Charity trustees have overall legal responsibility for the management and administration of their charity. It is not always practical for the charity trustees to make every decision, however, and delegation of powers of the trustees often occurs in charities, large and small. Powers may be delegated to sub-committees, to individual trustees, or to employees of the charity.
In order for the exercise of any delegated power to be valid, it is important that the power to be delegated is one which is capable of delegation, and that the decision to delegate is documented correctly.
Is the power capable of delegation?
Charity trustees wishing to delegate the exercise of a power will need to check their charity’s governing document first to see if the power can be delegated. Most modern governing documents will contain express powers of delegation, and set out the way in which the delegation of a power must be documented.
For example, the Charity Commission’s model articles of association for a charitable company limited by guarantee provide for the delegation of any powers of the charity trustees to a committee of two or more directors, provided that the terms of any such delegation are recorded in the minute book, and all acts of any committee are fully and promptly reported to the board of charity trustees.
This limitation of delegation to a committee of at least two charity trustees clearly demonstrates the need to check the governing document of a charity before attempting to delegate a power! Any attempt to delegate the exercise of a power to an individual employee under the Charity Commission’s model articles would result in an invalid exercise of the power, even though such delegations are commonplace in private companies and charities which do not use the Charity Commission’s model articles.
Who has responsibility for the exercise of delegated powers?
Even if a power is delegated, ultimate responsibility for the exercise of that power remains with the board of trustees. That is why it is so important for charity trustees to monitor any delegations of power, to put proper reporting arrangements in place and to revoke the delegations if it becomes necessary.