Guidance

Employing a trustee or connected person

Published 25 April 2025

Applies to England and Wales

Being a trustee is generally a voluntary role. This is what makes the charity sector unique and promotes trust and confidence in charities. As a result, external reaction to paying trustees is often negative.

There are legal rules that apply to paying trustees. If you wish to employ a trustee, read this guidance to understand:

• the rules, including having a power or authority (legal permission)
• the risks of paying trustees, for example public criticism
• the extra risks that come from employing trustees or people connected to them

You must follow the rules even if the arrangement benefits the charity.

Follow the rules when:

• employing a trustee who will stay as a trustee
• employing a trustee who will resign as a trustee, or has resigned but was involved in decisions about the role
• employing a person who has a relationship with a trustee (‘connected person’)
• it is a company that the charity owns or controls that is employing the trustee or connected person

If you do not follow the rules, those who received the payment, or all the trustees, may have to repay the charity.

You should understand what it means to ‘pay’ a trustee. It means:

• giving financial rewards such as a salary, fees, a stipend and/or
• giving other benefits, such as free use of equipment or property or free access to services that people normally have to pay for

You may have to name the trustee or connected person you paid  and what you paid them in your charity’s accounts. Your charity’s accounts become public information.

This guidance applies to all charities.

Overview

This overview sets out the key steps. Don’t just rely on this overview. Make sure you read the guidance. 

Step 1: You must, as trustees, consider that it is in your charity’s best interests to employ the trustee or connected person. 

Step 2: When you make the decision, you must manage the conflict of interest.

Step 3: You must have a power or authority to employ:

• a trustee who will remain as trustee
• a trustee who has resigned or will resign as a trustee to take up the role
• a former trustee who was involved in decisions about the role
• a  connected person

You need  a power or authority where the employer is the charity’s subsidiary.

If your charity is a charitable company, check if extra company law rules apply.

Step 4: Make sure you record your decision.

Step 5: Follow the rules on disclosing trustee payments in your charity’s accounts.

Make the decision

Step 1: As trustees, you must consider that employing a trustee or connected person is in the charity’s best interests.

To help you do this, think about the following.

Appoint the best person for the job

You should carry out a fair and open recruitment process to help you appoint the best person for the job. Check:

• that a trustee has not – directly or indirectly – influenced you to create or keep the job
• that the skills and experience you are looking for meets the needs of the role, not a particular person
• how you will advertise the job, so the best candidates apply
• how you will assess candidates, so that you pick the best person

Do not:

• create a job in order to benefit a trustee, or
• use employment as a way to pay a trustee for carrying out their trustee duties

A trustee who is interested in the post for themselves or for a connected person should not be involved in:

• making decisions about the job, such as how to recruit or its pay, or
• any activities like writing the job description

Any trustee or connected person applying for the role should not have an unfair advantage.

You must comply with employment law. Get relevant professional advice if you need it.

Ensure that pay is reasonable

The pay package should be reasonable and in your charity’s best interest. If it is a new role, compare the job with similar jobs at similar charities, or get specialist advice.

Check that your charity can afford the pay package.

Ensure it is the trustees who make the decision

Employment decisions at your charity may be made (depending on the role) by employees, by trustees or by a mix of both. If you are thinking of employing a trustee or a connected person, the trustees should make that decision. The trustees must:

• consider that it is in the charity’s best interests to employ the person and that they can manage the risks (step 1)
• manage the conflict of interest (step 2)
• have a power or authority to pay the trustee or connected person (step 3)

Use our decision-making guidance for trustees to help you. 

Manage the risks

You must manage the risks, especially if the person will continue as a trustee.

Paying trustees introduces risks, and this type of payment introduces specific risks. One risk is that the paid trustee becomes overly influential on the trustee board. Another is not being able to properly assess the trustee’s paid work because of their trustee role.

These risks increase significantly if:

• the trustee being employed is the charity’s founder or chair, or a long serving trustee
• the paid position at the charity is senior. For example, the chief executive
• the paid position is permanent
• the trustee being employed is connected to other trustees at the charity, for example by being family members

Commission casework has shown that having an overly influential trustee can make it difficult for trustees to comply with their legal duties. If you need Commission authority, we will usually require that the trustee resigns as a trustee because of this risk.

Other risks include:    

• the charity being seen as a way of benefitting particular individuals, especially if you regularly pay trustees
• criticism from within or outside your charity. This could become public criticism and could affect your charity and its funding
• not complying with legal requirements including the rules on conflicts of interest
• trustees disagreeing about whether to pay a trustee

You must manage the risks. For example, by:

• reading this guidance and making sure you follow the rules
• recruiting in a way that helps you pick the best person for the job
• making sure you pick the best person for the job
• asking the trustee to resign as trustee as a condition of accepting the job
• keeping a full record of why you made your decision
• explaining your decision especially if it is criticised in public
• following the rules on disclosing payments in your charity’s accounts

Manage the conflict of interest

Step 2: You must manage the conflict of interest when you make your decision.

When trustees are paid, they have a conflict of interest each time you make decisions about that payment.

In this situation, the following will have a conflict of interest:

• the trustee who is being employed
• any trustee who has a relationship with the person being employed, both where:
  • there is financial interdependence. For example, partners who have joint living costs
  • there is no financial interdependence. For example, a son or daughter who does not live with the trustee

There can be more than one trustee who is conflicted. Make sure you identify them all.

