Charity Commission Update: CC3 The Essential Trustee

The Charity Commission published an updated guide for Trustees in July 2015: ‘The Essential Trustee’ which discusses trustees’ core responsibilities. Notable changes include:

• The guidance is now structured so that each chapter examines one of eight core trustee responsibilities. The chapter headings are as follows:

1. Who can be a trustee and how trustees are appointed
2. Ensure your charity is carrying out its purposes for the public benefit
3. Comply with your charity’s governing document and the law
4. Act in your charity’s best interests
5. Manage your charity’s resources responsibly
6. Act with reasonable care and skill
7. Ensure your charity is accountable
8. Reduce the risk of liability

• There is a new section titled ‘what to consider when recruiting trustees’ which encourages charities to think about the skills and experience of the current trustees, the eligibility of new trustees, ensuring new trustees do not have serious conflicts, putting procedures in place to manage such conflicts and helping trustees to understand their responsibilities and the charity’s work.
• There is practical guidance on ensuring that the charity always acts in accordance with its purpose. This covers understanding the charity’s objects and powers, public benefit, planning and reviewing the charity’s work and updating the charity’s objects where necessary.
• There is a new section on managing risk which encourages charities to implement a risk management model which it suggests covers the following:

1. establish a risk policy
2. identify risks (what could go wrong)
3. assess risks (how likely is it, and how serious would it be)
4. evaluate what action to take (e.g. avoid it, transfer it, insure against it, accept it)
5. review, monitor and assess periodically

Budgeting, income generation, managing funds/property and staff and volunteers are also discussed.

• The updated guidance includes advice to trustees acting with reasonable care, including taking advice when required.
• There is additional guidance on accountability to people with an interest in the charity which encourages charities to review their compliance and good practice using a governance code, quality standard, benchmarking and an independent review. There is a further section on trustees and delegation which gives a number of safeguards to consider in relation to any delegated authority.
• There is a much more comprehensive breakdown of trustees’ personal liability, liability to third parties, criminal liability and how to reduce the risk of personal liability.

The full updated guidance can be read here: https://www.gov.uk/government/consultations/the-essential-trustee-cc3-new-version

If you are interested in hearing about how we might be able to deliver trustee training for your board, then please contact our charity law experts on 01895 207809 or email charities@ibblaw.co.uk.