Making decisions is one of the most important parts of your role as a charity trustee.

There may not be one single correct answer to each significant or strategic decisions that you need to make, but how you and your fellow trustees ARRIVE at the decision is critical.

Make sure you reach a sound conclusion

Using a robust decision making process will help you ensure you act within both your powers, and the law.  

It will show you have acted properly, and protects you if something goes wrong.

Not doing so could result in you and your fellow trustees being personally liable for any financial loss or reputational damage to your charity.  Your decisions could be invalid, and the Charity Commission could even sanction you or  intervene.

The Charity Commission has some very detailed guidance, and here’s a birds-eye-view to help you along:

Act within your powers

Don’t forget the basics!

Check your governing document and ensure your decisions are consistent with your charity’s objects and powers.

Be sure you are quorate and that all the trustees have been properly appointed and invited to participate. Decisions should be taken collectively.

Act only in good faith and in your charity’s interests

Keep it real.

“Good faith” means honesty or sincerity of intention, trying to do the right thing in your charity’s interests.

“Bad faith” would be acting in a way that the trustees did not honestly believe was in the interests of the charity. Or, intentionally benefiting someone in a way that was not in the charity’s interests.

Understand what’s at stake

Make sure you are sufficiently well-informed.

What is “sufficient” will depend on the nature of the decision to be made.  

• How much money is involved?
• How complex is the situation?
• Is it controversial?
• How big is the impact?  Is this a far reaching decision?
• Is it urgent?

Consider data from risk assessments, taking professional advice and consulting stakeholders.

Take account of all relevant factors

Adopt an analytical approach and beware of reliance on “common sense”.

List the relevant factors. Start with “the charity’s best interests” and “consistency with the charity’s objectives” as tests and work from there.

Relevant factors may include any resulting diminution in charitable activities and the effect of the decision on “public benefit.” 

Possible alternative decisions  are relevant too and should be identified and considered.

And other stakeholders’ opinions may be relevant, but remember the decision is yours not theirs.  

Ignore any irrelevant factors

Although it might seem self-evident that something is irrelevant, as trustees you should positively decide what is not relevant to the decision on the table.

List the irrelevant factors and systematically eliminate them – or maybe decide some of them are relevant after all.

Keep it professional at all times

Tempting as it may be, do avoid letting your judgment be swayed by any personal prejudices.

For example if your trustees decided to sell a surplus charity asset to the second-highest bidder because of personal dislike of the highest bidder, you would be in breach of duty.

Only make decisions that “a reasonable trustee body” might make

Ask yourself: is our decision one that “no sensible group of trustees could possibly make?”

Put it the other way round: ensure your decision is safely “within the range of decisions that a reasonable trustee body could make in the circumstances.”

This may sound obvious, but if your decision is feeling at all ‘out there,’ then you should definitely document why you feel that this decision does fit within this criterion.

Cover your back

The decisions you make as a charity trustee matter – to the charity and to you.

So, it follows that taking them seriously, and documenting that you have taken them seriously, are important too.

You should always take full minutes which are proportionate to the importance of the decision:

• Who was present
• What you decided
• The main reasons for your decision
• The factors you considered
• Factors you expressly disregarded
• Whether you sought advice
• Whether you followed the advice and why
• The key points of your discussion
• Whether anyone strongly disagreed

Then however your decision turns out, you can sleep a bit easier in the knowledge of a decision well taken.

And if you and your fellow trustees would like some support during a phase of critical decision making for your charity, I’ll be happy to help.  Get in touch any time.

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Geoffrey Hand

Geoffrey Hand is a charity governance consultant, offering governance consultancy and training. He also provides legal services management, helping charities get better value for money from their lawyers. Geoffrey has extensive experience in the charity and legal worlds, and his mission is to help charities deliver good governance.

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