But they could take my house away!

Management of risks in the role of a Charity Trustee

Disclaimer – This document is not intended to be a legal reference document, although it does carry links to one or two. Nor is it intended to replace the rules and guidance listed in POR.

What I do intend it to do is look at some of the concerns that have been raised over the risks of being a Charity Trustee within a Scout Group.

I don’t think that there is any real concern about being a member of the Executive Committee – that role is fairly easy to understand, if not always easy to implement. Without going into all the finer points of POR, the role is simply to support the GSL in the smooth, safe and efficient running of the Scout Group. There is, of course, going to be some disagreement on the interpretation and implementation of that role but we’re all basically pulling in the same direction.

I have seen a concern recently about the specific role of a Charity Trustee – more particularly there seems to be a lack of understanding of the risks associated with that role. I have heard from people within the group that they are concerned about the legal risks, with especial mention made of the fact that “The Charity Commission could come after me personally. They could take my house”

Whilst, as a straightforward fact, this is absolutely true, it is not the whole truth. Keeping it Scout orientated we could equally say “Hiking could be dangerous because an aeroplane might crash on us”

Taking each of those statements on their own, out of context, documents the existence of a hazard but does not help us assess, or mitigate, the associated risks. With our adventurous activities, we draw up risk assessments to help us mitigate those risks and plan our way around those hazards accordingly. If we are unable to bring the risks down to an acceptable level, we modify or cancel the activity. What we don’t do, is abandon the activity altogether simply because the hazard exists.

Taking the, admittedly tongue in cheek, example of a plane crashing on our hiking group the risk assessment is quite straight forward.

Our hike leader intends to lead a group of Young People across the runway at Cardiff Airport on the first day of the Summer Holidays. The risk of a fatal collision with an aircraft is, obviously, unacceptably high so we modify the activity. We could arrange with the airport management for our Scouts to be shown around the facility at a time when no planes are flying. We could watch the planes from a place of safety by hiking around the perimeter fence instead. We could examine the purpose of the hike and realise that it doesn’t need to be anywhere near the airport. In short, we take steps to manage and minimise the risk so that the activity can go ahead safely.

When it comes to the role of a charity trustee, especially within The Scout Association, the risk assessment has been pretty much completed for us and published as a form of guidance. All we have to do, as individuals and collectively, is comply with it and the risk of any legal (either civil, or criminal) comeback is massively reduced and we can go ahead with our activity (which in this case is carrying out the role of a Trustee) safely.

So, let’s look at the guidance that constitutes our “Risk Assessment”

In the case of a Charity Trustee, there are three main areas of risk, or liability.

The factsheet, published by the government and available HERE states that Trustees

1) Will be liable to the charity for a breach of their trust or fiduciary obligations under law

2) Will be responsible for any breaches of criminal law they commit

3) Will sometimes be liable under civil law to third parties for breaches of contract or infringement of another’s rights

The factsheet goes on to state that Charity Trustees will be responsible for what they themselves have done, or in some cases omitted to do. They may also be liable for wrongful acts or omissions of employees or volunteers which they have sanctioned and occasionally will even be liable for the acts of others which they have not expressly sanctioned.

All in all, a pretty big, scary hazard. To continue with our previous analogy, we’re in the middle of the runway with a big plane on final approach. Or are we?

All we see documented here is the hazard, we’ve not touched on the likelihood of extreme sanctions reaching down to our level or how we manage this hazard to mitigate any of the risk to us as trustees.

Having identified the hazard, we then need to look at the likelihood of it impacting on our activity. From the government website section relating to Charity Trustees –

“It’s extremely rare, but not impossible for Charity Trustees to be held personally liable”

So, we’ve identified a big scary risk (The huge plane coming towards us), but now also identified that the likelihood of it affecting us is actually quite small (The plane is actually a military one and going over our heads to land at St Athan. Still a risk that will land on us if the pilot is lost, but a very small one)

Next, we need to look at what control measures we can implement to reduce the risk even further.

