• 24 Sep 2024
• •
• 3 min read

Decision-making for charity trustees: Charity Commission recent updates

Effective decision making by trustees is vital in order for charities to be run efficiently and to mitigate risk. The Charity Commission has recently (September 2024) updated its guidance on decision-making for charity trustees and it is important for trustees to familiarise themselves with this updated guidance.  

As a charity trustee, you must ensure that:

• You and your fellow trustees have been properly appointed to avoid any decisions you make being invalidated (you can check the charity’s constitution which should detail how trustees are appointed);
• You follow your charity’s governing document (this will be your constitution, Articles of Association, Trust Deed or similar)
• This usually sets out your options for making a decision (which will often include making decision by electronic means), the number of people required to attend the meeting to make valid decisions (also known as a ‘quorum’) and how many votes are needed to agree a decision (and if applicable whether the chair has a casting vote)
• You make your decisions ‘collectively’ or ‘jointly’
• Sometimes, not all trustees are able to attend a meeting or partake in decision making, however, trustees must understand that they are jointly responsible for any decisions made even if they do not attend the meeting, take part in, or vote for the decision. Once a decision has been made by the trustees at a quorate meeting, all trustees should get behind and support it
• You can show that, in making your decision, you have followed the ‘seven decision-making principles’

It is important that trustees fully understand these ‘seven decision-making principles’ when making decisions on behalf of the charity. The principles are expanded in the Commission’s guidance but in summary, Trustees must:

• Act within their powers
• Act in good faith
• Be sufficiently informed
• Take account of all relevant factors
• Identify and disregard irrelevant factors  
• Manage conflicts of interest
• Ensure their decision is within the range of decisions that a reasonable trustee body could make

It is essential that trustees follow these principles. The guidance confirms that in doing so, it will help you to ensure that you:

• Act within your powers and charity law
• Comply with trustee duties
• Show that you have acted properly
• Show that you manage risks to your charity
• Be protected if something goes wrong, for example if someone challenges your decisions; and
• Claim back the costs and expenses from your charity’s funds of carrying out a decision for your charity, where appropriate

Involving Members in Decision-Making

The new guidance also outlines how, for charities that have members, trustees must recognise and understand when to involve the members in decisions and when they can ask to be involved. Your governing document (and where applicable statutory powers) will help identify when members should be involved.  

Trustee Disagreement

It is unlikely that all trustees will always agree and constructive debate and challenge are signs of healthy and good governance. Trustees are encouraged to exercise independent judgment and disagree if you feel that a decision is not in the best interests of the charity. However, once a decision is reached, all trustees should support it.

It is important that trustees avoid disputes about decisions as these can have a lasting damaging impact on the charity; if you feel strongly against a decision, you can ask for this to be recorded in the minutes of the meeting, and if it is not something you can get behind, it may be that you consider whether resigning may be appropriate. Trustees should not publicly disagree with a decision that has been made collectively by the board, as this could potentially have a reputational impact.

Recording Decision-Making

All decisions regarding the charity should be recorded, and the guidance advises that the best way to do this is by keeping written minutes of the meeting. These should contain enough detail to enable the reader to understand the issues and the reasons for the recorded decision and any reports or documents mentioned within the minutes should be attached.

Trustees should record all decisions, even if they aren’t made in a meeting. Keeping a record of all decisions ensures certainty, reduces the likelihood that a decision could be challenged and evidences that you have acted and complied properly with your duties. This is particularly important for future trustees so they can see the considerations and evidence of why certain decisions were made.

Please do get in touch with a member of our Charities team if you have any queries or would like to discuss trustee decision making with us.