What is a trustee or NED
Beyond the reasons for wanting to join a Board, what essentials do you need to know before considering whether to apply for a role? Here are some things to think about; they’re not designed to put you off, and they are a bit dry, but they’re worth knowing!
You must be at least 16 years old to be a trustee of a charitable company or a charitable incorporated organisation (CIO), unless the charity’s governing document says you must be older. You must be at least 18 to be a trustee of any other type of charity.
This is the one consistent factor people underestimate when taking on their first board role. It’s a good idea to think about your time and if you are realistically able to give it. Having the backing of your line manager if you are employed so that you are not using up any annual leave is essential– many companies openly support their employees taking the odd voluntary day but those alone won’t be enough time to cover every meeting.
Board are increasingly holding meetings virtually, with many favouring a split between virtual/in person, which will help with managing your time but it is still a considerable part of your day and if you have to travel you’ll need to factor that in.
What you see advertised e.g., 1 day a month, is an average amount of time a board role can take up spread across a year – this usually breaks down as:
- Full Board meetings (usually four a year and can last between 2-4 hours); plus an Away Day/Strategy Day, which tends to be a full day.
- Sub-committees – you might be asked to join one, it could be around finance and audit, HR and employee wellbeing, or income generation. Those meetings can be held on the same day as the full Board meeting, but many organisations will hold them separately throughout the year; factor in additional meetings of around 1-2 hours.
- Board papers: depending on the size of the charity they can be considerable documents to read and although you’ll learn what’s relevant to you as you gain experience, you will likely spend quite a few hours going through them. And then reading them again a day before the meeting!
Check out our videos on your YouTube channel to hear how trustees and NEDs have learned to manage their time.
What is the difference between a Charity trustee versus a Non-Executive Director?
Trustee, Director or Non-Executive Director: it can get a little bit confusing when considering the different non-executive roles that exist, but overall, they bring similar responsibilities and accountabilities as a group to ensure an organisation is well run and fulfilling its purpose.
Although you don’t have to be an expert in governance, you do need to be proactive in your approach to learning about it and you need to understand what your role is on that Board and what your duties are.
- Trustees act collectively to set the strategic direction of the organisation, periodically review its achievements at Board meetings and provide a high level of scrutiny.
- Trustees are not employed or paid by the charity – but the Board is collectively responsible for ensuring that:
- the charity is well run
- manages its finances responsibly
- carries out its purpose for public benefit
The specific duties of the Board of Trustees will be set out in the organisation’s governing document which can be called its constitution, articles of association or trust deed. This sets out the rules by which the organisation must be run and includes: its purpose (Objects) in existing, who it benefits, the activities it can be involved in, where it operates, and the powers of the Board.
All trustees, not just the treasurer, are responsible for the charity’s finances and should be able to understand, consider and comment on financial information.
- a company director of a charity which is structured as a company
- a senior employee of the charity, but not a company director
Anyone who is a company director should be registered as such at Companies House and has certain duties under companies’ legislation. Company directors of company charities are charity trustees and must be registered with the Charity Commission as well as being registered with Companies House.
It’s rare for charity trustees to be prosecuted by third parties but understanding the differences between incorporated and unincorporated charities is worth knowing in terms of what personal liability you might hold.
Incorporated charities the liability of trustees is limited to if they have acted negligently or been dishonest or caused loss to the charity. For unincorporated charities, trustees enter into a personal contract with the charity (which isn’t a legal entity) and the contractual performance of the charity will fall on them including any financial losses. Most unincorporated charities should offer trustee indemnity insurance – it’s worth checking if you are unsure.
The role of the Non-Executive Director holds some similarities to a trustee; they are responsible for the active governance of an organisation. It is their job to act as an independent member of the Board, advising on the long-term strategy and providing constructive challenge and sometimes direct intervention to the Executive when necessary. One main difference is that Non-Executive Director roles may be remunerated, with the pay differing quite considerably between public and private sector organisations.