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NIDOS/OSCR Governance Workshop - Trustee Duties

NIDOS/OSCR Governance Workshop - Trustee Duties



Presentation on trustee duties from the 'Good Practice for Trustees and Governance' workshop run by NIDOS and OSCR on 21st January 2010.

Presentation on trustee duties from the 'Good Practice for Trustees and Governance' workshop run by NIDOS and OSCR on 21st January 2010.



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    NIDOS/OSCR Governance Workshop - Trustee Duties NIDOS/OSCR Governance Workshop - Trustee Duties Presentation Transcript

    • Being a responsible charity trustee The general duties of charity trustees under the Charities and Trustee Investment (Scotland) Act 2005
    • Charity trustees
      • Who is a charity trustee?
      • “ the persons having the general control and management of the administration of a charity”
      • Members of the ‘governing body’ of a charity, by whatever name they are known and however they were appointed or elected. For example:
      • board of directors
      • management committee
      • board of trustees
      • board of governors
      • executive committee
      • council of management
    • Charity trustees
      • What does OSCR mean by a ‘shadow trustee’?
      • not formally appointed as a trustee under the provisions of the charity’s governing document
      • BUT exercising significant influence over the trustees or even control over the charity
      • may be held legally liable as trustees as if they had been formally appointed
    • Charity trustees
      • Acting in a personal capacity
      • charity trustees may not give up their duties under any circumstances
      • they may delegate tasks to others but may not delegate their duties or responsibilities
      • delegated tasks must be properly supervised
    • Charity trustees
      • Who is disqualified from acting as a charity trustee?
      • unspent conviction involving dishonesty or for an offence under the Act
      • undischarged bankrupt
      • removed under Scottish or English law or the courts from being a charity trustee
      • disqualified from being a company director
    • Charity trustees
      • Disqualification: what should trustees do?
      • individual responsibility not to act as a charity trustee whilst disqualified
      • BUT in the collective interests of all trustees to ensure that none is disqualified
      • OSCR recommends trustees sign a declaration of eligibility prior to appointment
      • other checks may be advisory / mandatory for charities working with vulnerable people
    • Charity trustees TRUSTERS Those who give money or other property to the charity with the express intention that it is put to charitable use Those who act as custodians and administrators of the charity’s funds and other assets, ensuring they are used for the intended purposes TRUSTEES BENEFICIARIES Those whom the charity is set up to help, who benefit from the funds, assets or activities, or who use its services Funders, donors, benefactors Service users, clients Committee / board members When a charity is created a legal relationship called a ‘trust’ is set up between three parties
    • Charity trustees
      • What duties do trustees have under the Act?
      • four general duties fundamental to all charity trustees in carrying out their role
      • a number of more s p ecific duties including:
        • ensuring charity details are accurate on the Register
        • annual reporting to OSCR
        • seeking consent or notifying OSCR of changes to a charity
        • keeping financial records and accounting
        • controlling fundraising activities
        • providing information to the public
    • Charity trustees
      • What are the four general duties of charity trustees?
      • to act in the interests of the charity and put the interests of the charity before any other
      • to ensure that the charity operates in a manner consistent with its purposes
      • to act with due care and diligence
      • to ensure that the charity complies with the Act and with other relevant legislation
    • General duties
      • Acting in the interests of the charity
      • trustees are expected to put the interests of the charity before their own interests or those of any other person or organisation
      • this includes the interests of any person or body responsible for the appointment of a trustee
    • General duties
      • How might a ‘conflict of interests’ arise?
      • When the interests of the charity conflict with:
        • the personal interests of a trustee
        • the interests of another person or organisation who appointed a trustee
        • the interests of a class or faction within the charity’s membership who view a trustee as their representative
        • the interests of another charity with whom a trustee is also affiliated
    • General duties
      • How should ‘conflict of interests’ be dealt with?
        • declare (potential) conflicts as soon as possible
        • withdraw from discussion or decision on matters where a trustee declares a conflict
        • maintain an up to date register of trustees’ interests
        • agree a code of conduct for managing conflicts
        • ensure the governing document provides for the removal of trustees in serious or persistent breach of the Act
    • General duties
      • Operating in a manner consistent with the charity’s purposes
      • Trustees must ensure that:
      • all the activities of the charity further its purposes as stated in the governing document
      • all provisions in the governing document are complied with
      • the charity’s assets are not misapplied for non-charitable purposes or purposes other than those stated in the governing document
    • General duties
      • Ensuring operations are consistent with purposes
      • all trustees are familiar with the governing document
      • trustees receive regular reports on the charity’s activities
      • trustees are fully involved in strategic planning decisions, applications for funding etc.
      • new trustees receive a thorough induction into the charity and its work when they are appointed
    • General duties
      • Acting with care and diligence
      • The Act requires charity trustees to:
      • “ act with the care and diligence that is reasonable to expect of a person who is managing the affairs of another person”
    • General duties
      • What is meant by ‘care and diligence’?
      • Trustees are expected to:
      • ensure that the charity is run properly, responsibly and lawfully
      • ensure that the charity is and remains solvent
      • act as guardians of the charity’s assets
      • ensure that the board is ‘fit for purpose’ and that the trustees are working well together
      • apply a duty of care to paid staff and volunteers
      • exercise reasonable business sense when concluding any contracts on behalf of the charity
    • General duties
      • Duty of legal compliance
      • Trustees are expected to:
      • comply with any direction, requirement, notice or duty imposed upon the charity under the Act
      • comply with the provisions of all other relevant legislation, including:
      • company law
      • employment law
      • health and safety law
      • care registration law
      • data protection law
      • licensing and entertainments law
      • equalities law
      • tax law
      • property law
      • insurance law
    • General duties
      • Collective or corporate responsibility
      • trustees share all their duties and are equally accountable for the charity
      • some functions may be delegated (to staff, sub-committees etc) but the responsibility cannot
      • trustees should not take minority action except where this is expressly permitted in the governing document or authorised by the trustees
      • trustees acting ‘for and on behalf of’ the charity should ensure they are properly authorised to do so
    • General duties
      • Duty to correct breaches of duty
      • The Act also requires all charity trustees to take reasonable steps to ensure that:
        • any breach of general or specific duties is corrected by the trustee concerned and not repeated
        • any trustee who has been in serious or persistent breach of duty is removed as a trustee