Back

Our offices will be closed over the Easter weekend from 5:30pm on Thursday 28 March. We will reopen as usual at 9am on Tuesday 2 April.

Get in Touch Menu

Trustee oversight

14 March 2016

One of the key issues highlighted in the PACAC report was that there was ‘negligent’ trustee oversight of senior management, particularly with regard to the charity’s financial health. Trustees have to be comfortable with number-crunching and ensure that there is a suitable reserves policy in place (see our article on top tips for charity trustees which provides updated finance guidance).

Beyond the finances, trustees remain ‘jointly and severally’ accountable for the organisation and, as such, have a duty to challenge decisions across all areas of its operations.

A good relationship between the chair and the chief executive is the cornerstone to effective trustee oversight. For this to be in place, there must be clarity over their respective roles but sufficient trust for the delineating point to ebb and flow as circumstances dictate.

The chair needs to understand when it is appropriate for the trustees to step in and challenge decisions (for example, by ensuring that they receive regular and comprehensive reports), but equally an overbearing chair can alienate an otherwise enthusiastic chief executive. Similarly, the chief executive must not view the trustees as a nuisance but rather as stakeholders to whom he is providing a service and, one would hope, as experts in the sector upon whom he can rely for support.

Personalities will, to an extent, influence the precise nature of the relationship but the chair needs to be aware of his role and responsibilities, even where the chief executive appears to be extremely competent. Alan Yentob, the chair of Kids Company, has come under particular scrutiny in this regard since it was felt that the chief executive’s domineering and confident personality contributed to his rather passive approach.

Trustees may like to consider organising a short training session where there has been a recent change of senior staff or trustees, or where relations have become a little strained, to remind the key players of the importance of a strong governance structure and to remind the trustees of their duties and responsibilities.

Associate, solicitor Laura Davis advises owner-managed businesses, local and national SMEs and not-for-profit organisations on all areas of employment law. Her expertise includes the conduct of tribunal claims, drafting policies and contracts, advising on appointments, disputes and severances, the planning and implementation of restructures and changes to terms and conditions, including via collective consultation. She also handles whistleblowing, family-friendly rights, employee competition, confidentiality and employee health issues.

We're here to help

Disclaimer: All legal information is correct at the time of publication but please be aware that laws may change over time. This article contains general legal information but should not be relied upon as legal advice. Please seek professional legal advice about your specific situation - contact us; we’d be delighted to help.
Contact
Jenny Hawrot LLB (Hons)
Partner
View profile
Jenny Hawrot
Related services
Share this article
Resources to help

Related articles

Business Immigration: Significant changes to take place in April 2024

Employment & business immigration

Last December, the Home Secretary announced a five-point plan to reduce immigration in the UK, with most measures to be implemented early this year. Today, it can be said that…

Klára Grmelová MGR (LLM Czech)
Solicitor

Constructive dismissal & delayed resignation

Employment & business immigration

Constructive dismissal and delayed resignation can prove to be difficult situations for some employers. Our team of experts look into a case that could help when looking to tackle issues…

Hayley Ainsworth BA, MSc
Associate, solicitor

Embracing neurodiversity at work

Employment & business immigration

We’re supporting Neurodiversity celebration week, which takes place from 18th to 24th March 2024. Here, our employment law team share insight into neurodiversity in the workplace and what employers can…

Jenny Hawrot LLB (Hons)
Partner
Contact us