Trustees - The Roles, Responsibilities and Challenges

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Elliot Harris FCA DChA Charities Partner [email protected]

www.cvdfk.com

A Balancing Act?

Steward Robust Current Overview Act in best interests of the charity Internal Regulation Prescription

Sound Governance

“An effective charity is run by a clearly identifiable trustee body that has the right balance of skills and experience to run the charity effectively, acts in the best interests of the charity and its beneficiaries, understands its responsibilities and has systems in place to exercise them effectively”

Use of Resources

Charity is, and will remain, solvent Only in furtherance of charity’s objects Prudence Integrity Wise Effective Efficient

DUTY OF CARE

Wise Use of Assets

Brand I.P

Other Borrowing Use of funds Governing Document Laws & Regulations Investments Land & Property

Funds / Reserves

Current vs future needs Trustees Charity Commission Regular review Balancing Act State & justify Not defensive Target Level Identify types of funds Understand Definitions Reserves policy Trustees’ Responsibility

Best practice Charities SORP Reporting and Finance Governing document Charity / Company Law Accounting standards Other legislation & regulations

Being Kept to Account

Accounting systems & controls Accounting records / funds Availability Accountability Stewardship Governing Document Legal Requirements Timely submission CC / other regulators Preparation of statutory accounts & reports External scrutiny?

Reporting

Charity’s website Charity Commission Funders Others Timely Transparent Accountable Other regulators Summary Information Return Companies House

Skills and Experience

• What skills does a group of trustees need?

– Business – Financial – HR – Charity specific • Rotation of trustees • Constant re-assessment

Trustees’ Annual Report – In Theory

Plans for Future Periods Reference & Administrative Information Financial Review Funds held on behalf of others Clarity Consistency Compliance Structure & Governance Management Achievements & Performance Objectives & Activities

Trustees’ Annual Report – In Practice

• Trustees’ responsibility – to own / prepare • Trustees should ensure : • Appropriate key messages, style and approach (particularly to members and volunteers) • Basic information is in place • Key SORP 2005 categories addressed • Clear links between the “words” and the “numbers” • Key policy statements are in place • Risk statement reflects reality • Future plans – sufficient, balanced and your needs explained • Public benefit • File on time!

Consider use of other reporting mechanisms for specific audiences; how do these link to the Annual Report?

Risk Management

Trustees’ Report Reporting Opportunities vs Threats Work of charity Major Risks Recording Monitoring Identification Evaluation Action

Investment Policy

Reporting Professional Guidance Set Policies Ethical investment Investments Income or Capital Growth

Trustee Liabilities

Common sense Compliance with The Law Compliance with The Governing document Liability or not?

Conflict of interest Not just Charity laws

Delegation and Decision-making

Record in writing Clarity of relationship Reporting structure Governing Document and legislation Sub-committees Trustees always retain ultimate responsibility Disputes Employees Agents

Special Responsibilities

Chair & Vice-Chair Key decisions taken by Trustees collectively “Officers” Role descriptions Hon Treasurer Other designated roles

Reminder of the Hallmarks

• Focus on impact and outcomes • Fit for purpose • Sound governance • Maximises potential • Accountable and transparent • Flexible

Some Useful Reference Points

• Charity Commission www.charity-commission.gov.uk

• CC3 The Essential Trustee • RS3 Trustee Recruitment • RS7 Membership Charities • www.cvdfk.com/charities

Trustees’ Roles and Responsibilities

Above all remember…… A well run charity will be there long after you are!

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