Trustees - The Roles, Responsibilities
and Challenges
a presentation for
Elliot Harris FCA DChA
Charities Partner
eharris@cvdfk.com
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A Balancing Act?
Steward
Current
Robust
Overview
Act in best interests
of the
charity
Internal
Regulation
Prescription
Sound Governance
“An effective charity is run by a clearly identifiable
trustee body that has the right balance of skills and
experience to run the charity effectively, acts in the
best interests of the charity and its beneficiaries,
understands its responsibilities and has systems in
place to exercise them effectively”
Use of Resources
Charity is, and will remain,
solvent
Prudence
Integrity
Only in
furtherance of
charity’s objects
Wise
Effective
Efficient
DUTY OF CARE
Wise Use of Assets
Brand
I.P
Use of funds
Investments
Other
Governing Document
Laws & Regulations
Borrowing
Land &
Property
Funds / Reserves
Current
vs
future needs
Trustees
Charity
Commission
Regular
review
Balancing
Act
State &
justify
Not defensive
Target Level
Identify
types of
funds
Reserves
policy
Understand
Definitions
Trustees’
Responsibility
Governing
document
Best practice
Charities SORP
Accounting
standards
Reporting
and Finance
Charity /
Company Law
Other
legislation &
regulations
Being Kept to Account
Accounting
records / funds
Accounting systems
& controls
Availability
Accountability
Stewardship
Governing
Document
Legal
Requirements
Timely submission
CC / other regulators
Preparation of
statutory accounts
& reports
External
scrutiny?
Reporting
Charity’s
website
Funders
Others
Charity
Commission
Timely
Transparent
Accountable
Other regulators
Summary
Information
Return
Companies House
Skills and Experience
• What skills does a group of trustees need?
– Business
– Financial
– HR
– Charity specific
• Rotation of trustees
• Constant re-assessment
Trustees’ Annual Report – In Theory
Reference &
Administrative
Information
Plans for
Future
Periods
Financial Review
Funds held on behalf of others
Clarity
Consistency
Compliance
Achievements &
Performance
Structure &
Governance
Management
Objectives &
Activities
Trustees’ Annual Report – In Practice
• Trustees’ responsibility – to own / prepare
• Trustees should ensure:
• Appropriate key messages, style and approach (particularly to members and
volunteers)
• Basic information is in place
• Key SORP 2005 categories addressed
• Clear links between the “words” and the “numbers”
• Key policy statements are in place
• Risk statement reflects reality
• Future plans – sufficient, balanced and your needs explained
• Public benefit
• File on time!
Consider use of other reporting mechanisms for specific audiences; how do
these link to the Annual Report?
Risk Management
Trustees’
Report
Opportunities
vs
Threats
Reporting
Work of charity
Major Risks
Recording
Monitoring
Identification
Evaluation
Action
Investment Policy
Set Policies
Reporting
Ethical investment
Investments
Professional
Guidance
Income or
Capital Growth
Trustee Liabilities
Compliance with
The Law
Compliance with
The Governing
document
Common sense
Liability or not?
Conflict of interest
Not just Charity
laws
Delegation and Decision-making
Record in writing
Clarity of relationship
Reporting structure
Sub-committees
Employees
Governing
Document and
legislation
Trustees
always retain
ultimate
responsibility
Disputes
Agents
Special Responsibilities
Chair & Vice-Chair
Key decisions
taken by Trustees
collectively
Hon
Treasurer
“Officers”
Role descriptions
Other designated
roles
Reminder of the Hallmarks
• Focus on impact and outcomes
• Fit for purpose
• Sound governance
• Maximises potential
• Accountable and transparent
• Flexible
Some Useful Reference Points
• Charity Commission www.charity-commission.gov.uk
• CC3 The Essential Trustee
• RS3 Trustee Recruitment
• RS7 Membership Charities
• www.cvdfk.com/charities
Trustees’ Roles and
Responsibilities
Above all remember……
A well run charity will be there long after you
are!
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