Charity Commission's new version of trustee guidance CC3 changes definition of 'should'

The regulator's updated guidance makes the amendment in response to sector concerns that the previous definition was not consistent with charity law

The Essential Trustee (CC3)
The Essential Trustee (CC3)

The Charity Commission has released a new version of its trustee guidance The Essential Trustee (CC3), which includes a change to its definition of the word "should".

Sector bodies had raised major concerns about the tone and content of the preliminary redraft of CC3 after it was released by the commission in November – and, although several amendments made to the final version have been welcomed, one lawyer said today it still represented "regulatory creep".

The November redraft of the commission’s guide to trustee responsibilities explained that trustees were expected to comply with specified good practice unless they could justify not doing so. Previously, good practice was explained by the guidance as "what trustees should do". The document also included a clearer layout and links to other commission guidance, and was much shorter than the previous 41-page version at 31 pages.

In February, a joint response to the consultation by the National Council for Voluntary Organisations, the Charity Finance Group and the Association of Charitable Foundations said that the new tougher definition of "should" was not "consistent with basic charity law". They said it "could easily lead to a situation where good practice recommendations from the commission are elevated to and treated as legal requirements that must be met by trustees. There is therefore a high risk of regulatory creep."

The Charity Law Association’s response to the consultation said it was "very concerned that the draft guidance does not draw clear distinctions between good practice, regulatory expectations/requirements and legal duties", and that its "robust tone may discourage some people from taking up a role as a charity trustee".

The Charity Commission said in March the response to the consultation was "overwhelmingly positive", although it would take the aforementioned concerns into account.

The new version of CC3, published today, is 39 pages long and defines "should" as "meaning something is good practice that the commission expects trustees to follow and apply to their charity".

Chris Priestley, a partner at the law firm Withers, who chaired the working party that put together the CLA response, said: "I think the tone is a bit better, but it’s not fantastic. You’ve got to strike the right balance between saying you’ve got these legal responsibilities and encouraging people to be trustees."

But he said it still represented "regulatory creep".

"They should be clear about what is a legal requirement and what is something that the Charity Commission wants you to do, because they’re very different," he said. "You shouldn’t always blindly follow what the regulator wants or governance becomes a box-ticking exercise and you’re not actually thinking about what is in the best interest of a particular charity."

Ciaran Price, policy officer at the policy and publishing charity the Directory of Social Change, which had also been critical of the definition of "should" in the redraft, said the new version did "make a good effort to more clearly explain the very complex issue of the differences between what a trustee must and should do".

Price said he thought the new version of CC3 "strikes the right balance between providing sound regulatory advice and reflecting the huge value of trustees". He praised the commission for listening to the sector.

"This is an example of consultation at its best, a lesson to all regulators and something we hope to see more of in the future," he said.

Karl Wilding, director of public policy at the NCVO, said: "The new guidance is clearer and more concise than its predecessor, with a structure that’s easier to follow. These improvements and the added clarity are a result of the Charity Commission’s thoughtful consultation process, taking on board feedback and addressing our concerns."

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