Navigating Charity Trustee Duties: A Conflict-Free Approach

You’ve likely heard the news about Captain Tom’s daughter and son-in-law recently being disqualified from serving as charity trustees by the Charity Commission. This decision, made in the wake of the investigation into the Captain Tom Foundation, highlights just how seriously the Charity Commission views the role of charity trustees.

The role of a Charity Trustee  

As a charity trustee, you are responsible for managing the charity.  This role involves not only fiduciary duties towards the charity and its beneficiaries, but also a duty to avoid situations where conflicts may arise. Here, we explore the duties related to conflicts of interest that apply to trustees across various charitable structures.

Types of Conflicts

Conflict of interest 

• This occurs when a trustee, or someone connected to them (such as a family member), is associated with or connected to a transaction carried out on behalf of the charity.
• For instance, if a trustee’s relative is involved in a financial deal related to the charity, it creates a conflict of interest.

Conflict of Loyalty 

• Trustees owe loyalty to the charity and its beneficiaries. However, conflicts can arise when their individual loyalty lies elsewhere—perhaps with a family member or another connected party.
• Balancing these loyalties can be challenging, given the high standard of trust and confidence expected of charity trustees.

Consequences of Breach

Breaching trustees’ duties or becoming entangled in conflicts of interest or loyalty can have serious repercussions: 

• Personal liability – Trustees may be personally liable for any losses incurred due to their actions.
• Unauthorised benefit – If a trustee gains an authorised benefit from a transaction, they may be held accountable. 
• Challenge by authorities – the Attorney General or the Charity Commission can challenge questionable transactions. 

Taking the role seriously 

Individuals serving as charity trustees must recognise the importance of their role and protect the trust put in them by the general public. David Holdsworth, Charity Commission CEO, comments, “…it is vital that we uphold and protect this trust, including by taking robust regulatory action where appropriate, based on firm evidence". Understanding the duties associated with a trustee role and the implications of breaching any of the imposed duties arising as a result of the role of trustee is fundamental. 

Our Philanthropy team at Irwin Mitchell lead by Matthew Briggs can assist you and/or your charity with advice on any of the themes mentioned in this article.