Charity Commission Guidance

 
Charity trustees are the people who serve on the governing body of a charity. They may be known as trustees, directors, board members, governors or committee members. Charity trustees are responsible for the general control and management of the administration of a charity. 
Their responsibilities and duties are summarised on the next page. The great majority of trustees serve as volunteers, and receive no payment for their work. 
In this guidance, where we use “must”, we mean it is a specific legal or regulatory requirement affecting trustees or a charity. Trustees must comply with these requirements. 
We use ‘should’ for items we regard as minimum good practice, but for which there is no specific legal requirement. Trustees should follow the good practice guidance unless there’s a good reason not to. 
 
Trustees and their responsibilities 
Charity trustees are the people who serve on the governing body of a charity. They may be known as trustees, directors, board members, governors or committee members. The principles and main duties are the same in all cases. 
(1) Trustees 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. 
 
Compliance – Trustees must: 
(2) Ensure that the charity complies with charity law, and with the requirements of the Charity Commission as regulator; in particular ensure that the charity prepares reports on what it has achieved and Annual Returns and accounts as required by law. 
(3) Ensure that the charity does not breach any of the requirements or rules set out in its governing document and that it remains true to the charitable purpose and objects set out there. 
(4) Comply with the requirements of other legislation and other regulators (if any) which govern the activities of the charity. 
(5) Act with integrity, and avoid any personal conflicts of interest or misuse of charity funds or assets. 
Duty of prudence – Trustees must: 
(6) Ensure that the charity is and will remain solvent. 
(7) Use charitable funds and assets reasonably, and only in furtherance of the charity’s objects. 
(8) Avoid undertaking activities that might place the charity’s endowment, funds, assets or reputation at undue risk. 
(9) Take special care when investing the funds of the charity, or borrowing funds for the charity to use. 
 
Duty of care – Trustees must: 
(10) Use reasonable care and skill in their work as trustees, using their personal skills and experience as needed to ensure that the charity is well-run and efficient. 
(11) Consider getting external professional advice on all matters where there may be material risk to the charity, or where the trustees may be in breach of their duties. 
 
If things go wrong 
The Charity Commission offers guidance to charities on both legal requirements and best practice to help them operate as effectively as possible and to prevent problems arising. In the few cases where serious problems have occurred we have wide powers to look into them and put things right. Trustees may also be personally liable for any debts or losses that the charity faces as a result. This will depend on the circumstances and the type of governing document for the charity. However, personal liability of this kind is rare, and trustees who have followed the requirements on this page will generally be protected. 
 
E Trustees and their responsibilities 
Charity trustees are the people who serve on the governing body of a charity. They may be known as trustees, directors, board members, governors or committee members. The principles and main duties are the same in all cases. 
Trustees have, and must accept, ultimate responsibility for directing the affairs of a charity, and ensuring that it is solvent, well-run, and meeting the needs for which it has been set up. 
 
Collective responsibility: Subject to any power of delegation there is a general rule that trustees must take personal responsibility for their decisions, and that all decisions concerning the charity must be taken by the trustees acting together
 
Special responsibilities: The Treasurer and the Chair of the charity will have wider responsibilities than other trustees. For instance, the Treasurer will ensure that proper accounts are kept, and help set financial and investment policies. The Chair, as well as helping to plan and chair trustee meetings, may also be the link between the trustees and the employees and representing the charity at appropriate events. However, when it comes to making decisions about the charity, the trustees must take them together.
 
Trustees must: 
•ensure that the charity complies with charity law, and with the requirements of the Charity Commission as regulator; in particular ensure that the charity prepares reports, Annual Returns and accounts as required by law
•ensure that the charity does not breach any of the requirements or rules set out in its governing document and remains true to the charitable purpose and objects set out there
•comply with the requirements of other legislation and regulators which govern the activities of the charity
•act with integrity, and avoid any personal conflicts of interest or misuse of charity funds or assets
 
Prohibited benefits: Trustees are not entitled to receive any payment out of the charity’s funds other than reasonable and necessary out-of-pocket expenses, such as the cost of travel to attend trustee meetings
 
Duty of prudence 
Trustees must: 
•ensure the charity is and will remain solvent
•use charitable funds and assets reasonably, and only in furtherance of the charity’s objects
•avoid undertaking activities that might place the charity’s endowment, funds, assets or reputation at undue risk
•take special care when investing the charity’s funds or borrowing funds for it to use
 
Duty of care 
Trustees must: 
•use reasonable care and skill in their work as trustees, using their personal skills and experience as needed to ensure that the charity is well-run and efficient
•consider getting external professional advice on all matter