01 December 2014
The Charity Commission has launched a consultation on an updated draft of its guide to trustees’ duties: the essential trustee (CC3).
The new draft follows recent commission guidance on decision-making and conflicts of interest. The consultation is running until February, and the responses will shape the final version of the guidance.
The most significant change is a new explanation of what the commission expects of trustees. Current guidance distinguishes between legal requirements (what trustees ‘must’ do) and minimum good practice standards that are not legal requirements (what trustees ‘should’ do).
The regulator has stated it wants to make clearer its expectation that trustees comply with specified good practice unless they can justify not doing so (for example by complying in a different way). While the regulator will still recognise where trustees have made an honest mistake, trustees who fail to follow the specified good practice are at risk of breaching their legal duties.
If trustees do not follow the specified good practice: the commission may ask trustees to explain and justify their decision; trustees may struggle to comply with their legal responsibilities; if something goes wrong as a result, trustees may be in breach of their legal duties and held responsible for any loss the charity incurs; and the commission may treat this as evidence of misconduct or mismanagement.
Other changes to CC3 include: links to other guidance to avoid repetition; reflecting the commission’s current position and priorities as charity regulator; highlighting what can go wrong and how to avoid it; and emphasising that the guidance is for all charity trustees, not just trustees of registered charities.
Jane Hobson, Head of Policy at the Charity Commission, said: The changes to our ‘Essential trustee’ guidance aim to make things clearer for trustees, and help them govern their charities better. It’s vital that trustees understand what we expect of them, and the revised guidance provides a clear, succinct and up to date picture. Trustees’ basic legal responsibilities have not changed, nor has our role as regulator. The changes around “must” and “should” should not affect most charity trustees, who already take their role seriously. It’s a case of trustees understanding that “should” means “really should” - not “maybe, if you feel like”.’
The commission is holding discussions with stakeholders about these changes and is keen to hear views from anyone with an interest in the governance of charities, as well as trustees and charities.
The closing date for responses to this consultation is 17 February 2015.