12/07/10

By Howard Lent

Too many business owners are becoming trustees of charities without understanding the legal implications, according to some finance experts.

There are more than a million charity trustees in the UK but as few as one in four charities runs induction training.

Charity trustees have a legal responsibility for the management and decision making of a charity.

Legislation imposes obligations upon trustees, highlighting the trend towards greater responsibility and accountability.

Trustees are responsible for what they themselves do and don’t do but may also be held liable for the actions of others.

The issue is being highlighted as the number of serious incidents reported to the Charity Commission rose by more than 75 per cent in 2009/10.

Helen Besant-Roberts, head of charities at accountancy firm Hurst, said: “Becoming a trustee is a hugely rewarding role, providing a broad range of experience and, in the majority of cases, there are no problems.

"However, the responsibility shouldn’t be taken on without careful consideration. Too many trustees don’t realise the risks and responsibilities involved in being a trustee.

“Charities suffer internal and external fraud in the same way as the private sector. With the economic downturn and cuts in public spending, charities are under even more pressure and the risk of fraud and other incidents is even greater.

"Trustees need to make sure that they have appropriate protection in place, are constantly alert to incidents and report them to the Charity Commission."

Trustees are responsible for the general control and management of the administration of a charity.

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