In recent years, there have been several examples of high-profile charity leaders and trustees who have stepped down or been suspended by the Charity Commission pending an inquiry into their charity’s operations or the actions of key individuals.
Given the Charity Commission is keen to publicise investigations and to name and shame those who have done wrong, it begs the question why this keeps happening, especially given the lasting damage it can do to the charity’s reputation and of those involved.
Typically having high-profile charity leaders and trustees provides a huge boost to the fortune and success of a charity. However, all trustees have the same responsibilities and need to be mindful of the potential for adverse, as well as positive, publicity.
The Charity Commission provides plenty of guidance and sets out clearly the six core responsibilities for trustees. It can be hard to be a lone voice and to point out concerns but that is one of the duties and responsibilities of being a trustee. The charity needs to have robust polices and whistleblowing procedures in place to enable trustees and staff to report any concerns. Of equal importance is the culture of the charity and this should be driven not only by the senior leadership team but also by the trustee board.
Trustees need to do their own due diligence on a charity before agreeing to take on the role. If there are red flags and some of the more basic governance processes missing, then they need to ask themselves should they really put their name and give their time to a charity which has a number of fundamental flaws unless it is realistic that change is possible.
As well as applying and being interviewed for the role of trustee, a prospective trustee needs to ask their own questions before accepting the position. They should consider speaking to the departing trustees, to find out why they are leaving, and if they later decide to decline the offer, they should not be afraid to give their reasoning to the charity.
All trustees will benefit from induction training and subsequent refresher training which links to their legal responsibilities. There are plenty of online resources available on the Charity Commission’s website.
Trustees who are leaving should be encouraged to give honest feedback in an exit interview as this can provide valuable information for the rest of the board.
Thinking back to some of the high-profile investigations which the Charity Commission has publicised, they all relate back to these key trustees’ responsibilities which are to:
- Ensure the charity works for the public benefit.
- Comply with the charity’s governing document and the law.
- Act in the charity’s best interests.
- Manage the charity’s resources responsibly.
- Act with reasonable care and skill.
- Ensure the charity is accountable.
Questions I think which trustees should constantly ask themselves are:
- Do they understand the charity’s purpose, objectives and power as set out in the governing document?
- Can they explain how all of the charity’s activities are intended to further or support its purposes?
- Do they understand who the charity is there to benefit and how the charity benefits the public by carrying out its purposes?
- Do they understand if there are any restrictions on what the charity can do and where it can operate?
- Are they aware of all of the related parties of the trustees so that the charity can avoid situations where there may be perceived to be any conflict of interest?
- Are appropriate procedures in place to safeguard the charity’s assets, comply with restrictions on use and avoid over commitment?
- Do the trustees have sufficient time and skills to perform the role?
- Do the trustees have sufficient oversight of decisions being made on behalf of the charity and appropriate review of the financial performance?
- Are key decisions and their rationale properly documented?
A regular review of these points should help to flag concerns or failings early so that the appropriate action can be taken to get the charity back on track.
Remind yourself that trustees are there to be the strategic leaders and to set the charity's direction, objectives and strategic plans. They are all responsible for the charity’s governance to ensure it runs effectively and ethically.
Trustees are there to delegate and not get involved in the day-to-day operations. They are supportive and critical friends to those managing the day-to-day operations.
Trustees need to act quickly if there is a conflict of interest and if it can’t be avoided, they should step aside from their role immediately.
Crucially, they are there to protect the charity’s reputation, so they really need to speak up where they see examples of wrongdoing. Hopefully by working together as a trustee board and with management, appropriate action can be taken in-house to resolve the issues, improve governance and strengthen internal procedures as necessary.
Unfortunately, there may be situations where a trustee does not feel that the situation is being appropriately addressed and this is where the Charity Commission would need to be informed. All trustees should ensure they are familiar with the serious incident reporting requirements. The Charity Commission has a very useful step-by-step guide on how to report a serious incident, which is supported by a table of examples on deciding what to report. If required, it is better that the trustees make their own reporting rather than it being by a beneficiary or donor.
Trustees must be prepared to speak up and voice concerns and understand that there is support in place for those that do.
Lucy Hammond is partner, charities and not for profit, at Kreston Reeves
Charity Finance wishes to thank Kreston Reeves for its support with this article
