Charity trustee: role and responsibilities

People become charity trustees because they care about the cause. Then the first board pack arrives, with a budget, a risk register and a decision about the lease. The role turns out to be about governance as much as good intentions. Trustees are the people legally responsible for the charity. This guide covers what the role involves, the six main duties, who can be a trustee and how trustees take and record their decisions. It describes the position in England and Wales. It’s general guidance, not legal advice.

What a charity trustee is

A charity trustee is one of the people who are responsible for running a charity. Depending on the charity, they may be called trustees, directors, board members or committee members. What makes them trustees is the role, not the title.

Trustees govern. They set the charity’s direction, take the major decisions and oversee how its money and people are managed. In larger charities staff usually do the day-to-day work, while in smaller ones the trustees often run it too. In a charitable company, the trustees are also the company’s directors under company law.

Trustees act together. No single trustee can decide for the charity, unless the governing document lets the board delegate a matter to them, and the board stays responsible even then.

The six main duties

The Charity Commission, the regulator for charities in England and Wales, sets out six main duties for trustees in its guidance The essential trustee.

1. Ensure the charity is carrying out its purposes for the public benefit. Know what the charity’s purposes are, and check that its activities serve them.
2. Comply with the governing document and the law. Follow the charity’s constitution and the law that applies to it, including preparing annual accounts and sending the Charity Commission the returns it requires.
3. Act in the charity’s best interests. Make decisions for the charity, not for yourself, other trustees or anyone else, and handle conflicts of interest openly.
4. Manage the charity’s resources responsibly. Protect its money and property, manage the risks and don’t take on more than the charity can carry.
5. Act with reasonable care and skill. Prepare for meetings, ask for advice where you need it and use the experience you have.
6. Ensure the charity is accountable. Be able to show funders, beneficiaries and the public that the charity is complying with the law, well run and effective.

Who can be a trustee

In England and Wales, most people aged 18 or over can be a trustee. For a charitable company or a charitable incorporated organisation (CIO), a legal form made for charities that gives trustees limited liability, the minimum age is 16. Some people are disqualified by law, for example because of certain unspent criminal convictions or an undischarged bankruptcy, unless they apply for and get a waiver from the Charity Commission.

How trustees are appointed depends on the governing document. Some are elected by the members at the annual general meeting, others are appointed by the existing trustees.

Pay, expenses and liability

Pay. Trustees are generally unpaid. Paying a trustee for being a trustee needs a clear power in the governing document or authority from the Charity Commission. The law also lets a charity pay a trustee for services beyond the role, under strict conditions. The charity can normally repay reasonable expenses.

Liability. It depends on the legal form. A charitable company or CIO takes on its own debts, so its trustees usually aren’t liable for them. In an unincorporated charity, such as a trust or an unincorporated association, trustees contract personally and may have to cover what the charity’s assets can’t. A trustee can also be liable to the charity for a breach of duty. The Charity Commission or a court may relieve a trustee who acted honestly and reasonably. A trustee who acted dishonestly, negligently or recklessly shouldn’t expect that protection. A charity can buy trustee indemnity insurance if the trustees decide it’s in the charity’s best interests and the governing document doesn’t forbid it. The cover has legal exclusions, such as dishonesty and recklessness.

How trustees take and record decisions

Trustees decide together, at trustee meetings or in another way the governing document and the law allow. Check both the governing document and the rules for the charity’s legal form for the quorum, notice and voting threshold. If they say nothing, check the law and the Charity Commission’s guidance, and consider amending the governing document.

Conflicts of interest. A trustee with a personal interest or a conflict of loyalty declares it. The board deals with it as its rules and the Charity Commission’s guidance require. Usually that means the trustee doesn’t take part in the discussion or the decision.

Minutes. For charities in England and Wales, Charity Commission guidance says the minutes should record the decisions, the reasons for them and who voted and how. The same guidance says trustees should approve the minutes at the next meeting and the chair should sign them. Our guide to board meeting minutes covers what to record, and the board meeting guide covers the meeting cycle.

Outside England and Wales

In Scotland, charities are regulated by the Office of the Scottish Charity Regulator, and in Northern Ireland by the Charity Commission for Northern Ireland. Both publish their own guidance for trustees, and the rules differ in detail. Outside the UK, the role is set by each country’s law and the organisation’s governing document.

How Hippoly helps

Many trustee boards meet a few times a year, with members who have day jobs. In Hippoly the notice can go out by email with a calendar invitation, and the board pack sits on the agenda, item by item. The secretary writes the minutes from the agenda and sends them for e-signing in the same flow. The follow-up goes into actions, so nobody has to wait for the next meeting to find out who’s doing what. Read how Hippoly works for nonprofits, or book a demo to see it.