New guidance for charity trustees on the way

Recent consultation outlines new approach to the role of trustees but does this act as a deterrent?

Posted by Graeme Hughes

Graeme Hughes is a solicitor in the Charities and Social Enterprise Department at Brabners LLP.

  • T: 0151 600 3079
Wed 15th, Apr

Towards the end of November last year, the Charity Commission published a consultation on a replacement for its core guidance for trustees, “CC3, The Essential Trustee”.

The consultation ran until February of this year. 114 responses were received.

Putting that into context, there are approximately 165,000 charities registered with the Commission as well as an estimated 190,000 unregistered charities (exempt or excepted from registration). There are an estimated 900,000 charity trustees in England and Wales. Approximately 40 of the 114 respondents to the consultation identified themselves as being trustees.

Of the 114 responses, 53 said the guidance was an improvement on the existing CC3. The Charity Commission has taken the view that the results of its consultation demonstrate that the revised guidance is “overwhelmingly welcomed by the people for whom it is designed – trustees”. It is not entirely clear how a response rate amongst trustees of less than 0.05% corresponds with this view.

Despite the Commission’s upbeat mood, the guidance was not universally liked. Umbrella organisations such as NCVO, the Association of Charitable Foundations and the Charity Finance Group have been critical of the revised guidance stating that it “takes an excessively prescriptive tone in various sections, and misrepresents the scope and nature of the duties that in fact apply to trustees”.

Particular concerns have been raised in relation to the Commission’s approach to the distinction drawn between the “must do’s”, being legal requirements; and the “should do’s”, which are simply standards of good practice.

In the existing guidance, “must” means legal requirements that charities or trustees have to abide by. “Should” means good practice that they should follow unless there is a good reason not to.

In the revised CC3, “should” now means good practice that trustees are expected to follow. Trustees are warned that if they do not follow the stated good practice they may be in breach of their legal duties, and be guilty of misconduct or mismanagement.

In relation to this, the Commission has stated that trustees need to understand “that ‘should’ means ‘really should’ - not ‘maybe, if you feel like it’”.

In addition to this, concerns have been raised as to the negative tone of the revised guidance and the impact that this may have on the numbers willing to become charity trustees.

The final version of the guidance is expected in the summer,

Comment:

The Commission has a very difficult job putting together accurate, concise and readable guidance on matters behind which there are a great many legal principles, cases and pieces of legislation. However, the publication of such guidance is a key element in the delivery of its general functions, as set out in section 15 of the Charities Act 2011.

The Commission has moved away from providing charity trustees with advice and has now positioned itself as the sector’s “policeman” and the revised CC3 is a further indication of the very different regulatory landscape.

The new regulatory powers to be introduced by the Protection of Charities Bill will reinforce the Commission’s position further and it will be interesting to see the effect of this on the numbers of both trustees and charities.

40 responses from charity trustees to the Commission’s next consultation might represent a much better return.

If you would like to discuss any of the points raised in this blog, please do not hesitate to contact Graeme on 0151 600 3079 or graeme.hughes@brabners.com.

Read More
Leave a comment

Why now is the right time to take IoT seriously

Mon 27th, Jul

Guest blog by Alan Nunn – Communications Subject Matter Expert at CGI

How IoT can create a sustainable future for water

Mon 27th, Jul

Guest blog by Graham Hainsworth – Director Consulting in CGI’s Water Sector Business

Happy 9th Birthday 6th Door Ltd

Tue 19th, May

As I’m leaning on the stand-up desk in my makeshift home office, that over the weeks has been turned into a video and podcast recording studio

How to take back control of your water costs

Fri 13th, Mar

While most businesses already have a comprehensive strategy in place for their electricity and gas consumption, water management is often overlooked.

How to choose an energy consultancy

Fri 13th, Mar

Most business owners recognise the advantages of shopping around for the best energy deal, but without the time, resource and expertise to find the best tariff, it can be an almost impossible task.

Business energy: Don’t get caught out by rollover rates

Fri 13th, Mar

As a busy business owner, you may feel there are not enough hours in the day to secure your next energy contract. You know you’ll get around to it, but when you’ll get around to it is another matter.

Business water matters – Top 3 water saving tips

Fri 13th, Mar

Water is often referred to as ‘the forgotten utility’. While many large businesses are clearly focussed on their comprehensive energy strategies, it seems many are yet to implement a strategy around managing their water usage.

Know where your cloud data is stored or risk a GDPR fine

Thu 27th, Feb

For businesses who have chosen cloud-based data hosting services there’s a temptation to relax and think “great, we’re paying someone else to take care of our data, we don’t need to worry about it any more.”

Transparency plans could slow down region’s business growth

Thu 27th, Feb

Efforts by regional start-up initiatives that have led to Merseyside outperforming the rest of the UK when it comes to business growth could be hampered by new government proposals, a leading legal expert has claimed.

Backup or risk losing your business

Thu 13th, Feb

Maintaining a robust backup is hard work, it’s important to not only build the correct solution for your business and trust your IT support provider to look after it, but to also maintain a sense of urgency as a business owner to...