What does your trustee board look like?

How do you attract the trustees your charity deserves?

Recent research commissioned by Ecclesiastical, in our capacity as a specialist charity insurer (in conjunction with independent research agency FWD), reveals that many charities struggle to recruit trustees and attract women and young individuals.

This report looks at what you can do to attract a diverse range of trustees to join your board.

www.ecclesiastical.com/charityinsurance

Individuals become trustees of a charity for many different

reasons. Some do so because it represents a cause close

to their heart, whereas others may see trusteeship as the

opportunity to become more involved in the direction that a

charity takes.

Fewer than 12% of trustees are under 45*Source: FWD Charity Research (May 2012)

By becoming a trustee of a charity, the person has similar

responsibility to that of a director of a company. This

means it carries the same responsibilities as becoming a

director of a commercial organisation.

Recent research commissioned by Ecclesiastical shows

the demographic profile of trustees is predominantly male

and over 45 years old. This may be because the level of

responsibility taken on, often on a voluntary basis, attracts

senior professionals working at a high level within industry.

Women are also under represented with under 16% of all

trustees being female.

Less than a third have been in their post for more than 5 years*Source: FWD Charity Research (May 2012)

Individuals who become trustees tend not to stay with

their chosen charity for longer than five years. Research

reveals that only a third stayed in post over this time and

is therefore something for charities to consider when

managing their board.

“ “

Demographic profile

Trustees are predominantly

What does a trustee look like?

Anyone has the potential to become a trustee. Whether young, old, male, female, a professional or a student, charities are looking for a diverse range of skills and experience. However this diversity is not necessarily reflected in the trustee demographic revealed in our recent research.

“ “

Top 300All charities

Age profile of trustees30

-40

yrs

Und

er 3

0

45-6

0yrs

71yr

s+

61-7

0yrs

0%

10%

2%

51%

61%

18%

12%

1%

*Source: FWD Charity Research (May 2012)

* Source: FWD Charity Research (May 2012)All Charities – 100 responses. Top 300 – 41 responses

Trustee case study: Senior professional, Company Director

Why I became involved

I first became a trustee a couple of years ago.

I’d visited several charities on behalf of my

employers at the time - all as part of a Business

in The Community initiative. Whilst it was clear

that the charities I met that day were all doing

very worthwhile work, for some reason I was

struck by the ambitious plans of one particular

organisation and of the job opportunities that, if

successful, they would create within an area of

high longterm unemployment.

Add to this the fact that I’d been so impressed

with their Chief Executive and that they were

operating in an area relatively close to my

home, and it all meant that I left the visit highly

motivated by what I had heard and wondering

how I might help them achieve their goals.

I kept in touch with their CEO over the next

few months to find out how their plans were

progressing and, coincidentally, it transpired

that they were looking for trustees to join

their Board. I was approached and offered the

opportunity to become a trustee and happily

accepted. And so it came to pass that I joined

the charity as a trustee.

And so I joined the charity as a trustee. The

charity in question is Gloucestershire Gateway

Trust and you can read more about them at

www.gloucestershiregatewaytrust.org.uk.

What a trustee doesSince then I’ve been an active participant of the

charity in many different ways:

n I’ve attended board meetings, press launches

and council planning meetings

n I’ve helped them undertake risk assessments

and helped introduce steps to mitigate those

risks.

n I’ve helped them develop both strategic and

operational plans.

n I’ve arranged trustee liability insurance for the

charity and all its trustees.

And I’ve contributed in one hundred and one

other different ways, too numerous to mention.

Making a differenceOverall I believe that not only has the charity

benefited from my involvement as a trustee but

that I have also gained from the relationship.

Coming from a financial services background,

one of the most important things I’ve done is

in ensuring that the charity understood the

risks they were exposed to - and that they had

adequate trustees indemnity insurance in place.

In return I’ve benefited by broadening my

knowledge and experience into areas of business

where I had no previous exposure. And let’s not

forget that addition to all of this I’ve been able to

give something back to society by helping a char-

ity improve the lives of others.

