Use of members’ skills
• Listening
• Team working
• Praise and challenge
• Openness and trust
• Strategic focus
• Contact outside
meetings
• Conflicts of interest
• Chair-chief executive
relationship
• Experience of other
boards

29. 29

30. TIPS ON HOW TO BE AN
EFFECTIVE TRUSTEE AND THE
PITFALLS TO AVOID!
Ian Joseph

32. QUESTION – WHAT CAN GO WRONG?!
• Founder CEO manipulating board
• Weak Chair/little Napoleon
• Groupthink – non-diverse board
• Lack of expertise e.g. financial/commercial nous
• Trustees there for the wrong motivation
• Blurring of the ‘volunteer’ hat and the ‘trustee’ hat
• Not understanding conflicts of interest
• Losing sight of objectives
• …

33. QUESTION – HOW DO YOU AVOID IT?!
• Clear boundaries between board and executive
• Rigorous recruitment process for CEO and trustees
• Fixed terms of office
• Recruit for the right skills (and do not leave brain at
the door)
• Understand the organisation’s governing document
• Remember why you are there!
• …

34. • 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
• Good Governance: A Code for the Voluntary and Community
Sector and supporting material: www.governancecode.org
USEFUL RESOURCES