The law and chief executives

The chief executive is not usually a trustee of the charity. This is because there are restrictions placed on trustees receiving benefits from the charity. These restrictions include situations where a trustee is also a paid employee of the charity.

The trustees are legally responsible for the charity. The chief executive should take care not to cross the boundary between board and staff roles and become a de facto or shadow trustee. This is a serious but rare occurrence. 

A de facto or shadow trustee is an individual that acts like a directing trustee, instructing the board or authorising board decisions. They will have the same responsibilities and liabilities as other trustees.

The chief executive works closely with the trustee board, regularly attending board meetings and providing information, progress reports, advice and support to the board. This is different from actually instructing the board.  However, the chief executive should nevertheless ensure they do not dominate the trustee board’s decision-making role.

Although the chief executive, as an employee, is not usually a trustee, they do have a responsibility for their own health and safety and for the health and safety of others who might be affected by their actions (or lack of action).

The Corporate Manslaughter and Corporate Homicide Act 2007 created a new statutory criminal offence of ‘corporate manslaughter’ for incorporated organisations (including charitable companies and other incorporated charities) causing death through gross negligence.

It is possible that the Act might extend to a chief executive and/or senior manager who are not trustees but take a significant role in making decisions or managing activities in a charity.