What every new trustee should know
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This document outlines the core roles and responsibilities of trustees, including setting the organization's vision and strategy, ensuring accountability and compliance, and maintaining proper fiscal oversight. It discusses trustee liabilities and protections, noting that incorporating and obtaining trustee indemnity insurance can help reduce risks. Six key principles of good governance are described, such as understanding their role and behaving with integrity. The document provides resources for trustees and emphasizes the importance of recruitment, induction and ongoing development.
What every new trustee should know
- 1. AM2: What every new trustee should know Myles Kunzli, Consultant, NCVO Ian Joseph, Trustees Unlimited
- 2. Purpose of the Session • Outline core trustee roles and responsibilities • Outline trustee liabilities and protections • Identify the principles of good governance for the voluntary and community sector • Identify good practice in trustee recruitment and induction Answer other queries you have on new trusteeship
- 3. Governance nuts and bolts Governance is the systems and processes concerned with ensuring the overall direction, effectiveness, supervision and accountability of an organisation. Cornforth, CJ 2003
- 4. Governance and leadership Governance is about leadership and ensuring that an organisation is effectively and properly run Good Trustee Guide, NCVO Governance is not necessarily about doing, it is about ensuring things are done The Good Governance Action Plan for Voluntary Organisations, NCVO
- 5. Three key strands of governance 1. Impact focus on mission/users/beneficiaries 2. Strategic focus on organisation 3. Corporate/fiduciary focus on assets Dorothy Dalton, Good Governance: a practical guide for trustees, chairs and CEOs (NCVO 2011)
- 6. 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
- 7. Who are the trustees? Trustees have and must accept ultimate responsibility for directing the affairs of the charity, and ensuring that it is solvent, well-run, and delivering the charitable outcomes for the benefit of the public for which it has been set up Charity Commission guidance: The Essential Trustee: What you need to know
- 8. Who are the trustees? • Voting members of the governing body • Usually elected or appointed in accordance with the charity’s governing document • Entrusted with the resources (money, reputation, property, equipment) of the organisation • Operate within a formal set of rules • In a charitable company, company directors and trustees are the same people • Trustees often delegate day to day tasks to staff and/or volunteers
- 9. The essential tasks of the board • Set and maintain vision, mission and values • Develop strategy • Establish and monitor policies • Ensure compliance with the governing document • Ensure accountability • Ensure compliance with the law • Maintain proper fiscal oversight • Respect the role of staff / volunteers • Maintain effective board performance • Promote the organisation Where staff are employed: • Set up employment procedures • Select and support the chief executive
- 10. Three essential questions for a trustee 1. Why does my organisation exist? 2. Where is it going in the future? 3. Are we meeting our objects in the most effective and efficient way?
- 11. Trustee legal duties The overriding duty of all charity trustees is to advance the objects of their charity
- 12. What are the legal duties of trustees? • Duty to comply with the governing document • Duty of care • Duty to safeguard and protect the charity’s resources • Duty to act in the best interests of beneficiaries and to avoid conflicts of interest • Duty to act personally or directly • Duty to act collectively • Duty not to profit • Other statutory duties
- 13. Trustee personal liability Image: The Scream by Edvard Munch
- 14. Trustee personal liability • Governance liabilities – e.g. breach of duty under charity law • Operational liabilities – e.g. claims from third parties • Failure to comply with relevant statutory requirements – e.g. health and safety, PAYE, trade descriptions, financial services, filing requirements
- 15. Trustee liability – protection! • Incorporation (CIO, charitable company) but does not offer complete protection • Trustee indemnity insurance • Plus – – good management practices – clear roles and responsibilities – records of decisions taken – provisions in governing document – contingency funds – professional advice – board development – risk management
- 16. Six key principles of good governance An effective board will provide good governance and leadership by: 1. Understanding their role; 2. Ensuring delivery of organisational purpose; 3. Working effectively both as individuals and as a team; 4. Exercising effective control; 5. Behaving with integrity; and 6. Being open and accountable. Good Governance: A Code for the Voluntary and Community Sector
- 17. Getting Started: trustee recruitment and induction
- 18. Useful resources • NCVO governance pages: www.ncvo.org.uk • Trustees Unlimited knowledge bank: http://www.trustees- unlimited.co.uk • Charity Commission website and guidance: www.charity- commission.gov.uk • Good Governance: A code for the voluntary and community sector www.governancecode.org • NCVO’s The Good Trustee Guide (print) • NCVO’s Good Governance: a practical guide for trustees, chairs & CEOs (print)
- 19. Summary & Close • Today we covered: - trustee roles and responsibilities - trustee liabilities and protections - principles and code of good governance - good practice in trustee recruitment and induction • Final questions and comments • What will you take away to your trusteeship or board?