The Charity Commission (the Commission) has now issued its report and, interestingly, has concluded that the charity’s trustees acted in good faith and in what they honestly considered to be the charity’s best interests. Most trustees would consider this to be sufficient – what more could be asked of them? – but, in the world of charity governance, honesty and good faith are not the only requirements.
As well as being honest, trustees must act with reasonable skill and care when making decisions about a charity. They must consider the impact of their decisions on the charity’s reputation, beneficiaries and assets etc. A trustee might act honestly and in good faith but still deemed to have fallen short of the required standard of care.
In the case of the Presidents Club Charitable Trust, the Commission concluded that the trustees failed to:
Whilst, at this stage, the case has not resulted in any personal liability for those trustees, if such actions did result in a loss to the charity, there is potential for trustees to be liable to repay this loss from their personal funds. This is regardless of whether a charity is corporate (a charitable company or a charitable incorporated organisation) or unincorporated (for example, a trust).
Taking another example, if trustees decide to invest the charity’s money without the appropriate independent professional investment advice, resulting in serious loss to the charity, then the trustees' honesty and good faith will not stop them from being personally liable to repay that money to the charity (if they could not recover it) from their personal funds.
The lesson here is that good faith and honesty are not sufficient for charity trustees. They need to be aware of all their duties as trustees and how to act with reasonable skill and care while running the charity. It is important for trustees to look at their charity and its specific circumstances to consider how best to manage the risks.
We regularly provide interactive training for charity trustees with case studies based on the specific circumstances of their charity. If this would be of interest, please do not hesitate to contact Edwina Turner.
We have been working with care homes to update their contracts and advise on the risks of charging the resident a regular “top-up” or additional fee where a resident is funded through NHS CHC
The parliamentary processes are complete and the Restriction of Public Exit Payments Regulations 2020 (“the Regulations”) which cap exit payments in the public sector at £95,000 will be in force from 4 November.
As the UK’s social housing sector recovers from the initial Covid-19 outbreak and lockdown, now is the time to focus on the challenges that may emerge next.
There is no universal approach to regenerating town centres. However, housing must be considered a key part of any regeneration project – providing well-needed new homes and economic growth.
Friday 16 October marks the 6th annual Wear Red Day in England, Wales and Scotland. Wear Red Day is the brainchild of the charity; Show Racism the Red Card (SRTRC). SRTRC aims to educate young people so they are equipped to recognise and challenge stereotypes, misconceptions and negative attitudes towards race.
Alongside the Building Safety Bill published in July 2020, the Fire Safety Bill is a key step in the Government’s strategy to improve building and fire safety in the wake of the Grenfell Tower tragedy
Government regulations came into force on 23 September 2020 providing LGPS (local government pension scheme) employers with flexibility on meeting exit payments and LGPS funds with flexibility too
Charity Financials, the financial information program from Wilmington Charities, has published its latest Income Monitor report.
As employers face the end of the Coronavirus Job Retention Scheme on 31 October 2020, Katherine Sinclair and Libby Hubbard discuss the intricacies of the redundancy process for furloughed employees.
We have learned many things over the last six months; the latest lesson is that there is no new normal. The Government initiatives and guidance may have slowed down a pace, but the challenges for employers and their employees remain.
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