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A training module for Ministers and Elders March, 2009 Created by Fergus Urquhart Synod Trust Officer and Office Manager About Fergus Urquhart TRAINING OBJECTIVES •Trust Officer and Office Manager since 23rd July, 2007 Broad overview of trusts • Elder at St Andrew’s United Rôle of Trustees Reformed Church, Ealing since 2000 Trusts & Local Churches •Trustee of St Andrew’s Church What to do next? Centre, Ealing since inception in 2001 Notes & Questionnaire •This training module was presented to Synod Executive in Ongoing consultation February, 2008 WHAT IS A TRUST? These are all my worldly goods I wish to bestow upon your church I am, therefore, a SETTLOR Until I die, then, I’m going to give the money to URC Thames North Trust (TRUSTEE) to hold the But we don’t want to give you that! money in trust for you At least, not until you’ve fulfilled certain until the condition I have conditions. E.G I have to die first! But you will laid down for the transfer be the BENEFICIARY of the money has been fulfilled. 1987 hague convention In law applicable to Trusts DEFINITION “….the legal relationship created – „inter vivos‟ (between living persons) OR on death – by a person (SETTLOR) when assets have been placed under the control of a TRUSTEE for the benefit of a BENEFICIARY OR for a specific purpose” So, that’s it in a nutshell. End of training?! Not quite yet….. Let’s investigate some of the implications of being a Trustee first!! CHARACTERISTICS OF A TRUSTEE • Assets do NOT constitute part of the Trustee’s estate Remember, the Church, the BENEFICIARY did not hold onto the cash I wanted to bequeath them. • Title/Legal Ownership is transferred by the SETTLOR (me) into the name of the TRUSTEES. • Beneficial ownership vested in those on whose behalf the assets are held in trust (the BENEFICIARY, the church) •Hague Convention on Trustees who hold: “power and duty in respect of which they are accountable to manage, employ or dispose of the assets in accordance with the terms of the Trust and special duties imposed upon them.” N.B. “DUTY” and “ACCOUNTABLE.” KNOW YOUR CHARITY DOCUMENT • It will tell you in legal terms about your liability as a Trustee •Do YOU and your FELLOW TRUSTEES tick all the following boxes? You should become a Charity Trustee ONLY if you • are prepared to give the necessary time and effort to management of the charity • can help the charity achieve its aims through your expertise or commitment • understand and accept trusteeship carries legal duties & responsibilities You CANNOT be a charity Trustee if • you are under 18 years of age • you are disqualified because of bankruptcy or conviction for an offence of dishonesty or deception (Charities Act 1993 Section 32) Before you first become a Trustee you SHOULD • study the charity’s Governing Documents to learn about its purposes and administrative procedures • ask your fellow trustees to give you full details to assist you to familiarise yourself with the charity’s property, investments and income • study recent accounts and minutes of meetings to learn about the charity’s finances and policies Charities: Do you have a job description for your Trustees? Do you have training for new or potential Trustees? Do you provide welcome packs for new or potential Trustees? If you do, what’s in it? Maybe, the following documents: Accounts, budgets with comprehensive explanations on them, back minutes to show the type of decisions made, a list of major assets. You may think of more yourselves Principles of Trusteeship • Trustee Integrity • Leadership • Control • High Performance • Review and Renewal • Delegation • Openness TRUSTEE INTEGRITY • Acting in good faith • Ensuring charity pursues its aims • Use assets and powers vested in you to pursue those aims • ALWAYS act in the interest of the BENEFICIARIES • YOU MUST ALWAYS ACT PERSONALLY I.E. TAKE ACTIVE PART TOWARDS THE ABOVE AIMS AT ALL TIMES • Avoid conflicts of interest • Duty of Care towards everything at all times RESPONSIBILITIES OF TRUSTEESHIP • LEGAL • MANAGERIAL • FINANCIAL LEGAL RESPONSIBILITIES 1. Charities Acts - Regulatory Capacity of Charity Commission 2. As URC Thames North Trust (company limited by guarantee) – Laws governing Bodies Corporate 3. Such limited legislation as exists regarding Trusts 4. Civil Law 5. Health & Safety legislation 6. Insolvency legislation 7. Anti Money Laundering