Trustee Training

With over 300,000 charities in the UK (over 190,000 on the Charity Commission register) and some one million trustees, charities come in all shapes and sizes covering a multitude of activities, sectors, programmes and disciplines. All however have an overarching theme - to make a difference.

However, it is not unusual for trustees of charities to wonder why they ever volunteered for the task. Solicitors are in demand because of the skills and knowledge they can bring to the organisation, but many are shocked to learn that they are jointly liable for any decision made by the Board. This can leave many trustees feeling out of their depth.

What makes the role of trustee even more daunting is the fact that charities are subject to external scrutiny like never before. Information can be obtained from the internet or the regulators and is often used to set up separate web pages on a charity and provide feedback or other assessment of its activities, finances and accounts. The overall scrutiny from the public, the press and the Charity Commission is on the increase. This is something to be conscious of. A recent development has seen the Charity Commission website upgraded to now provide details of trustees, and their other trusteeships for example.

Difficult balancing act

As the regulator of charities in the UK the Charity Commission has a difficult balancing act. The Commission must be robust in bringing to task those who misuse the privilege of charitable status, while 'hand-holding' those charities and trustees who are uncertain of their responsibilities and duties. The Commission is very good at doing this, which is good news for trustees.

One area where the Charity Commission has been keen to promote best practice is governance. They have issued several publications on this looking at what every trustee should know. In 2002 it also issued a study on trustee recruitment, induction and training to highlight the importance of recruiting the right calibre of trustee and ensuring they are inducted properly into the background of the charity, its activities, funding, staff and operations.

As a trustee it is essential that you receive sufficient information about the charity and its structure, plans, strategy, budget etc before you join. Ask to sit in on one trustee meeting before you take a final decision '“ see how the other trustees interact, assess what you could bring to the table and whether you feel that you could contribute in other ways.

Having been inducted, many trustees bring to the table a particular specialism, either in the field of operations conducted by the charity or a professional experience that is needed for its effective running/decision making. Solicitors would come under the latter. It must also be borne in mind that although a trustee may have a particular specialism, the board acts as a whole in its decision making. It should always take relevant advice from external advisors where necessary and not be overruled or forced into a decision by a particular individual or group of trustees. Trustees are well advised not to agree to something if they do not fully understand the risks and consequences of the decision.

This is not an uncommon scenario however '“ trustees accept the view of 'specialists' on the board. Where such experience is not available, trustees need to take appropriate professional advice.

Overwhelming regulation

Trustees are often overwhelmed by the new set of responsibilities foisted on them. Take for example the complexity of systems and controls that charities should have in place for the effective running of their finance function. With general funds, restricted funds, permanent endowments, expendable endowments, conduit funding etc, charity accounts are often complex. They also have different accounting treatments depending on the income fund type and must comply with a Statement of Recommended Practice (SORP), when preparing their year end accounts. You need professionals in post to ensure that the transactions are accounted for properly. In many smaller charities, the finance team resources can be limited. In the current climate 'trust' in charities, or the charities staff, needs to be balanced with an appropriate blend of vigilance through segregation and control.

From a legal perspective, the increase in legislation is often overwhelming and some have arguably had unintended consequences for the charity sector. Legal issues for trustees include:

- Do you operate the right structure for your charity?

- Do you need a trading subsidiary?

- Should you be registered for VAT?

Employment law is a minefield, and now we have the Corporate Manslaughter and Homicide Act '“ if you are an incorporated charity, this piece of legislation applies to you event though you are also a charity.

Preparation is key

The Charity Commission now require charities to disclose the level of training trustees receive each year. For a charity without the 'specialists on board', courses can often be expensive and time-consuming.

All trustees ought to undertake an educational programme in order to prepare them fully for the role. At haysmacintyre we teamed up with two other professional bodies over five years ago to develop a series of trustee training sessions to ensure that trustees are up to date on their legal responsibilities, accounting requirements, managing funds, as well as other areas of topical interest. With trustees in short supply, I believe it is important that this type of guidance is readily available to those who are committed and keen to make a difference, but are apprehensive of the risks involved.

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