Is it worthwhile?Being a trustee may not be paid employment but in other respects the benefits are priceless.

Almost half of charities struggle to recruit trustees*Source: FWD Charity Research (May 2012)

Guiding a charity is tantamount to managing a company.

Trustees must oversee:

n The application, protection and investment

n The charity’s money and property

n Supervision of the charity’s employees and agents

n The maintenance and preparation of the charity’s

accounts.

Trustees are subject to what is called ‘joint and several

liability’ which means any individual trustee can be held

responsible for the acts of any of their co-trustees.

How to make yourself attractive to potential trustees

So the ‘market’ for trustees is more competitive than ever.

But this doesn’t mean you should give up, there’s a great

deal you can do to make your charity the kind of organisation

a trustee will want to support.

n First of all you can make your charity’s purpose and

vision very clear

n Sell what your charity is there for, make its goal

inspiring and motivating

n You can also improve the day-to-day running and

organisation of your charity so that it is clear you are

doing a great job

n Focus on those potential trustees who have a real

understanding of your work.

You should also ensure that all trustees, (and indeed

employees and volunteers) go through an effective

induction process so that they are fully prepared for the

job which they are taking on. You should make the true

extent of their duties and responsibilities clear by discussing

this with them, and with the Charity Commission if necessary.

“ “

Do you ever struggle to recruit trustees?

Reasons why recruiting trustees can be difficult

Recruiting a trusteeRecruiting the right trustee with the right level of skills and experience has always been a difficult task. If the trustee is taking the job seriously, there is a great weight of responsibility they need to bear on their shoulders.

52%

48% 48%

52%

Yes No

Top 300

All charities

46%

4%5%

5%

9%

11%

20%

Demanding/time consuming

Lack of commitment

Too much responsibility

Not being paid

Difficult to find people who understand sector

Lack of interestFear of something going wrong

*Source: FWD Charity Research (May 2012)

All Charities – 100 responses. Top 300 – 41 responses.

*Source: FWD Charity Research (May 2012)

Why not download Charity commissions guide: ‘The Essential Trustee’www.charity-commission.gov.uk

Trustee case study: Young professional, Marketing Executive

Three reasons to become a trusteeI was appointed as a trustee in June this year for Emmaus and will be formally co-opted on to the Board in November for a three year term. There are lots of things to think about before becoming a trustee but here are three good reasons why you should think about becoming one.

Time – use it productively

I think one of the reasons that people don’t volunteer for things is because of the time commitment. It was something I considered before applying.

But, to be honest looking at what I do with my spare time reveals a lot less constructive use of it and a lot more catching up on Eastenders and Secret Eaters than I might like to admit.

You do have to make a commitment, so it’s important to understand how much time you’ll need to offer. For me it was important to choose a cause that I felt strongly about and wanted to commit my free time to working with.

Skills – use your own and learn more

Trustees come from all walks of life and should have different skills, backgrounds and experience to create an experienced Board.

I have never worked in the charity sector but Emmaus were looking to appoint trustees with experience of working in PR and communications. But, being a trustee isn’t just about using my own skills, I am part of a team of trustees who each have their own set of skills enabling me to learn from them and expose me to new experiences and challenges.

1

2

Keep life interesting

Day to day, although my colleagues are a varied and exciting bunch, I never expected to see a man in a giant blue M&M costume! However, having spent a day at Emmaus that is exactly what I saw.

Being a trustee brings with it certain legal responsibilities and therefore the slim risk of becoming personally involved in a legal action. So working for an insurance company I did check whether or not Emmaus had trustee indemnity insurance, which they do. The policy generally applies so long as the trustee concerned has been acting in good faith.

If you are going to be a trustee I think it’s important to get to get know and understand the organisation that you are working with, don’t keep it at arm’s length, but you also need to understand exactly what your role as a trustee is and what it is not.

As a wise man once said, if you think of Emmaus like the titanic, the companions and staff are the crew, the executive team are the captains and the trustees are like the shipping line who decide the route of the ship. Let’s not think of it as the titanic but you get the idea.

