Calling all trustees – does your charity need a governance review?

Duties and responsibilities of charity trustees

The trustees of a charity are responsible for the affairs of the charity and hold a fiduciary position that demands high standards of trust and confidence.

It is not uncommon for charity trustees to regularly review their charity’s objects to ensure that the charity’s current and proposed activities continue to fall within them. However, with the duties and responsibilities in mind, it begs the question how often the charities governance documents are reviewed?

The Charity Commission highlights the following areas as key duties and responsibilities for trustees to consider:

• Ensure your charity is carrying out its purposes for the public benefit
• Comply with your charity’s governing document and the law
• Act in your charity’s best interests
• Manage your charity’s resources responsibly
• Act with reasonable care and skill
• Ensure your charity is accountable

Ensuring compliance with the governing document and reviewing the governance regularly, will stand the trustees in good stead to achieve the other duties.

Depending on the legal form of the charity, and especially if the charity is unincorporated, trustees could be held personally liable to either their charity for financial loss caused by them acting improperly or to a third party that has a legal claim against the charity that the charity can’t meet.

It is imperative that all trustees act responsibly and take action to address any gaps in or a lack of engagement with their governance documents to reduce the risk and ensure they are meeting their duties as detailed by the Charity Commission.

Governance documents

It is well documented that often the cause of the Charity Commission’s serious concern about a charity, derives from lack of trustee engagement with governance.

Failure to comply with the governing document will lead to a lack of understanding around the charities purpose and its rules. This lack of understanding will mean trustees are unable to carry these out, and in turn will fall foul of their responsibilities.

Key documents include:

• Governing document; Memorandum and Articles of Association, Constitution or Rules, or Trust Deed
• Governance code
• Complaint procedure
• Risk Register
• Equality, Diversity, and Inclusion policy
• Board Minutes
• Safeguarding policy

Having these policies in place is the first step, the second and most important step is to ensure not only that the trustees are aware of their existence but truly understand them and engage with them. These documents set out a framework for the effective running of the charity, however they should be treated as ‘live’ documents, never complete and constantly evolving.

How we can help

An external review of not only your charity’s governance documents but also the trustees’ engagement with governance can equip the charity to understand its strengths, consider the weaknesses, and receive recommendations for areas to improve.

Often trustees pride themselves on delivering the aims of the charity to the highest standard by ensuring that each trustee has the skills and knowledge to improve the functionality of the board. Whilst this is imperative, the trustees should also seek to ensure that the governance of the charity is also held to that high standard and is aligned with the Charity Commission’s guidance and standards.

If you feel your charity could benefit from a governance review, please get in touch and we would be pleased to discuss the options available.  Contact Abigail Bartlett on 01227 763939.