Checklist for charity trustees

Charity trustee duty: Act in the interests of the charity.

Good practice checklist:

• Does our constitution allow the charity trustees to be in control of the administration of the charity, independently determine the charity’s strategy and manage its governance?
• Where our charity is linked to another body, is there an arm’s length process for the assumption and removal of charity trustees?
• How many of our charity trustees owe a duty to any other body and will this cause a significant, or inherent, conflict of interest?
• Where some of our charity trustees owe a duty to another, linked, body, do we have an independent Chair?
• Have we ensured that we not only act independently when making decisions, but also are seen to be acting independently? For instance, do we hold our meetings separately from those of any other body, have an independent website and independent financial records?
• When considering funding or service agreements, are we able to say ‘no’ if we do not consider a proposal to be in the overall best interests of the charity?
• When considering any contract or property arrangement, are these on fair terms for the charity?
• Do we have a conflict of interest policy for all potential and actual conflicts of interest that will safeguard the interests of the charity?
• Is this policy observed and clearly documented so that charity trustees can demonstrate their decisions have been taken in the best interests of the charity?

Charity trustee duty: Seek to ensure that the charity acts consistently with its purposes.

Good practice checklist:

• In every decision we take, are we sure this will result in our charity acting in a way which is consistent with its charitable purposes?
• Will any proposed project, contract or partnership agreement result in our charity acting in a manner that is not consistent with its charitable purposes?
• Do any of the terms of our contracts or business arrangements restrict us from making decisions on future plans or on how best to fulfil our charitable purpose?

Charity trustee duty: Act with care and diligence in managing the charity’s affairs.

Good practice checklist:

• Does our constitution make it clear who’s in charge of the charity and does everyone understand who the charity trustees are, and that they are responsible for the charity’s decisions?
• Does the charity’s board have the right mix of skills and experience to manage its affairs well and was this considered in the appointments process?
• Do we have clear and robust lines of authority for projects? Do all staff and charity trustees understand these? Is it clear that the ultimate responsibility for any project remains with the charity trustees?
• Are we reviewing our constitution and any delegated powers as frequently as necessary to ensure these remain up to date and consistent with the way we operate?
• If we have a branch structure, are the arrangements among different bodies established clearly, in writing and understood by all concerned?
• Do we take independent financial or legal advice when we consider such a step to be appropriate, such as when taking a decision on a matter that poses significant risk to the charity?
• Are we risking or spending any charitable assets for noncharitable purposes, whether through contracts, investments in subsidiaries or disposal of assets?

Charity trustee duty: Manage conflicts of interest between the charity and anyone who has a role in the appointment of its charity trustees.

Good practice checklist:

• Does our conflict of interest policy acknowledge the existence of possible conflicts with those who have a role in the appointment of charity trustees?
• Does it expressly provide that such conflicts must be disclosed and that any charity trustee with such a conflict must refrain from participating in any deliberation or decision of the charity on the matter?
• How many of the charity trustees owe a duty to another person who has a role in their appointment and will this cause a significant, or inherent, conflict of interest?

Charity trustee duty: Ensure that any breach of duty is corrected and not repeated and that any charity trustee in serious or persistent breach is removed.

Good practice checklist:

• Are all of the charity trustees aware of and fully informed about their legal duties towards the charity?
• Do we have a mechanism to remove a charity trustee who is in breach of their duties?
• Are we reviewing our constitution and any delegated powers as frequently as necessary to ensure these remain up to date and consistent with the way we operate?