Trustees’ Legal Duties: Reasonable Care and Skill

“As a general rule, a trustee sufficiently discharges his duty if he takes in managing trust affairs all those precautions which an ordinary prudent man of business would take in managing similar affairs of his own”

Speight v Gaunt  (1883) 9 App Case 1, 19 per Lord Blackburn. 2

The standard that has been applied to charity trustees in acting with reasonable care and skill was established many years ago. Obviously, we can modernise the standard by applying gender neutral wording - that all trustees should act with reasonable care and skill and take the precautions that an ordinary prudent person of business would take in managing their own affairs.

Anyone who would have specialist knowledge such as a legal advisor, accountant or auditor may be held to a higher standard in respect of any decisions or knowledge that they should have applied in their role as trustee.

Acting with reasonable care and skill does not necessarily mean that trustees need to know the answers to all the issues that arise in their role as trustee. It means knowing when to seek specialist expertise to allow the board to be sufficiently informed when it comes to decision making.

Announcement

We are very excited to announce Trustees’ Week also marks the launch of HEY Charity, a new podcast dedicated to spotlighting local charity leaders and providing legal insights for the not-for-profit sector.

In partnership with the HEY Smile Foundation, this podcast will delve into the Voluntary and Community sector, featuring interviews with visionary charity leaders who are making a significant impact in their communities. 

The first episode features an interview with Smile’s Chair, Trish Dalby, discussing the vital role of trustees.

"HEY Charity" will be available on all major podcast platforms, including Spotify, Sound Cloud, Mix Cloud, YouTube, and Apple Podcasts.