The seven principles of trustee decision-making were not written by the Charity Commission. They come from the courts, developed over years of reviewing decisions trustees had already made.
That matters for how you use them. They are the test applied to your board after something has gone wrong – which makes them the most useful checklist to work through before it does.
And there is a piece of reassurance in here that gets lost. The Commission does not expect trustees to see into the future, and it is only interested in what you could reasonably have known at the time. If concerns are raised, it will look at how you decided, not just what you decided. A good process protects you even when the outcome is bad.
If board decisions in your charity keep getting revisited, deferred or quietly undone, that is a governance problem rather than a decision problem.
Seven questions, asked in proportion
The principles overlap and depend on each other, and CC27 is clear that you apply them proportionately – a decision about a room booking does not need what a decision about selling a building needs.
1) Do we have the power to do this?
Powers come from your governing document, from the general power to spend funds on your purposes, and from the law. Check for extra rules attached to the power, and use powers only for their intended purpose. If you are not sure, get advice.
2) Are we acting in good faith?
Honest intentions, only in the charity’s interests. Sharing everything relevant to the decision. Saying so when you do not understand. The clearest example of the opposite is choosing a more expensive supplier because they are a friend.
3) Are we sufficiently informed?
How much information is enough depends on the impact, the cost, the complexity, whether it will be controversial, and how urgent it is. This is where consultation belongs too – with beneficiaries or others significantly affected, on the understanding that trustees still make the final call.
4) Have we taken account of everything relevant?
Your purposes, the options including doing nothing, the costs and risks of each, the impact on beneficiaries, the short and long-term effects, reputation, whether you can actually afford to see it through, and what it would cost to change your mind later.
5) Have we set aside what is irrelevant?
Personal feelings and prejudices, mainly. CC27 gives a harder case worth thinking about: local objections to a land sale on environmental grounds, at a charity whose purposes have nothing to do with the environment. Irrelevant on the face of it – except the objections may affect local support, which makes reputation a relevant factor after all.
6) Have we managed conflicts of interest?
Decisions must not be influenced, or appear to be influenced, by a trustee’s personal interests or those of people connected to them. Where a conflict cannot be managed, you may not be able to proceed at all without Commission authority. The practical steps are in conflicts of interest in practice.
7) Is this within the range of decisions a reasonable board could make?
Not the single right answer – sometimes more than one option is defensible. The test is whether you gave it enough time, had what you needed, considered the risks, took advice where it was warranted, and can justify what you chose.
Board decisions that never quite settle?
When decisions get revisited a fortnight later, or nobody is sure what was actually agreed, the cause is usually a process gap rather than disagreement. A free Charity Consultation will help you find where yours is.
Advice, and choosing not to take it
If you get professional advice, three things follow. Check the adviser has the right skills or qualifications. Give them everything they need. And record how you chose them, what they said, and what you did about it.
You stay responsible for the decision either way. But having considered and acted on appropriate advice is likely to protect you.
You are also allowed to decide against advice, or not to seek it where it might have been expected. If you do, record why that was in the charity’s best interests. That record is the whole of your defence if the decision is later questioned.
Everyone is responsible, including the trustee who voted against
Trustees decide jointly. And you are jointly responsible for a decision even if you did not attend the meeting, did not take part, or voted against it.
That is not widely understood and it changes how disagreement should be handled.
Constructive challenge is a sign of a healthy board, and CC27 says trustees should exercise independent judgement and disagree where they believe a decision is not in the charity’s interests. But the starting point has to be the charity’s interests rather than personal beliefs. And once a decision is made, all trustees should follow it.
If you disagree strongly, ask for it to be recorded in the minutes. Occasionally the disagreement is fundamental enough that resignation is the only option – but that is a last step, not a first one.
Delegation, and the Chair acting alone
Most charities can delegate decisions to staff, sub-committees or individual trustees. The board stays responsible and accountable for all of them.
Delegation needs terms of reference setting out what the delegate can decide and when they must report back, plus clear reporting lines. High risk or novel decisions should not usually be delegated at all.
Chair’s actions deserve their own mention because small charities use them informally. If your governing document allows the Chair to make urgent decisions between meetings, the board should agree a written policy covering when the power can be used, what the Chair must do when using it, and the requirement to tell the other trustees. Trustees should then review and confirm those decisions at the next meeting.
An informal habit of the Chair deciding things between meetings, with no policy and no confirmation, is a governance weakness waiting to be found.
The record is the evidence
None of the above helps if nothing was written down.
Minutes should be detailed enough for someone else to understand the issue and the reasons, with more detail where the decision was significant, and copies of any papers referred to attached. Decisions made outside meetings need recording too.
What that looks like in practice – the resolution wording, the reasons, the information relied on, conflicts and how they were handled, dissent where a trustee asks for it – is covered in charity meetings and minutes. Our Trustees Meeting Minutes Template is built around exactly these requirements if you would rather not construct it yourself.
The point is not bureaucracy. A decision with no record of the reasoning is a decision you cannot defend, and the reasoning is what the Commission looks for.
When things go wrong
Some decisions do not work out. That alone is not a failure of duty.
Where concerns reach the Commission, and it takes them forward, it will look at whether trustees followed the principles. It may look at the decision itself, but it will always be interested in how you got there.
The consequences where a decision is invalid or overturned are real: the charity may lose money, and trustees may be jointly liable to make it good. For charitable companies, there are company law duties on top.
There is also a route worth knowing about. For genuinely complex or high-risk matters – an unusual transaction, or uncertainty about whether you have the power at all – you can apply to the Commission for formal advice under section 110 of the Charities Act. Follow that advice in good faith, and you are treated in law as having acted properly.
This article is general information for UK charities and not legal advice. It summarises Charity Commission guidance that applies in England and Wales; charities in Scotland and Northern Ireland should check OSCR and the Charity Commission for Northern Ireland. Anything involving a contested decision, a complex conflict, or a possible breach of duty should go to a solicitor.
If the underlying issue is that nobody is sure who decides what, that is a scheme of delegation question – and a one-off governance project is usually enough to settle it.