legislation 8. Employment Law 9. Equality legislation BEWARE!!!!!!!! LEGAL ISSUES FOR TRUSTEES COULD SERIOUSLY DAMAGE YOUR WEALTH!!!!! • Charities Act 2006 regarding charities proving suitable charitiable purpose AND suitably for Public Benefit. • Keep up-to-date – Sample publications to make it easier e.g. “Governance Matters” from the Governance Hub and the Charity Finance Year Book. A list of publications is issued separately under “downloadable handouts.” • Trustees acting outside powers = BREACH OF TRUST • Civil remedy – PERSONAL LIABILITY TO REIMBURSE ANY LOSS/EXPENDITURE. For as long as you, individually, are a trustee, even retrospectively to the period you acted in that capacity • Compliance – Governing documents to be kept up-to-date. They are not immutable and it is permissible to allow them to evolve with the development of the charity DON‟T LET THAT STOP YOU BECOMING A TRUSTEE, THOUGH!!!!!!!! IN THE END OF THE DAY, ALL THE ABOVE SAYS IS TO UTILISE COMMON SENSE RELATED ISSUES TO BEAR IN MIND 1. Conf lict of Interest 2. Wrongful/fraudulent trading 3. Political activities 4. Disagreeing with fellow Trustees/Decision-making 5. Grey Areas - Always refer to Charity Commission for guidance. CONFLICTS OF INTEREST As individuals, we all function in many capacities; our “day jobs,” our interests in sport, the arts, our passions – human rights or whatever, other trusteeships or directorships. Maybe an employee of a Local Authority, say, in the planning office, will be approached to become an Elder/ Trustee of your church. Will he have a conf lict of interest when you, the local church seek planning permission for a rebuilding project? Should we keep a record f one another’s interests to ensure we avoid conf licts of interest? Disagreeing with fellow Trustees’ Decision-making • A majority decision binds the majority •YOU are bound by such majority decisions even if you were absent from the meeting when the decision was taken If voting AGAINST a decision • Make sure your vote is minuted • If disagree seriously e.g. you perceive a Breach of Trust, say, spending resources on something outside the Trust’s Church’s objectives – consider resignation MANAGERIAL RESPONSIBILITY OF TRUSTEES • Working effectively as a Board • Working parties/Sub-committees to make “many hands make light work” – make sure to give them written TERMS OF REFERENCE • Accountability externally – regulators, legal obligations, suppliers, outsourcers • Staff relations from recruitment to dismissal. Do Trustees need training in effective interviewing techniques, for example? • Monitoring all elements of charity • Constant review and, wherever necessary, re-evaluation of policies and/or procedures – including providing training modules for Trustees • Managing property and land • Public relations – Trustee training required for those who speak to the press •Relationships with those for whom we act in Trust •Relationships with like-minded bodies MANAGERIAL RESPONSIBILITY = DUTY OF CARE TO ALL WITH WHOM WE ARE INVOLVED FINANCIAL RESPONSIBILITIES • Accounting • Budgeting and Financial Control •Managing investments • Insurance •Allocation to and use of Reserves • Trading •Fundraising • Understanding the charity’s Balance Sheet (another potential trustee training module?) FINANCIAL RESPONSIBILITIES = DUTY OF CARE + PRUDENCE MAKING MEETINGS WORK • PREPARATION Read the papers Think about the issues Make notes on points to raise • WORK Join in discussions Put forward constructive ideas Maintain interest in discussions Look for areas of common agreement WHERE IS YOUR TEAM ON THE PROGRESS CHART? • FORMING Collection of individuals Forming identities within team • STORMING Behaviour/leadership of group being challenged • NORMING Group establishing norms & how it will work • PERFORMING Group is productive IT’S ALL ABOUT OPENNESS + ACCOUNTABILITY + COMMON SENSE Accountability to the beneficiary, to one another, to the wider organisation, regulators and authorities PLEASE, REMEMBER TO PICK UP THE FOLLOWING HANDOUTS (See separate file marked “Trustee Handouts” on website) • “Quick and dirty” assessment to get you started “Board Assessment. • Checklists for future action/discussion • Trustee sample person specifications and officer job descriptions • Board Leadership • The Board in control • “Governance Matters” Issue 1 – Introduction • Prime site/Publication Recommendations for further reading and research.