Managing how trustees of charities carry out their responsibilities is essential, and yet there are many complexities around the task, as this article demonstrates.

The role of trustees when charities are concerned is central and yet sometimes the role can be misunderstood; also, trustees can make mistakes, or worse. There’s a need for trustees to be managed and held to account.

Benjamin James is head of charities at McCarthy Denning, a London law firm, and chair of trustees of Adoption Focus and Dartmoor Zoological Society. James explores management of trustees and their role. The editors are pleased to share these thoughts with readers and invite responses. Email tom.burroughes@wealthbriefing.com

Charity trustees are entrusted with a great deal of responsibility. There are reams of guidance and regulations setting out what is expected from a charity trustee and each trustee is expected to read, and be on top of it all. 

If something goes wrong and a charity trustee has not performed to the level expected, the Charity Commission can remove a trustee and in some cases impose a ban preventing that person from being a charity trustee. However, it is important that charities do not let it get to the position whereby the Charity Commission is required, or wishes, to intervene.

Most charity trustees are scrupulously honest and diligent, reading all of the papers sent to them, attending meetings, reviewing the finances and making sure that the charity entrusted to them operates to the best of its ability. However, sometimes things go wrong, this can include:

• a trustee not coming to meetings;

• a chair running the charity as a fiefdom and not consulting trustees;

• inappropriate relationships between trustees and employees of the charity or harassment;

• a trustee falsifying expenses;

• a trustee developing dementia; and 

• a trustee being arrested or questioned by the police in relation to an offence.

Some of the potential issues that can occur are very serious and others are more minor, but all have to be handled appropriately with care. Most will be managed by clear policies being established by the charity, effective chairing and the Articles of Association. However, there can still be surprises.

When lawyers draft a charity constitution they usually make sure that they put in some standard provisions to protect the position of trustees, including automatic termination if a trustee is absent without permission from all of the meetings in a 12-month period, there are also provisions dealing with convictions and a ban from being a trustee. 

For the less serious issues, trustee appraisals are as important as employee appraisals. It is important that trustees are reviewed on a regular basis by the chairperson and that the vice-chairperson or the CEO review the work of the chairperson. If these are undertaken with self-awareness and if all parties are open and wish to learn from the process, most issues can be settled at an early stage, a reminder to read the papers in advance and a firm request to attend meetings.

It is also important that no one person exercises excessive control, it is important that everyone and everything is considerately questioned. Why did a trustee pay themselves £500 ($655.7) in expenses? This was probably a simple reimbursement, but in this case a policy needs to be reviewed to ensure that the trustee does not have this power and to ensure that next time the payment is authorised by another trustee. If the chairperson is too domineering steps need to be taken to make them aware of the concerns.  It is also important to ensure that the people are not automatically re-elected to office, if you have concerns make sure that they are expressed.

If you are the chairperson, it is important to think about the effect you have on others, it is important to lead and to exercise appropriate control, but a dictatorship will be bad and this must be avoided. Regular elections, speaking to the trustees about your performance and to absent yourself from discussions about re-election are all important. If there are issues, it may be that a small adjustment is needed to regain harmony.

There comes a time that everyone has to leave. Hopefully you have the self-awareness to know when it is your time. If not it is sometimes necessary for others to make the decision. Always act with consideration and compassion, think how you would like to be treated in the same circumstances. Make sure that there are full discussions and support those that need to lead the decisions. Ignoring issues does usually lead to them getting worse, so this should be avoided and if you believe that action is needed speak out. 

Ensure that you review your polices and have clear procedures for trustee appraisals and how to deal with non-performance. Deal with issues early and make sure that you work together as a board in a supporting and collegiate environment.