At this week’s Wales Charity Law Conference, I had the pleasure of listening to a talk from Dorothy Dalton, who was introduced as the editor of Civil Society’s ‘Governance’ magazine. It was inspired programming by the conference organisers, the WCVA, as this was the first talk after lunch – the so-called ‘graveyard slot’ – but one that was so good that I was scribbling notes and tweeting right the way through as I didn’t want to miss anything.
Dorothy obviously has such a vast knowledge and experience in this area that the information, advice and examples just flowed throughout her 50 minute talk. She shared 8 top tips for us to apply to our governance and I will share them all over a series of blogs.
Her first top tip:
“Understand the role, responsibilities and liabilities of board members and understand what governance is all about”
In this day and age with so much legislation, good governance is so important – including the board understanding their role, but the horrifying statistic is that 80% of board members are not sure of what their role is!
The expectations of Trustees are:
- to act only in the interests of the charity
- to be involved in major decisions and to take decisions jointly with other Trustees
- not to benefit
To expand a little on the decisionmaking point – it means that you must attend meetings. Some Trustees, not liking decisions they thought likely to be taken, didn’t attend meetings for several months, believing that this would enable them to be absolved of any blame for the decision made. This is not the case, and if you are a Trustee, then you are obliged to attend meetings and share your view, arguing as strongly as you like in the Board meeting, but then publicly supporting democratically made decisions whether you agree with them or not. It is also important to ensure that you have the relevant skills around the table to ensure that everything that needs to be considered when making decisions is laid on the table.
Trustees are only at risk of personal liability if they:
- cause loss to the charity by acting unlawfully, imprudently or outside the governing document
- in unincorporated charities commit the charity to debts amounting to more than their assets (take care with pension fund deficits)
- in charitable companies continue to operate when they know – or ought to know – that they cannot avoid insolvent liquidation
Trustees – if you are unsure of exactly what your role requires, find out. There is excellent information on the Charity Commission website, and I will be more than happy to help if you need it.
Dorothy gave us some excellent governance tips. We would do well to note them and keep to them. More tips in the next blog!