TRUSTEES : THEIR ROLES AND RESPONSIBILITIES.....
( Article by Professor Hu Chi Ku Chi )


Many private , unincorporated social clubs have a set up which empowers the committee to manage and run the club, with trustees reassuringly there in the background with an crucial , overseeing guardianship role. 
Ideally , the trustees should diligently monitor the committee's capital and revenue expenditure,
ensuring that financial risks are kept to a minimum ,  as well as ensuring that the organisation has the necessary funding and reserves to carry out its intended activities.
Their primary focus must always be the long term survival of the club , and to advise the committee against taking any decisions, which could put the organisation's financial assets in jeopardy. In addition to that the trustees have a legal responsibility to ensure that the club is managed in accordance with the law , and its own governing documents , such as the Constitution and other binding policy statements. Moreover , they must always act in the best interests of the organisation and its wider membership , avoiding any conflicts of interest which could potentially arise. For instance awkward questions might be asked if a trustee had a close relative who was a committee member or officer , since the collusion and the exercise of undue influence could easily arise.
Trustees of an incorporated association, such as a private social club , do run a risk in respect to incurring personal liability should something go wrong. Club committees might for instance enter into very costly building contracts , and should these go belly up resulting in significant losses or pay outs , then the trustees in certain situations may find themselves personally accountable. Much depends of course on the precise wording of the Constitution with regards to their defined roles and responsibilities. Nevertheless , it makes good sense for clubs to obtain some form of Directors' and Officers ' Liability Insurance cover , which will provide protection against incurring personal liability.
Often clubs will have within their Constitution a rule, which enables trustees to be indemnified out of club funds , and this should hopefully provide another safeguard against incurring personal liability. If however a situation arises where the liability incurred by the club is not adequately covered by any insurance policy , and/or their total assets , there is still the threat that the trustees , along with the management committee and its officers , will be seriously out of pocket.
In conclusion , trustees have a fundamental duty to protect the club from serious financial risk . Caution and prudence are the two golden rules they must follow. They are entrusted to guarantee the club's long term future by making sure costly or risky ventures are never undertaken. Would any trustee of sound mind and intelligence sanction the decision of a committee to stake £60,000 on an evens favourite horse, or stake the same amount of money in some other kind of lottery ? Not a chance !. So what would anyone make of trusties who failed to stop a committee opting to fight a case in court , where the costs can frighteningly run into tens of thousands with the outcome being scarily uncertain ( especially when cheaper , damage limitation options were readily available earlier on ) ?