BLOG: Tears such as trustees weep

A recent survey by the Cass Business School and the Cranfield Trust identified that up to 25 per cent of trustees are thinking of stepping down as the result of pressure and compliance demands – as both a charity solicitor and a charity chairperson this brings tears to my eyes.

The thought of losing so much talent at the same time as having to find qualified people to replace those stepping down is what nightmares are made of.

Whether a charity is a company limited by guarantee, a charitable incorporated organisation or an unincorporated association, the trustees are responsible for the general control and management of the administration of their charity. When a charity is incorporated, the charity has legal personality and all activity, including contracts, are undertaken in the name of the charity. However, when the charity is unincorporated, the charity has no legal personality and all of the charity’s activities have to be undertaken in the name of the individual trustees, which can lead to additional concerns and make recruitment more difficult.

All trustees are bound by the duties of trustees set out by law and in charity legislation. When the charity is incorporated the trustees are also required to comply with the codified duties of directors set out in companies’ legislation. Compliance with these duties is a legal requirement and does need active participation by the trustees in the running of the charity. However, with good management and involvement by all of the trustees this is easily managed.

The difficulty is in ensuring balance between the skills that are required at board level. It is not sufficient for trustees to be committed to and to understand the objects and activities of the charity, the trustees are responsible for all compliance, the financial management of the charity as well as ensuring that the charity achieves its objectives. In addition, even if you have a particular skill set, a trustee cannot abdicate their responsibility in other areas – you cannot say, “…well X understands finance, so I will leave finance to them”.

Not only do different skill sets have to be brought together, once all of these have been recruited and inducted, they then have to work together for the benefit of the charity. This can be a very complicated process and result in a great deal of work for the chairperson and management team. Skills are important, but it is also necessary to ensure that the personalities on a board can work together and with the executive in harmony – challenge without conflict, question without accusation and probe to ensure protection.

A trustee’s work is never done, just when you have data protection under control, cyber security will rear its head, when that is finished, a harassment query will spring to mind, the budget is reoccurring and ethical investment is not far behind. There are many challenges, but the rewards are even greater. Those of you that are trustees, please stay, spread your knowledge! Those that have not taken the plunge – join up now.

Benjamin James is head of charities at the original next generation law firm, McCarthy Denning. He specialises in charity governance and commercial and intellectual property matters affecting charities. He is a member of the Charity Law Association and the Association of Charity Chairs.

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