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Charities Act 2011 (applies to CIOs)
Each charity trustee of a CIO must:
Act in good faith, in the way most likely to further the purposes of the CIO; and
Exercise such care and skill as is reasonable in the circumstances, having regard in particular:
(a) To any special knowledge or experience that the charity trustee has or purports to have; and
(b) If the charity trustee acts as such in the course of a business or profession, to any special knowledge or experience that it is reasonable to expect of a person acting in the course of that kind of business or profession
Trustees should also check their governing document for any additional requirements.
Be prudent!
Alongside the duty to exercise reasonable skill and care, trustees are also expected to act as an “...ordinary prudent man of business acting in the management of his own affairs” Speight v Gaunt 1883. Prudence is the key word here, and is an old fashioned virtue. It is de ned by the Oxford English Dictionary as “The ability to recognize and follow the most suitable or sensible course of action; good sense in practical or nancial affairs; discretion, circumspection, caution.” While the case is old, the law is unchanged, the thing to remember is that trustees are not supposed to act recklessly!
If at any point you feel that you do not have enough information to exercise “reasonable care” or make a “prudent decision” then you may need to ask more questions, and/or obtain professional advice. Obtaining professional advice
can not only provide you with the information you need but can also help you demonstrate that you have acted prudently by seeking the advice in the rst place. It is important therefore to cross refer to the advice you have had in your meeting minutes.
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