Is the board liable for decisions based on misleading information from the chair? (Anonymous post 🤫)

Ocean King Staff Senior Community Executive at CharityConnect Posted 5 months ago

This question is from a member of our community that wishes to remain anonymous:

If the Board of Trustees makes a decision on the basis of information provided by the Chair, is the whole Board liable or just the Chair? The information provided by the Chair can be proven as wrong, purposely misleading and malicious.

Who is liable and does this constitute as a reportable serious incident given that the decision has compromised operational safety of the charity? Thank you

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Stuart Davis Staff PANEL

Consultant at Stuart Davis Group 5 months ago

Hello there,

On the liability question, yes and no. Yes, in the sense that all trustees are equally liable for the decisions of the charity. This is especially true if the charity is unincorporated, where all the trustees also hold financial liability. But, also no: you can defend yourself from any actions by proving that you acted in good faith based on the information provided, and that your decisions were in the best interests of your beneficiaries, given what you knew.

I should also note that if you have a particular relevant skill that should have been brought to bear - say, if you are a trained accountant, and the information presented was financial - then this would also be taken into account in any theoretical action against you. So you should also document anything relevant here.

On the serious incident: it is difficult to say for certainty without any specific information, but certainly "harm to your charity’s beneficiaries, staff, volunteers or others who come into contact with your charity through its work" is the first example that the Charity Commission gives as something that is reportable. This is whether it is actual or alleged, or whether it happens or creates a risk of it happening.

But the nub here is that the incident has to be "significant", and that is very much related to the context of your charity, how and where it works, and the impact of the incident.

Hope that helps.

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