The Charity Commission has recently updated its advice for trustees of small charities and advice to trustees generally to take account of The Companies Act 2006, which allows charity trustees to be paid for providing their charities with goods and services.
The advice deals with questions relating to payments to charity trustees, such as:
- when trustees can be paid for supplying goods and services;
- what to do about accountability and management of conflicts of interest;
- when it might be appropriate to pay a trustee for their trusteeship; and
- what do and do not count as reasonable expenses.
In principle, the concept of unpaid trusteeship is still paramount. However, the Act permits trustees to be reimbursed for their expenses from the funds of the charity and to be paid for their services where it is appropriate. The range of expenses which can be reimbursed is wide.
Clearly, the major issue is that of managing potential conflicts of interest. The guide also suggests that, as good practice, a trustee board should review regularly the performance of each trustee. This is particularly important where a trustee is receiving a payment from the charity.
Trustee directors of charities that are incorporated or which run trading subsidiaries should also be aware of the implications of the Companies Act 2006, which has been implemented in stages since 2007. Some aspects of the Act, particularly those which came into force in October 2008, have significant implications for director trustees.