This refers to members of your governing body (Management Committee, Board of Trustees, Executive Committee, Board of Directors etc.)
There are some liabilities that all committee members face, whether in an incorporated or unincorporated organisation:
• Breach of trust under charity law (carrying out unpermitted political activity, or receiving personal benefit from the charity)
• Criminal offences such as fraud
• Major civil wrongs such as serious negligence
• Acting as a charity trustee or company director when disqualified
• Failure to comply with statutory requirements, such as health and safety breaches or failure to deduct employees’ PAYE
Whilst Trustee Indemnity insurance may offer some limited protection in relation to legal costs, it will not protect trustees against liability for commercial debts or the repercussions of proven wrong-doing.
In a situation where you may be individually liable, it is worth noting that:
• you remain responsible for previous decisions and failings even if you resign, so it is usually best to stay put
• it is important to ensure that collective decisions are clearly minuted
• funders may well be sympathetic to any difficulties and it is usually worth consulting them at an early stage
It is vital to note that committee members will face significantly different liabilities depending on your legal structure:
a. incorporated bodies (companies, industrial and provident societies)
b. unincorporated associations or trusts