Board members – directors and trustees

Benefits of being a director or trustee

While occupying a place on a board is a serious undertaking, there are various positive aspects to the role that can help an individual on both a personal and professional basis, including:

  • the knowledge that you are contributing to a worthwhile cause – promoting sport and physical activity and bringing its benefits to your community
  • building self-confidence
  • gaining experience of committee work
  • acquiring new skills – personal and professional – through training and information sharing
  • the enjoyment to be had from working with a group of individuals from different backgrounds who share a similar passion for sport and for the purpose and impact which your organisation can have

The role is one that can offer considerable satisfaction, challenges and experiences, but it is worth remembering that it can be quite onerous and require a significant time commitment. Careful consideration as to whether you can meet that commitment should be given before taking up a position.

Responsibilities of board members

According to the Code for Sports Governance, the board is ‘collectively responsible for the long-term success of the organisation and exclusively vested with the power to lead it’ (Principle 1).

Broadly, members of the board should provide leadership to their organisation and should contribute to its overall governance and strategic direction. They play an integral role, through their decision making, in developing the organisation’s aims, objectives and goals, in accordance with the governing document, legal obligations and regulatory guidelines.

Board members need to work in partnership with the chief executive, management team and the governance lead to ensure that their decisions are acted upon and the organisation is managed effectively. All, especially the chair, should fully understand the difference between the role the board plays in governing, developing and agreeing the strategic direction of the organisation and that of the senior management team in applying that strategy to day-to-day operations. (For more on the differences between governance, strategy and management please refer to section 1 of the knowledge base – .)

Board members should scrutinise the performance of the management in meeting agreed goals and objectives and monitor the reporting of performance in key areas. They should satisfy themselves as to the integrity of financial and other information, and that quality, robust controls and systems of risk management are in place. They are responsible for determining appropriate levels of remuneration of staff and have a prime role in appointing, and where necessary removing, senior staff, and in succession planning.

Accountability

As the board are responsible for and liable for the governance and functioning of the organisation, they are accountable in varying degrees to a variety of stakeholders, including: members (where applicable), employees, beneficiaries, customers, suppliers, funders (including Sport England and UK Sport), regulators (e.g. the Charity Commission), and registrars (e.g. Companies House). Close attention must be paid to the governing document to ascertain the type of organisational structure and to the relevant legislation. These may indicate who some of the primary stakeholders might be. However, careful consideration must be given to the which have a legitimate interest in the organisation.

There is a growing demand within the sports sector and the wider general public for organisations to be open and accountable for their actions and inactions. Principle 3 of the Code for Sports Governance requires that ‘Organisations shall be transparent and accountable, engaging effectively with stakeholders and nurturing internal democracy’. The Charity Governance Code recommends that charities are open in their work unless there is good reason not to be (Principle 7) and that organisations take seriously their responsibility for building public trust and confidence in their work. The board should lead on this.

It could be argued that this is of even greater importance for organisations which receive investment from the public purse, or where particular benefits are derived from their status, such as those available to charities.

Evolving good practice should therefore lead board members to consider the wider implications of the decisions they make and to communicate effectively the formal reasons behind such decisions or actions. Above all else, they must adhere to any legal and regulatory requirements applicable to their organisation’s activities.

Now that we have covered the broad nature of the responsibilities held by directors or trustees, let’s look at some specific tasks of the role, starting with statutory duties and then more operational duties and responsibilities.

Statutory duties

Depending on the structure of the organisation, for example whether it is a company and/or a charity, and what is contained within its governing document, certain duties are defined legally.

 Directors duties (Companies Act 2006   ss. 171-177)

  Trustees duties (Charity Commission      CC3)

  • Act within powers
  • Promote the success of the company for the benefit of its members as a whole
  • Exercise independent judgement
  • Exercise reasonable care, skill and diligence
  • Avoid conflicts of interest
  • Not to accept benefits from third parties
  • Declare interest in proposed transactions or arrangements
  • Ensure the charity is carrying out its purposes for the public benefit
  • Comply with the charity’s governing document and the law
  • Act in the charity’s best interests
  • Manage the charity’s resources responsibly
  • Act with reasonable skill and care
  • Ensure the charity is accountable

 

SGA says

It is clear that there is a considerable degree of overlap between these two sets of duties. Of course, the board members of some organisations will be both directors and trustees.

It is worth noting the full text of as this indicates the range of stakeholders to which directors may have to give consideration when making decisions:

‘A director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (am

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