Keep it legal: Hiring and firing trustees

If Henry II was correct, priests and trustees have something in common. Both can be troublesome, and both can prove difficult to get rid of.

In the case of trustees, at least, there is a good case for their security of tenure. Trustees exercise considerable discretion and their decisions must sometimes favour one party over another.

In order that trustees can arrive at decisions fairly, they must be free of outside influence. Anyone seeking to influence a trustee would be in a strong position to do so if he also held the power to sack him. Job security is therefore a safeguard for the charity. On the other hand, however, it may be absolutely necessary to be able to remove a trustee in certain circumstances to protect the trust fund, such as in the case of trustees acting fraudulently. Any power to sack trustees must therefore balance these two seemingly incompatible imperatives.

The first place to look for the necessary power is in the trust document itself. This may provide for specific circumstances in which a trustee will be discharged, perhaps making reference to part of one of the Charities Acts, such as section 72 of the Charities Act 1993. This specifies various grounds for discharging a trustee against their will, including conviction for any offence involving deception or dishonesty, and being declared bankrupt. The document may also empower the trustees to vote to sack a fellow trustee, but this is useful only if coupled with the power for trustees to reach decisions by majority voting; otherwise the objectionable trustee could simply veto the decision.

If the trust document cannot assist, the court has power to remove trustees, but only in limited circumstances - usually bankruptcy or wilful breach of trust. As with any court procedure, however, these actions are time-consuming and costly, and are to be avoided if at all possible.

Finally, the Charity Commissioners have the power to remove or suspend trustees, which they will do to protect the trust fund, typically as a result of a formal inquiry. Like the courts, the commissioners cannot simply remove a trustee because they don't like him or her. They must have good reason and their decision may be subject to appeal.

Rather than sack troublesome trustees, the better plan is to appoint the right ones in the first place - although, admittedly, this is sometimes easier said than done.

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