11 October 2013
New guidance for charity trustees
If you are a charity trustee, you may well be aware of recent cases in which trustees have been taken to court over shortcomings in the management of their charities and that, in some circumstances, trustees can be held personally liable if their actions cause a loss to the charity.
Recently, the Charity Commission issued new guidance on decision making for charity trustees.
The guidance explains the key principles that the courts and the Commission expect trustees to apply when they are making significant or strategic decisions in relation to their charity.
Among other matters emphasised for trustees are:
• Ensuring that they have the relevant powers to carry out their plans;
• Managing conflicts of interest; and
• Making informed decisions based only on relevant considerations.
If trustees follow the principles laid down, this will assist them in defending themselves if something goes wrong. Trustees who can show that they have applied and followed the principles when reaching a decision are unlikely to be held personally responsible by the courts or the Commission in the event of a resultant loss.
The guidance also covers practicalities such as making sure meetings are properly conducted, recording decisions accurately and what to do if trustees cannot reach agreement.
The Guidance, called ‘It’s Your Decision’, can be downloaded from the Charity Commission website at http://www.charitycommission.gov.uk.
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