Trustees can be held personally liable for problems encountered by the organisation if, for example, money is lost because of a bad financial decision. The aim is to ensure that trustees do not exceed their responsibilities but, in worst case scenarios, trustees may have to pay costs out of their own pockets.
Jean Dollimore, partner and head of charities group, RadliffesLe-Brasseur
The lot of charity trustees is not an easy one, but this comes with the territory. As "the persons having the general control and management of the administration of charity", they are responsible for all the activities undertaken by the charity. And, as the recent Charity Commission guidelines on vicarious liability have reminded us, this extends to the wrongful acts or omissions of employees and volunteers, even when not expressly sanctioned by the trustees. Public confidence in charities stems from a knowledge that the trustees will ensure that the objects of the charity will be fulfiled and will not exceed their powers. The important thing is that trustees are aware of their responsibilities and act accordingly.
The prudent trustee will set in place an efficient administrative and reporting structure. A trustee who has acted properly has little to fear.
Janet Cummins, chief executive of CF Appointments and charity trustee
Not in a well-run organisation. It is the trustees' responsibility to see that the charity is well managed. This means that legal matters are properly covered, that risk is carefully assessed and managed, that the right staff are in place with sufficient resources, and that the management of volunteers is right. By fulfiling this responsibility trustees protect themselves.
Clarity is the key. Trustees must understand the charity's purpose, responsibilities of staff, volunteers and trustees, how they are to be carried out and how performance will be judged. The key to delivering good governance is having trustees on board who not only understand their legal responsibilities, but also how to ensure that matters which they have delegated are carried out properly. The other principal requirement is sufficient financial knowledge to understand the charity's financial position, how its accounting demonstrates this, and whether the wool is being pulled over their eyes.
Trustees acquire these skills through training and practice. Wise trustees ensure that they get the development they need.
Tesse Akpeki, head of the trustee and and governance team, NCVO
Every day thousands of people find trusteeship an immensely rewarding and positive experience. It is true that trusteeship involves legal responsibilities, but these should not be onerous if the board carries out good governance practices. By good governance I mean targeted recruitment of trustees.
Trustees should be recruited for the skills and knowledge they can offer.
Method of recruitment should be broader than outreach by word of mouth.
Good governance also means inducting and supporting new board members to understand their duties; regularly reviewing performance; and taking proper decisions and seeking advice when things are not clear. If these practices are followed then the risk of personal liability is very low.
There is a wealth of information, advice and training on offer for trustees and greater investment is needed to enhance this support and ensure boards tap into what is on offer. Trustees should be alert, not alarmed.
Simon Wethered, partner of Charles Russell and a trustee at Marie Curie Cancer Care
The recent publication by the Charity Commission of guidelines on the vicarious liability of charities and their trustees provides a further reminder of the many risks and liabilities to which charities and their trustees are prone. That risk, particularly in the case of vicarious liability, is I imagine largely unrecognised by trustees, particularly of unincorporated charities and raises the question: "Is the legal burden on charity trustees too heavy?
To which I, as a trustee, would reply with a resounding yes.
I recently had to advise trustees of a youth club which, it now transpired, had at one time employed a paedophile. If any abused victims had brought legal proceedings, those trustees could have been personally liable to pay compensation. This example could be multiplied a hundred-fold, when you consider the plethora of laws and regulations - domestic and European - to which charities are subject. All the more reason, then, unless you work for a small grant-making charity, to at least protect yourself from direct personal liability by incorporating your charity - and then to take competent legal advice.