So they delegate tasks and areas of responsibility to individual trustees or small committees of trustees. When delegating, they must ensure their positions are not compromised.
Trustees are anxious about the unprecedented personal liability they face. The Charities Act 2006 allows charities to take out trustee indemnity insurance. In practice, it is rare for trustees to be held liable, but it is still a risk, and they need to put in place steps to ensure accountability when delegating responsibility.
A good starting point for them is to look at their charities' governing documents for details of any delegation powers. These must be followed exactly, otherwise the delegation may be unauthorised. Other legislation, such as the Trustee Act 2000, may be relevant.
This, for example, allows unincorporated charities and trusts to employ agents and to delegate powers to them, so the agents can carry out decisions that the trustees have taken, invest assets, raise funds and perform other functions.
Delegation of day-to-day operations to staff or volunteers is permissible. In these cases, the scope of the delegated authority should be clearly laid down in writing and instructions given for decisions on important matters to be reported to the trustees. Trustees should establish proper reporting procedures and clear lines of accountability, because the ultimate responsibility rests with all of the trustees. If sub-committees are set up, they should have clear written terms of reference.
Trustee boards should ensure that delegated authority is clear, documented and reviewed regularly; they should meet regularly to discuss the activities of the charities concerned; and they should require agents or staff to report regularly to the boards to enable them to take proper decisions.
They should also ensure staff are given enough information to take decisions when appropriate, have clear lines of responsibility, well-documented budgetary guidelines and good management practices, and keep records of decisions.
- Simon Leney is a partner at Cripps Harries Hall LLP.