Peter Neal, founder of Experience Bank Group, specialises in recruitment for charities at leadership level, specifically chief executives and trustees. In this article he explores a question he is being asked more and more - should trustees be paid for their roles?
“In the UK, trusteeships are generally unpaid voluntary roles, undertaken as a way of giving back to our local communities. However, the debate is stepping up as to whether this is ethical, fair, and sustainable as the number of leaders offering themselves as trustees becomes less.
“Currently whether trustees should be paid depends on the nature of the charity, the specific roles of the trustees, and the policies of the charity itself. Trustees are generally considered to be volunteers and are not typically paid for their work. The Charity Commission for England and Wales expects trustees to act in the best interests of the charity, without financial incentive.
“That said, there are certain situations where trustees may be paid or reimbursed for their time and expenses.
“It is wholly acceptable that trustees are reimbursed for reasonable expenses incurred while fulfilling their duties, such as travel costs or other out-ofpocket expenses directly related to the charity’s activities. These should always be demonstrated with receipts, logged with the charities finance process and where necessary declared to HMRC by the recipient.
“There are certain situations though, where a trustee can be paid. If a trustee is also an employee of the charity (e.g., in a different role), they can be paid for their work in that capacity, but the Charity Commission must be notified, and there must be transparency. There are a number of charities in the region I know, for example, where the CEO is also a trustee. They are salaried for their executive role but not for their trusteeship.
“Trustees with specific skills or expertise may be compensated for their professional services. For example, a lawyer or accountant might be paid for the services they provide to the charity in addition to their trustee role. However, this should be clearly outlined in the charity’s governing documents and comply with charity law.
“Some larger charities with complex governance structures might pay trustees, especially if their roles involve substantial time commitments or require specific expertise. Again, this is always clearly outlined in governing documents, with the Charities Commission and must comply with charity legislation.
“Clearly, the payment of trustees can create potential conflicts of interest. Charities need to have clear policies to manage conflicts of interest and ensure the charity’s activities remain focused on its mission and are not driven by the financial interests of its trustees. If trustees are paid, the charity must ensure transparency. This includes proper documentation and disclosure in annual reports and accounts.
“The Charity Commission closely monitors the financial management of charities, and any payment made to trustees must be in line with the charity’s articles of association and governing documents.
“In conclusion, and in my opinion, trustees in the UK should generally not be paid for their governance role, but as outlined there are exceptions. If you want to read more about this subject, then there is very clear guidance at www.gov.uk/guidance/ payments-to-charity-trustees-what-therules-are.
“Due to the non-renumeration of these roles, many charities struggle to find quality trustees.”
If this is the case for your organisation, do get in touch to discuss by emailing peter@theexperiencebank.co.uk