Charities in Scotland: trustees’ responsibilities

Who Are Charity Trustees?

Trustees are the people legally responsible for the overall governance and strategic direction of a charity. They ensure the charity:

• Operates lawfully

• Acts in accordance with its purposes

• Manages its resources responsibly

Trustees may be volunteers, professionals, or a combination of both, but their duties are serious and carry legal consequences if breached.

Legal and Regulatory Framework

Scottish charities are regulated by the Office of the Scottish Charity Regulator (OSCR). Trustees must comply with Scottish charity law and the charity’s own governing document (such as a constitution or trust deed).

Key regulatory requirements include:

• Ensuring the charity’s purposes are complied with

• Keeping clear and accurate records

• Filing annual returns and accounts

• Reporting changes to OSCR

Non-compliance can lead to sanctions or removal of trustees.

Governance and Oversight

Trustees are responsible for setting the strategic direction of the charity and overseeing its activities. Governance duties include:

• Agreeing the charity’s vision and objectives

• Monitoring performance against objectives

• Setting and reviewing policies (such as conflicts of interest, safeguarding, financial controls)

• Ensuring proper meetings and decision-making processes

Good governance helps build stakeholder confidence and protects the charity’s integrity.

Financial Management and Controls

Trustees have a duty to safeguard the charity’s assets and ensure proper use of funds. This involves:

Budgeting and Financial Planning

Establishing realistic budgets aligned with the charity’s goals.

Accurate Accounting

Ensuring all financial transactions are correctly recorded and transparent.

Internal Controls

Implementing systems to prevent fraud, error, or misuse of funds.

Reserves Policy

Agreeing on reserves to maintain financial stability during uncertain times.

Trustees may delegate day-to-day financial administration, but ultimate responsibility remains with them.

Reporting and Compliance

Scottish charities must submit:

• Annual accounts

• Trustees’ reports

• Annual returns to OSCR

These reports demonstrate that the charity is fulfilling its objectives and properly managing funds. Some charities must also follow specific accounting standards based on their size and structure.

Timely and accurate reporting is essential to maintain charitable status.

Duty of Care and Personal Liability

Trustees must act with reasonable care and skill. This means:

• Making informed decisions

• Seeking professional advice when necessary

• Acting in the charity’s best interests, not personal interests

In certain circumstances, trustees can be held personally liable for loss or damage caused by negligence, breaches of trust, or failure to meet legal obligations.

Conflicts of Interest

Trustees must avoid conflicts between personal interests and the interests of the charity. Policies and procedures should be in place to:

• Identify potential conflicts

• Disclose and record conflicts

• Ensure conflicted trustees do not participate in related decisions

Clear documentation helps maintain transparency and protects the charity’s reputation.

Safeguarding and Risk Management

Trustees are responsible for identifying risks to the charity and putting in place appropriate safeguards. This includes:

• Protecting vulnerable beneficiaries

• Ensuring compliance with data protection and health and safety requirements

• Maintaining appropriate insurance cover

Regular risk assessments help trustees anticipate and mitigate potential issues.

Charity Law and Operational Responsibilities

Trustees must ensure the charity:

• Operates within the law

• Adheres to its governing document

• Meets employment and volunteer management requirements

• Understands fundraising obligations

Failing to meet these standards can expose the charity to legal action or reputational harm.

Training and Trustee Support

Trustees do not need to be experts in every area, but they must understand their duties. Ongoing training and access to professional advice help trustees make sound decisions and remain compliant with evolving charity law.

How Applegrow Can Help

Trustees carry significant responsibilities, but they should not carry them alone.

Applegrow Financial Advisors offers support with:

• Governance reviews and best practice guidance

• Financial reporting and control systems

• Charity accounting and compliance

• Risk management and policy development

• Preparation and submission of regulatory returns

Our tailored advice helps trustees focus on their mission while maintaining robust, compliant operations.