A dedicated board of trustees is at the core of every successful charity, carrying out their duties to ensure the organisation operates effectively.
Charity trustees are those who have control over and are legally responsible for managing a charity. They are entrusted with the organisation's assets, and their decisions immediately impact on the charity’s beneficiaries. Charity trustees must act in the best interests of the charity, making decisions that align with its mission and values. Their dedication and expertise are essential in helping the organisation reach its objectives.
Recent legislation in the form of the Charities Amendment Act 2024 (“the Act”) provides further guidance on the key duties of charity trustees, providing greater clarity on their role in a charity.
The following are the primary duties of trustees:
Complying with the charity’s governing document and relevant legislation
Charity trustees must act in accordance with the charity’s governing document and ensure that the charity complies with all applicable laws, including charity law, company law, health and safety legislation, data protection law, and employment law. They must also keep up with any changes in legislation.
Ensuring the charity's objectives are met
Trustees must ensure that the organisation is fulfilling its charitable purpose, which it was set up to achieve. They must ensure that the charity’s resources are used only to carry out its purposes. It is crucial for trustees to regularly review the charity's activities and finances to ensure alignment with its charitable objectives.
Maintaining accountability and transparency
Donors, recipients, and the general public are among the stakeholders that charities must be open and accountable to. This involves maintaining accurate records, preparing financial reports, and submitting annual returns to the Charities Regulator. Furthermore, charities should consider implementing internal controls and governance structures to promote transparency and accountability. This will help build trust with stakeholders and demonstrate a commitment to ethical practices.
Managing the charity's resources responsibly
Trustees are responsible for safeguarding the charity's assets and ensuring that they are used effectively and efficiently by developing and implementing sound financial policies, monitoring income and expenditure, and managing risks. They must put in place robust internal controls in order to guarantee that all of the charity's operations are carried out in a secure and compliant manner. By managing the charity's resources responsibly, trustees can ensure that donor funds are used for their intended purposes and that the organisation remains financially sustainable. This will also help protect the charity's reputation and credibility in the eyes of donors, beneficiaries, and the public.
Acting with due care and diligence
Trustees must perform their obligations with a reasonable level of expertise, care, and commitment. This means attending meetings, actively participating in discussions, and making informed decisions based on available information. Charity trustees should conduct themselves with integrity and in a manner that does not damage or undermine the reputation of the charity or its volunteers and employees. Trustees should also ensure they are transparent in their decision-making processes and communicate effectively with stakeholders to maintain trust and accountability.
Effective governance is critical to the success and sustainability of any charity. By carrying out their responsibilities, trustees contribute to building public trust and confidence in the charity sector.
Charities with an effective board of trustees attract and retain donors and volunteers, while also ensuring efficient and effective service delivery. Ultimately, strong governance practices help charities achieve their mission and make a positive impact on the communities they serve.
Should you require any advice on the charities governance, compliance or internal controls, please get in touch with a member of our team.
Disclaimer: This blog post is intended for informational purposes only and should not be considered legal or professional advice.