Charity trustees and delegated authority: What is it and how should it be exercised?

Charity trustees and delegated authority: What is it and how should it be exercised?

Sarah Furness, Employment Law & HR

Charity trustees have ‘general control and management of the administration of a charity’ meaning they must make decisions to govern a charity well; ensuring that it remains solvent and is operating in line with it’s charitable purpose. Charity trustees are personally and collectively responsible for the decisions they take concerning a charity, however they may delegate some of their authority and indeed this is essential so charities can be run effectively!

What does it mean to ‘delegate authority’ as a charity trustee?

Although decisions taken about a charity generally come from the trustees as a group, there are some circumstances in which they may give their power to make decisions to a single trustee, committees, staff or volunteers. They key thing to note is that while they may give away their decision-making power, they will always retain responsibility and accountability for any decision made; even if they have not made it.

What matters may be delegated?

What decisions may be delegated depends both on statute and on the governing document of the charity. The governing document will typically state the scope of a trustee’s authority to delegate, and therefore there may be some decisions that trustees are expressly unable to delegate. The board should make sure to regularly review which matters are to be reserved for them and which can be delegated.

How should delegated authority be exercised?

Delegated authority should be exercised carefully and within clear limits set by the trustees. Any decision that is high risk or novel should be taken by the trustees, rather than being delegated. The Charity Commission’s guidance on decision making for charity trustees states that trustees intending to delegate authority must make sure that they have clearly set out what types of delegated decisions may be made and when they need to report it to the trustees, and they must have clear and robust reporting procedures and lines of accountability in place.

Nevertheless, it is not uncommon for trustees to have a broad power to delegate decision-making power, specifically to committees and the following are best practice safeguards:

• At least one member of each committee must be a trustee;
• The acts and proceedings of any committee must be reported to the charity trustees as soon as reasonably practicable;
• The charity trustees must review the arrangements for the delegation of their powers from time to time.

Summary

Charity trustees can give others the authority to make decisions about the charity. This can be a useful tool for helping the charity remain efficient in carrying out its charitable purpose, however there must be clear and robust guidelines put in place by the trustees. The scope of the delegated authority must remain certain and unambiguous, and there must be a clear reporting procedure to the trustees to ensure that the charity remains well-governed in every decision taken.

To find more about our Charities offering, contact one of the team.