The role of a charity trustee has been very much in the spotlight recently, with some controversial media stories featuring high profile celebrity trustees, e.g. Prince Harry and Naomi Campbell. This emphasises the challenges involved in fulfilling the duties of a trustee responsible for running a charity.
In Scotland, the Charities and Trustee Investment (Scotland) Act 2005 sets out certain legal duties that charity trustees must fulfil. They must:
- act in the interests of the charity;
- seek, in good faith, to ensure that the charity acts in a manner which is consistent with its charitable purposes;
- act with the care and diligence that it is reasonable to expect of a person who is managing the affairs of another person;
- disclose any conflict of interest that may arise and refrain from participating in any deliberation or decision of the other charity trustees with respect to the matter in question; and
- ensure that the charity complies its legal obligations, particularly its obligations under the 2005 Act.
Trustees of charitable companies are also subject to Directors’ duties set out in the Companies Act 2006, which are similar to the above duties e.g.:
- a duty to act in good faith in the best interests of the company
- a duty to exercise skill care and diligence
- a duty to promote the best interests of the company
- a duty to avoid conflicts of interest
- a duty not to accept a benefit from third parties conferred as a result of their position as director
The above list highlights the serious responsibility placed on any charity trustee, and the fact that all trustee duties are founded upon the principle that the charity trustee will always be able to put the interests of the charity before their own.
Charities must ensure that appropriate training and support is provided to ensure that trustees understand their duties. Further, it is important that charities have appropriate governance structures in place which flow from their charity’s constitution, including policies and procedures which underpin the above duties and allow the charity to take action if a trustee is not acting in accordance with them.
We have extensive experience in advising charities. If you have any questions about being a charity trustee, please contact our team.
