Making trustee boards a success

Trustees are the guardians and ambassadors of their charity’s purpose and mission, overseeing the management, strategic direction and compliance. But they are also volunteers. Many bring with them key professional skills, others will learn whilst they are on the job. As the charity progresses over time and as there are more governance and compliance issues to navigate it may be necessary to add to the skills and diversity of the board.

Trustee boards do need to be the most skilled and diversified so they can be the most effective, but many charities are struggling to attract and retain trustees. In 2024 the NCVO (National Council of Voluntary Organisations) reported that 4 out of 5 charities had at least one board position open and 1 in 10 charities have at least four board positions open. This has a huge impact on a charity’s ability to perform effectively and it can lead to examples of poor governance and decision making.

The recent and high-profile Charity Commission investigations and subsequent action on trustee failures in The Captain Tom Foundation and Fashion For Relief situations highlights once again the importance of having experienced and skilled trustees who understand their duties and will act accordingly.

Trustee duties

The six main duties of a trustee are to:

• Ensure the charity is carrying out its purposes for the public benefit.
• Comply with all the charity’s governing document and the law.
• Act in the charity’s best interests.
• Manage the charity’s resources responsibly.
• Act with reasonable care and skill.
• Ensure the charity is accountable.

By having the correct skills and diversity, trustee boards will be in a better position to ensure these duties are carried out correctly.

Depending on the size of the charity, the skills and experience needed by the board are:

• Finance.
• Legal.
• HR.
• Technology including artificial intelligence.
• Marketing, communications and public affairs.
• Equality, diversity and inclusion skills which help a board to stay informed relatable and relevant to the challenges ahead.
• Knowledge in the relevant specialist sector.

Diverse boards and teams are proven make better decisions as they have trustees who bring different perspectives, lived experiences, education, work experience and they tend to be more fact focused, and analyse information and make more innovative decisions.

It’s also important for a charity to be true to its purpose and values, so if the charity says that social purpose and inclusivity are important to it and its values, then it’s important that this is reflected in the employees, leadership and trustee board. This is how the charity lives its values and purpose, and the board should reflect this so that disadvantaged, marginalised and minority groups can have confidence in the leadership.

A way to understand more about this is to carry out a diversity audit of the existing board which can help to spot and recruit to fill any gaps. It can reveal things that may not always be visible or obvious, but which might be holding the charity back. Some existing trustees might not want to disclose some of the information, so perhaps it can be collected anonymously. The results can help to focus attention and prompt action to improve skills, and if it is needed, to increase diversity.

Diversity factors

Diversity brings together many people and the key factors to consider are:

• Age.
• Gender.
• Disability.
• Neuro divergence.
• Personal background and education.
• Socioeconomic group.
• Lived experiences etc.

The point being, if a charity only recruits people who are alike and think alike, then it won’t make progress or have a 360 degree understanding of society.

A recent poll of charity trustees which covered some of these issues highlighted that:

45% of charities do carry out a skills audit of the trustee board when recruiting new trustees, which is encouraging; 25% carried one out less than 2 years ago; 12% carried one out between 2-4 years ago; 3% carried one out more than 4 years ago; and 15% had never carried one out.

A skills audit should be carried out before recruiting new trustees or every year, because it will be impossible to know with certainty how individual trustees have developed over time and the board can respond faster when recruiting new trustees by knowing the gaps. And the board members might also be able to identify and approach people who can add value when they meet them.

Running meetings

When running meetings and decision making it is important to be aware of what makes for good and bad meetings and decision making.

It’s important to remember that all trustees are jointly responsible for all decisions made, even if they didn’t attend the meeting. They are also responsible if they have had to step out of meeting, perhaps where a conflict of interest has been identified.

Sub-committees can be useful for projects or in larger charities, but they should report back to main board to ratify or document and approve a decision. All decisions should be noted down so that they can be explained later if the need arises, and the board is ultimately responsible for all decisions. Confidential issues should still always be minuted, and if a member of the admin team must step out for this part, one of the trustees should take over recording the minutes and these must be held confidentially.

This protects the trustees and explains why the decision was made and why it was in the best interests of the charity, so it is important to ensure there are sufficient details in the recording of it.

If the board has or is planning to make changes to how it holds meetings then it is important to check governing document for the rules on holding meetings. If the changes are not covered in the governing document, then it is recommended that this is updated to cover virtual and hybrid meetings within the definition.

Also include where appropriate other types of decision making when for reasons of speed and efficiently everyone might be happy for decisions to be made via telephone, email or messaging apps and then ratified at a later meeting.

Decision making principles

The seven decision making principles for charity trustees are always useful to remember. They are:

TRUSTEES MUST ACT WITHIN THEIR POWERS. some powers are given in general such as spending funds to deliver purpose, some are set by law such as the power to buy land for the charity, and others are dictated by the governing document. It is important to follow the governing document as it sets out the specific requirements for charity operations - for example, if it can borrow funds against land or property to raise funds. It will also cover what to do with excess funds such as setting up an endowment.

If new trustee appointments must be approved by a governing body, this means until that has taken place the appointees don’t have the authority to act on behalf of the charity and they have no power to make decisions or vote.

TRUSTEES MUST ACT IN GOOD FAITH. This includes they should ask questions if they don’t understand what they are being asked to make decisions on and share relevant information that they have with those who need it to allow them to decide.

TRUSTEES MUST BE SUFFICIENTLY INFORMED. Trustees should refer to the information on which they are being asked to make a decision and look at everything available at the time. If they need to consult and take professional advice, this should be done.

TRUSTEES MUST CONSIDER ALL RELEVANT FACTORS. Decisions must align with the charitable purpose, and they should consider all the factors which are relevant. They should consider all the costs and benefits relevant to a decision and the impact of the decision on beneficiaries and wider stakeholders. They should also consider the impact of decisions on the charity’s wider reputation.

TRUSTEES MUST IDENTIFY AND DISREGARD IRRELEVANT FACTORS. This means setting aside personal feelings, prejudices or the impact the decision will have on the family or businesses they are linked to. With decision making it’s important to get the balance right of those factors that will impact directly on the charity and its reputation, the environment or the community, as such impact may affect wider fundraising abilities in the longer term.

TRUSTEES MUST MANAGE CONFLICTS OF INTEREST. No decision can be influenced by a trustee’s own interests.

TRUSTEES MUST ENSURE THEIR DECISION IS WITHIN THE RANGE OF DECISIONS THAT A REASONABLE TRUSTEE BODY COULD MAKE. This is based on premise that the information which is available to them at the time is the most up to date and accurate. Possibly later a different decision will be made, and it may be necessary to change the original decision.

Following these principles and then documenting them as to how they were fulfilled at the time is a useful discipline for getting decisions right and having the most effective meetings.