We recently published a guide to the legal responsibilities and duties of charity trustees. In this post, we will examine another aspect of charity law regarding trustees: How many does your charity need, and how long should they serve?
How Many Trustees Does a Charity Need?
The number of charity trustees you need as a legal minimum will depend on the type of charity you are running, along with your charity’s constitution or governing documents.
In most cases, if you are running:
- An unincorporated trust or association, or a charitable incorporated organisation (CIO), you have a legal requirement to appoint one trustee.
- A charitable company (CLG), Companies Act 2006 specifies that you need to appoint, at minimum, one director.
A charity’s governing documents should also set a minimum number of trustees. Typically, this will be between three and five.
It is important to note that you must appoint the minimum number of trustees as outlined in your charity’s governing document, even if this number is higher than the legal minimum.
Charity Commission Guidance on Number of Trustees
The Charity Commission recommends that all charities, regardless of size or type, need at least three trustees.
This is for practical governance reasons:
- Effective Decision-Making – If there are just two trustees, any disagreement will automatically lead to a deadlock. But when there are three or more trustees, it is more likely that two trustees might agree on a decision, meaning that the board as a whole can agree to go with the majority.
- Clearly Defined Roles – With three or more trustees, each trustee can take on a specific role. Along with a chair of trustees, you can have trustees responsible for finance, fundraising, safeguarding, programme oversight, and so on.
- Less Risk of Fraud – Clearly defining roles for your trustees will also much easier to effectively segregate duties. When it comes to finances, for example, one trustee can take responsibility for authorising payments, and other can take responsibility for checking them. If this were handled by just one trustee, along with all other governance tasks, then there may be a greater risk of fraud or oversight.
- Better Continuity – With three or more trustees, your charity’s board can continue to operate even if one trustee resigns, moves away, or falls ill.
Is It Possible For A Charity To Have Too Many Trustees?
While the Charity Commission does not advise on a maximum number of trustees, it does advise that larger boards can provide less effective governance than smaller boards.
If you are a smaller charity, you should aim to have between five and eight trustees. Even larger charities should aim for relatively smaller boards. Most charities will set a maximum number of trustees in their governing documents, typically between 10 and 15.
The more trustees your charity has, the harder you will find it to schedule meetings that everyone can attend. Larger boards can also lead to slower decision-making, particularly if disagreements arise. Plus, if your board is too large, then there may be less individual accountability, which could lead to oversights and other issues.
How Long Should Your Trustees Serve?
There are no laws around how long your trustees should serve. The Government guidance instead advises you to refer to your charity’s governing documents.
Essentially, your charity’s governing document should specify a set number of years that your trustees can serve for. Unless your document specifies otherwise, then any trustee that reaches the end of their term may be reappointed for another term.
The Government guidance also specifies that, if your charity’s governing documents do not specify a specific length of service, then “trustees continue in their role until they die, resign, or are removed.”
Procedures for Removing or Recruiting Trustees
With this in mind, your documents should outline the procedures for removing trustees, for resignations, and for appointing new trustees should they stop serving for whatever reason.
It is important to ensure that you will always have enough trustees in place for effective governance, which is why the Charity Commission advises on a minimum of three trustees for all charities. The Government also advises that you should find and appoint new trustees before retiring or resigning trustees leave, to ensure continuity.
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