The Charity Commission's guidance, 'The Essential Trustee: what you need to know (CC3)', has long been considered the starting point for individuals who are thinking about becoming charity trustees. The revised version published on July 10 2015 should be read by all charity trustees, new and old.
In the new guidance, it is made clear that the Commission's role as regulator and trustee's basic responsibilities remain the same, and many of the changes simply relate to the layout of the guidance for reading online and linking to other guidance, but there is a significant change relating to the Commission's use of the word 'should', which use has been the subject of consultation with the Charity Law Association.
The previous CC3 guidance distinguished between legal requirements (what trustees 'must' do) and good practice (what trustees 'should' do). In the past, many trustees have been confused by the use of the word 'should' as it was unclear whether the specified good practice was optional or whether it should be strictly followed.
In November last year, a draft of the updated guidance was released which, aside from other changes, sought to clarify this point. The Commission qualified its meaning of the word 'should' by stating that they expect trustees to comply with specified good practice, unless they can justify not doing so. The draft guidance also set out that a failure by trustees to follow good practice would amount to a breach of their legal duties.
These changes suggested a much stricter approach taken by the Commission and demonstrated its intention to make it clear to trustees that if they cannot justify why they have not followed good practice, the Commission would use its powers to investigate and treat the failure as misconduct or mismanagement.
Consultation on the draft guidance was held in February 2015. The sector raised concerns that the new definition of 'should' was not consistent with basic charity law principles and could easily lead to a situation where good practice recommendations were treated as legal requirements. There were also concerns that the draft guidance did not reflect the huge value of trustees to charities and it would discourage people from taking up a role as a trustee.
Following the consultation, the guidance was revised further and now states that the word 'should' means that something is good practice and the Commission expects trustees to follow and apply to their charity. The guidance also explains that the good practice specified will help trustees run their charities effectively, avoid difficulties and comply with their legal duties.
The general consensus in the charity sector seems to be that the revised trustee guidance strikes the right balance between the Commission's regulatory expectations and the underlying legal obligations, and avoids discouraging people from acting as a charity trustee.