Our primary control measures are helpfully documented on the Government website (gov.uk)

To start with, the duties of Charity Trustee are listed as:-

1)  Ensure your charity is carrying out its purpose for the public benefit
2)  Comply with your charity’s governing document and the law
3) Act in your charity’s best interests
4) Manage your charity’s resources responsibly
5) Act with reasonable care and skill
6) Ensure your charity is accountable

If we comply with all of these, we’re not only moving off the runway, our hike is now in the Brecon Beacons. Planes have crashed there but it’s very, very rare and there’s not a single recorded incident of them hitting anyone walking underneath.

Since we operate under the umbrella of The Scout Association and, therefore, under POR, most of this should be happening automatically so I don’t intend to go into too much detail. I will briefly look at each point.

1) The Charity commission has obviously deemed that Scouting is for the public benefit. So long as we continue to work in accordance with the Aims of The Scout Association, we’re not going to fall foul of this one. The most likely breach of this section that could bring liability directly on the Trustees is if we chose to spend our charity funds on the wrong purpose. That would need a deliberate act e.g. the Executive approving release of funds to buy the GSL a new car.

2) All of our activities, at every level from Group Exec to the youngest Beaver starting their first meeting are governed by POR. It is practically impossible to follow POR and be in breach of the law. Again, any individual liability here would most likely be as a result of breaches of POR – allowing the Scouts to take part in a banned activity or allowing an activity to go ahead in the knowledge that no suitably qualified leader is present, for example.

3) Fairly self explanatory. If the Trustees decided to each take a massive personal cheque from Tesco to give up our lease and allow them to build a new Supermarket, then we should expect the Charities commission to chase us down. I don’t believe that there is anyone on the Executive Committee that isn’t trying to work in the Group’s best interests.

4) Again, not something we’re likely to fall foul of. We don’t fritter money away. We spend very little Group money without extensive debate. When we do spend large sums, it tends to be specifically raised for a purpose (Camps or activities) and is done without exposing the Group to financial risk – i.e, what risk isn’t borne by the participants, is insured via the Scout Association.

5) This one worries people as they think that we all have to suddenly become experts in everything. Thankfully, this is not the case. The Trustee Act 2000 says that trustees must “exercise such care and skill as is reasonable in the circumstances” – What is reasonable will depend on an individual’s circumstances. If we had, for example, a chartered accountant as a treasurer then it would be reasonable to expect him or her to be 100% up to speed with all the legislation relating to accounting procedures etc whereas a volunteer with no previous experience could expect a significant degree of leniency in the event of an accounting hiccup, provided that they could show that they’d taken all reasonable steps to get it right.

6) We are accountable at every level. We feed back reports via District and Area to Gilwell on activities, census returns, activities, accounts, everything we do. Our meetings are recorded and the minutes are available to any interested party to view. We are accountable to our members and to their parents. Everything we do is open to the utmost scrutiny.

If we continue to carry out each of these 6 duties to the best of our ability then the risk to any individual is extremely low, possibly even non-existent. The only time an individual Trustee is likely to be at risk, either financial or legal is in the event of a deliberate or negligent act, or omission, by one or more of the Trustees. Even then, if the other trustees had no knowledge, and could not reasonably have foreseen the act or omission taking place, there is very little likelihood of any personal comeback.

In the event of something going wrong, provided we have carried out our duties with all reasonable care, Trustees within the TSA are indemnified legally by the Association.

Should the Trustees face any financial liability, and can show that they have acted properly, even if an insurance claim is not possible, “they will be able to avail themselves of a right of indemnity from the assets of their charity.”

In short, just as with any Scouting activity, simply identifying the hazard is not enough – on its own it is misleading, counter-productive and leads to unfounded fear of the risks. Analysing the hazard, identifying the likelihood of risk and then implementing all suitable control measures to manage and reduce the risk is the next step.

I am more than satisfied that we’ve achieved this and will not have any concerns about remaining in my role as a Trustee. The one recommendation that I would make to any Executive Committee is that prospective Trustees are made fully aware of not just the risks but all the above control measures that are in place to protect them, provided they carry out their role with Reasonable Care and Skill.