Learn more about Emmaus Gloucestershire and their work at: www.emmausglos.org.uk

3

Any concern a potential trustee may have about the

personal liabilities they are assuming can be eased

through the provision of Trustee Indemnity insurance. It

can provide a reassuring safety net – if a trustee makes an

honest mistake, trustee insurance is there to protect them.

Purchasing this cover has been made easier by The

Charity Act 2006. However, there are some restrictions:

n Reckless acts can’t be covered

n neither can criminal fines or penalties imposed by

public authorities

n or any costs arising from a conviction for fraud or

dishonesty.

Insurance is there to cover the unexpected, not an

intentional wrongdoing.

Insurance doesn’t replace the need for good risk

management of course. The two should come hand in

hand. Proper procedures and good governance reduce

the likelihood of anything happening in the first place. So

risk management should be top of your mind. This means

thoroughly assessing the risks associated with your activities

and putting in place measures to minimise those risks.

It’s a responsible approach like this which will reassure

trustees and help to attract them in the first place.

Given the current economic climate, recruiting the right

calibre of trustee is only likely to get more challenging in

the future. So you need to sell your charity, what it stands

for and what it achieves. You also need to reassure trus-

tees that you can offer them protection should an

unfortunate incident occur. The third sector needs skilled

and enthusiastic trustees in order to continue its work.

The fear of personal responsibility should never become a

barrier for trustees, so we all need to work hard to reassure

trustees that we’re behind them.

Trustees may need to call upon this cover for a variety of

reasons:

Examples

n Claims could arise as a result of improper investment

of the charity’s funds for example. If a trustee

unintentionally invests funds in a company which

subsequently folds and as a result all of the charity’s

money is lost.

n Other awkward legal situations might call for trustee

indemnity insurance. In one case part of a charity’s

building was sub-let when the charity didn’t actually

have permission from the landlord. The landlord sought

compensation from the charity, which insurance was

able to cover.

Trustee indemnity insurance

Although not a legal requirement, this particular insurance cover is often considered essential by charities when seeking to recruit high calibre trustees.

What do you perceive as being the main risks facing trustees?

“

“

Public Liability is perceived as the main risk facing trustees, followed by lack of knowledge of their responsibility & financial liability

Pub

lic L

iabi

lity

Lack

of

know

ledg

e

Fina

ncia

l lia

bilit

y

Com

mitm

ent

No

risk

Bei

ng a

ccou

ntab

le f

or a

ll de

cisi

ons

Fund

ing

Saf

egua

rdin

g ch

ildre

n

Rep

utat

ion

dam

age

22%

17%

15%

7%

12%

7% 7% 7%6% 5%

3%5% 5%

20%

5%

Top 300All charities

*Source: FWD Charity Research (May 2012)

All Charities – 100 responses. Top 300 – 41 responses.

*Source: FWD Charity Research (May 2012)

1,000,000Vacant trustee positions in England & Wales**

Enough to fill Wembley Stadium

12 times.

** Charity Commissions research 2012

Why not ask us if we can help guide you through this complex subject?

Ecclesiastical has been insuring not-for-profit organisations for 125 years.

Today, we insure thousands of the nation’s charities of all sizes and complexities – including youth and children’s

charities, pastime clubs, advice and support groups and many more. So it’s no wonder we’ve been voted best charity

insurer for the last seven years running by brokers.+

Charities name our quality of service, our value-for-money cover and understanding of the market as key reasons

why they consider us the best charity.

Speak to your broker for more information about our approach to the charity and not-for-profit sector, or visit www.ecclesiastical.com/charityinsurance to find a broker

+ Of those brokers who named an insurer in the survey, the majority named Ecclesiastical as the best insurer for insurance.

Research carried out by FWD, an independent market research company.

Ecclesiastical Insurance Office plc (EIO) Reg. No. 24869. Registered in England at Beaufort House, Brunswick Road, Gloucester, GL1 1JZ, UK. EIO is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

© Ecclesiastical Insurance Office plc 2012

@ecclesiastical ecclesiasticalgroup

Follow us at:

PD1820 1 12/13

ecclesiastical.com/news