The Charity Commission has published refreshed guidance on paying trustees, stressing that if this decision is taken, it must be clearly in a charity’s best interest.

The regulator’s updated CC11 guidance aims to make the legal position on paying trustees clearer and to help charities navigate potential risks.

The commission said the underlying rules on trustee payments had not changed and the redesigned guidance continues to stress that it must be clearly in a charity’s best interest to pay a trustee, or a person connected to them.

All other options must have been carefully considered, the charity must have legal authority to pay and the resulting conflict of interest must be managed, the guidance says.

The refreshed guidance is split into a range of trustee payment scenarios, including supplying goods or services to the charity, loss of earnings and being employed.

The regulator said the guidance has been redesigned to “help trustees think through the issues and risks and determine if they have powers they can use or if they need authority from the Charity Commission”.

The guidance warns that paying a trustee can attract criticism within or outside of the charity, which could become public and affect the organisation and its funding. 

It also warns charities that there is a risk that a paid trustee may become overly influential, a risk that could increase if the trustee is the charity’s founder or chair, a long-serving trustee, or connected to other board members.

“This is important because commission casework has shown that having an overly influential trustee can make it difficult for trustees to comply with their legal duties,” the guidance says.

Other risks mentioned in the guidance include the charity being seen as a way of benefitting certain individuals, not complying with legal requirements such as the rules on conflicts of interest and board disagreements about whether or not to pay a trustee.

The regulator urged charities to manage risks by reviewing the guidance, properly managing performance in line with their written agreement regarding trustee payments, ensuring that payments stop when they should and keeping a full record of why they made the decision to pay a trustee.

It also calls for charities to consult before looking to pay a trustee, explain their decision if it is criticised publicly and follow the rules on disclosing payments in charity accounts.

Paul Latham, director of communications and policy at the regulator, said: “The charity sector is founded on public trust – and voluntary trusteeship is a key component of that. The vast majority of trustees are unpaid and give their time willingly and enthusiastically.

“However, some charities will face circumstances where they consider whether to pay one or more trustees. It is vital that they get these decisions right and comply with the law on paying trustees or people or organisations connected to them. 

“With the launch of this redesigned guidance, we hope to make the legal position on paying trustees even clearer, while helping trustees understand what’s expected of them when reaching these decisions.”

The guidance separates out information on trustee expenses into a distinct guide, with the regulator stressing that expenses do not constitute trustee payments.

Trustees are entitled to have reasonable expenses reimbursed by the charity, the regulator said. 

Travel and accommodation are common reasons for claiming expenses, but the guidance adds that expenses may also include costs for things like childcare or adjustments for trustees with disabilities.

Latham said: “While trustees are not required to claim them, in making clear that trustees can do so, charities may avoid putting off good candidates from joining their board because of the financial impact.”