The Guidance CC27 Decision-making for charity trustees was updated in September 2024 to be more accessible and easier to use. It focusses on the seven key principles for trustees when making decisions for their charity.
Trustees must:
- act within your powers (follow your charity’s governing document)
- act in good faith and only in the interests of the charity (being open, fair and honest)
- make sure you are sufficiently informed (including undertaking cost and risk assessments and taking professional advice if required)
- take account of all relevant factors (options, costs, risks benefits, short- and long-term impact, reputation)
- ignore any irrelevant factors (personal feelings)
- manage conflicts of interest (personal interests)
- make decisions that are within the range of decisions that a reasonable trustee body could make (give sufficient time to the decision taking into account guidance and specialist advice as necessary)
When trustees make decisions, they should ensure that the documentation is clear so that someone questioning the decision could understand what information was available at the time of the decision, why advice was, or was not, requested, how different stakeholders were considered, and how the decision was justified.
It is an important principle in charity governance that there is collective responsibility. All trustees are jointly responsible for the final decision, regardless of whether the individual trustee disagreed or did not attend the relevant meeting.
It is important for good governance that all trustees bring their personal skills and experience to any decision and that there is constructive debate and challenge. However, irreconcilable differences are likely to be damaging. The Charity Commission’s existing guidance on Disagreements and disputes within charities may be useful in that situation.
The Charity Commission will not make decisions on behalf of the trustees. Where concerns are raised with the Commission, they will consider the decisions but more importantly how the decision was made, the process and the evidence.
Therefore, as inevitably some decisions may not work out as intended, it is important for trustees that they can evidence the good faith, due process and reasonable skill and care of their decision-making.
Read the latest Charities and Non-profit newsletter to find out more about further changes that will impact the sector.
If you would like to discuss how these changes might affect you, please get in touch with our team.
This article was correct at the time of publishing.
