Trustee Conference AM2: What every trustee should know

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What every trustee should know: understanding your roleDan Francis & Emma HerbertGovernance Consultants NCVO

Leona Roche Senior Associate and Joint Head of Faith-Based OrganisationsBWB 7 November 2016Partner sponsor:Media partner:

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Context of trusteeship and sector Role of a trusteeLegal dutiesLiability and legal forms Good GovernanceOpportunity for any questions

What We will cover

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Trusteeship in context quiz

Match the statement with the number?

Trusteeship in context quiz

StatementNumberNumber of charities 57Total annual income of the UK voluntary sector in billion 162,965 % of voluntary sectors income derived from individual donations and purchases 83% of the total number of charities with an annual income of under 100,00044Number of voluntary sector paid workforce 35Number of trustee board positions27 Average age of a trustee43.8% of trustees under the age of 24945,769 % of the UK adult population who volunteered at least once a month during 2013/140.5 % of 16 25 year olds in the UK who volunteered at least once a month during 2013/14827,000

Trusteeship in context quiz: Answers

StatementNumberNumber of charities 162, 965Total annual income of the UK voluntary sector in billion 43.8% of voluntary sectors income derived from individual donations and purchases 44% of the total number of charities with an annual income of under 100,00083Number of voluntary sector paid workforce 827,000Number of trustee board positions945,769Average age of a trustee57% of trustees under the age of 24 0.5% of the UK adult population who volunteered at least once a month during 2013/14 27% of 16 25 year olds in the UK who volunteered at least once a month during 2013/14 35

Micro Under 10,000 Small 10,000 to 100,000 Medium 100,000 to 1 millionLarge 1 million to 10 millionMajor 10 million to 100 millionSuper-major> 100 millionProportion of number and income of organisations by size 2013/14 (%)

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charity Income 7

Unless another accounting framework or alternative SORP applies

Thresholds10,000 charity reg

basic audit threshold1M 7

Current Challenges

Charity governance in the news 9

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WHO ARE THE TRUSTEES?The persons having the general control and management of the administration of a charity.

Section 177 of the Charities Act 2011

Voting members of the governing bodyUltimate legal responsibility for the charityA collective group of decision makers Elected or appointed in accordance with the charitys governing documentOperate within a formal set of rulesIn a charitable company, company directors and trustees are the same peopleTrustees often delegate day to day tasks to staff and/or volunteersAlmost always unpaid

Who are trustees?

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What does the term Charity mean? 12To be a charity an organisation must be set up with purposes which are exclusively charitableWhat constitutes a charitable purpose is defined in the Charities Act 2011 In order to be a charity your purposes must meet the public benefit requirementWe prove this by requiring charities to report annually to the regulator on how they have deliver their purposeThis is all about trust and confidence

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Key Legal DutiesCC3 The Essential Trustee

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Charity Commission (2015) CC3: The essential trustee: What you need to know, what you need to do

Each group will be allocated a legal duty to consider.

For the legal duty think about

What trustees can do to ensure they meet this legal duty?

and

Times you think this legal duty may be challenged and how trustees should deal with this?

charity structures and trustee liability

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COMPARISON OF LEGAL FORMS17

Charitable Trust Charitable Unincorporated AssociationCharitable company limited by guarantee (CLG)Charitable incorporated organisation(CIO)UnincorporatedIncorporated

Governance liabilitiese.g. breach of duty under charity lawOperational liabilitiese.g. claims from third partiesFailure to comply with relevant statutory requirements e.g. health & safety, PAYE, trade descriptions, data protection

Trustee personal liability

Incorporation (CIO; company limited by guarantee) but does not offer complete protection Plus trustee indemnity insurancegood management practicesclear roles and responsibilitiesrecords of decisions takenprovisions in governing documentcontingency fundsprofessional adviceboard developmentrisk management

Trustee liability protection!

CHARITY COMMISSIONS VIEW20The Charity Commission expects trustees to take their responsibilities seriously... The Commission recognises that most trustees are volunteers who sometimes make honest mistakes. Trustees are not expected to be perfect they are expected to do their best to comply with their duties. Charity law generally protects trustees who have acted honestly and reasonably.

Charity Commission (2015) CC3: The essential trustee: What you need to know, what you need to do

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Good Governance

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Six key principles of good governanceAn effective board will provide good governance and leadership by:understanding their roleensuring delivery of organisational purposeworking effectively both as individuals and as a teamexercising effective controlbehaving with integritybeing open and accountable.

Good Governance: A Code for the Voluntary and Community Sector, 2010

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NCVO: www.ncvo.org.uk/practical-support/governanceNCVO Consultancy and training: https://www.ncvo.org.uk/training-and-eventsKnowhow Nonprofit: http://knowhownonprofit.orgGood Trustee Guide, 6th ed, NCVO 2015BWB booklet: http://www.bwbllp.com/knowledge/2015/05/08/duties-of-charity-trusteesCharity Commission website: www.charity-commission.gov.uk and the core guidance - The Essential Trustee: What you need to knowGood Governance: A Code for the Voluntary and Community Sector and supporting material: www.governancecode.org Useful resources

Thanks Dan.francis@ncvo.org.ukEmma.Herbert@ncvo.org.ukL.Roche@bwbllp.com

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