New Clause 1

Charities Bill [Lords] – in a Public Bill Committee at 2:15 pm on 13 July 2006.

Alert me about debates like this

Duties of trustees

‘(1) A charity trustee must, in exercising functions in that capacity, act in the interests of the charity and must, in particular—

(a) seek, in good faith, to ensure that the charity acts in a manner which is consistent with its purposes;

(b) act with the care and diligence that it is reasonable to expect of a person who is managing the affairs of another person; and

(c) in circumstances capable of giving rise to a conflict of interest between the charity and any person responsible for the appointment or remuneration of the charity trustee—

(i) put the interests of the charity before those of the other person, or

(ii) where any other duty prevents the charity trustee from doing so, disclose the conflicting interest to the charity and refrain from participating in any deliberation or decision of the other charity trustees with respect to the matter in question.

(2) The charity trustees of a charity must ensure that the charity complies with any direction, requirement, notice or duty imposed on it by virtue of this Act.

(3) Subsections (1) and (2) are without prejudice to any other duty imposed by enactment or otherwise on a charity trustee in relation to the exercise of functions in that capacity.

(4) Any breach of the duties under subsections (1) or (2) is to be treated as being misconduct in the administration of the charity.

(5) All charity trustees must take such steps as are reasonably practicable for the purposes of ensuring—

(a) that any breach of a duty under subsections (1) or (2) is corrected by the trustee concerned and not repeated; and

(b) that any trustee who has been in serious or persistent breach of either or both of those duties is removed as a trustee.

(6) For the purposes of this section “charity trustee” includes an individual representative of a corporate trustee.’.—[Mr. Turner.]

Brought up, and read the First time.

Photo of Andrew Turner Andrew Turner Conservative, Isle of Wight

I beg to move, That the clause be read a Second time.

This is an attempt to set out the responsibilities and duties of trustees in a single clause. I am sure that the Minister will tell us that they appear elsewhere in the legislation, or they might appear spread out over lots of different parts of the legislation. It may be that in the consolidation to which my hon. Friend the Member for Worthing, West referred a moment ago, those duties and responsibilities will be clarified and brought together. The new clause is probing rather than one that I expect to press to a vote.

Photo of Ed Miliband Ed Miliband Parliamentary Secretary (Cabinet Office) 2:30, 13 July 2006

I sympathise with the sentiments behind the clause. The Trustee Act 2000 covers unincorporated charities, and the Companies Act 1985 and the Company Law Reform Bill currently being debated elsewhere in the House cover incorporated charities, giving them very similar responsibilities. It is important to clarify the duties of trustees, so it is worth saying that the Charity Commission has produced a popular and well respected booklet called “The Essential Trustee: What you need to know”, which covers the responsibilities and duties of trustees. The hon. Gentleman raises an important issue and the main things to say is that it is set out clearly in documents available to trustees. I hope that he will withdraw the new clause.

Photo of Peter Bottomley Peter Bottomley Conservative, Worthing West

May I follow the Minister by saying that his words about the booklet “The Essential Trustee” will be warmly endorsed across the House? The Charity Commission, which produced it, has done a service to trustees, and those who have presented it have put it in an accessible form. They give a brief introduction and then expand on what people need to know. It is one of the examples of the Charity Commission doing its job well and allowing trustees to do theirs better.

Photo of Andrew Turner Andrew Turner Conservative, Isle of Wight

I am grateful to the Minister for his explanation. I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.