Charities should carry out background checks on prospective trustees and ensure the board understands trustee eligibility law, according to new, free guidance from ICSA: The Governance Institute.
The trustee eligibility guidance, published today, says charities should always check with organisations such as the Charity Commission, Companies House, the Disclosure and Barring Service and the Individual Insolvency Register before appointing someone as a trustee.
Charities should also ensure all trustees understand the specific trustee disqualification criteria for the organisation – which often include rules on incapacity and codes of conduct – and meet those requirements, the guidance says.
New rules on automatic disqualification for trustees and senior management that are coming into force on 1 August should also be fully understood by charity boards, the guidance says.
The new rules, which are in the Charities (Protection and Social Investment) Act 2016, mean trustees can be disqualified automatically for a number of additional criminal offences and for directly disobeying Charity Commission orders.
But potential trustees who are automatically disqualified can obtain waivers from the commission to serve as trustees, though each case will be decided on its own merits, the guidance says.
The guidance also warns trustees that their failure to follow Charity Commission guidance on eligibility when appointing another trustee could end with the regulator taking action against them.
Louise Thomson, head of policy (not for profit) at ICSA, said: "Given the large number of beneficiaries who rely on these charities, it is essential that the right people are recruited to the board, not just in terms of skills, attributes and competences, but also in terms of ensuring an individual meets the legal and constitutional eligibility criteria.
"Appointing a trustee who is not eligible can have serious consequences for the individual, the board and the charity."