You must manage all conflicts of interest :

• when you make the first decision to appoint the person
• when you make any later decisions, for example whether the role should be kept

Use our guidance about conflicts of interests to help you.

You must still manage the conflict of interest even if:

• employing the trustee or connected person benefits the charity
• you have a power or authority, as explained in the next section

Check you have a power of authority

Step 3: You must have a suitable power or authority (legal permission) to employ a trustee or connected person.

You will need to:

• carefully check what your governing document says

• understand who you are looking to employ:

If, after reading this guidance and looking at your governing document, you are not sure, get legal advice.

1. Employing a trustee who will remain as a trustee

1.1 Your governing document includes a power you can use

If your governing document has a clear power to employ a trustee you can use it.

If it sets out any rules, you must follow them. For example, it might say you must get the Charity Commission’s consent first. This is called a ‘conditional power’.

If your power only mentions sections 185-188 of the Charities Act 2011 (which is about trustees being paid for supplying goods or services to the charity), you cannot use it to employ a trustee. Read 1.2.

1.2 Your governing document does not include a clear power or contains a prohibition

You will need authority from the Charity Commission if your charity’s governing document:

• does not contain a clear power to employ a trustee, or
• contains a prohibition

A ‘prohibition’ is any wording or clause that indicates trustees cannot:

• be employed by the charity, or
• receive any type of payment or benefit (or ‘remuneration’) from the charity

Read some example scenarios.

Apply for authority

2. Employing a trustee who has resigned or will resign

Unless your governing document contains a clear power, you must get authority from the Charity Commission where:

• the trustee has resigned as a trustee, or has agreed to resign, but after you offered them the job
• the trustee resigned as a trustee before you offered them the job, but they were involved in activities or decisions about it when they were a trustee. For example, the decision to create the job, writing the job description or deciding what its pay will be

Read some example scenarios.

Apply for authority

3. Employing a connected person

You will need to check whether your governing document:

• contains a power you can use - read 3.1
• does not contain a power - read 3.2
• contains a prohibition - read 3.3

3.1 Your governing document includes a power you can use

If there is a clear power  in your governing document to employ a connected person, you can use it. Make sure you:

• check that the power covers the relationship between the trustee and the person you are looking to employ. For example, if you are looking to employ a trustee’s son or daughter, the power must refer to employing trustees’ children. If it does not, read 3.2

• follow any rules that the power sets. For example, it might say you must get the Charity Commission’s consent first. This is called a ‘conditional power’

3.2 Your governing document does not contain a suitable power

If there isn’t a clear power to employ the person, you will need authority from the Charity Commission if the trustee and the person you are looking to employ are financially interdependent. For example, they share living costs.

If they are not financially interdependent you do not need our authority as long as you manage the conflict of interest.

3.3 Your governing document contains a prohibition

A ‘prohibition’ is any wording or clause that indicates a connected person cannot:

• be employed by the charity, or
• receive any type of payment or benefit (or remuneration) from the charity

Check that the prohibition covers the relationship between the trustee and the person you are looking to employ. You will need authority from the Commission when:

• the prohibition covers the relationship, or
• the prohibition does not cover the relationship, but they and the trustee are financially interdependent

If they are not financially interdependent you do not need Commission authority as long as you can manage the conflict of interest.

Further guidance

Read some example scenarios.

If your charity is a company, check if extra company law rules apply.

Apply for Charity Commission authority

Read this guidance to understand what the Commission expects when you make a decision about employing a trustee or connected person.

If you need authority (or consent to use a conditional power), you will need to tell us:

• who you want to employ
• whether they are a trustee and whether they are the chair
• whether they are a connected person, who are they connected to and how they are connected
• whether they have resigned as trustee, when they resigned, and what involvement they had in the recruitment of the role before they resigned
• why they have not resigned as a trustee
• why you need authority
• about the role, for example job title, duties, hours, whether it is permanent or temporary
• if it is a new role, why the charity needs this role
• if the role is a new role but previously undertaken by a volunteer, why have you decided it should be a paid role
• what is the pay package
• if a new role, how you decided on the pay package
• if an existing role, whether you changed the pay package and why
• how the pay package is reasonable and in the charity’s best interest
• how you recruited for the role
• how you will manage the person’s performance
• if other trustees at your charity are paid; why they are paid; and how much you pay them. Tell us what proportion of your trustees are currently paid
• the risks you have identified and how you will manage them
• that you made the decision in line with your governing document rules. For example, that the meeting was quorate
• how you managed the conflict of interest
• why the proposed employment is in the best interests of your charity
• whether your governing document contains a prohibition or a conditional power as explained in this guidance

As explained above, if the trustee has not resigned, the Commission will usually require them to resign as a trustee.

If you need authority because you cannot manage the conflict of interest, you will need to:

• provide the information listed above about how you made the decision and how it is in the charity’s best interests
• tell us if your governing document contains a power to employ
• tell us why you cannot manage the conflict

Make one application if you need authority to employ and to manage a conflict.

Apply for authority.

Extra guidance for charitable companies

Only read this section if your charity is a charitable company.

Check if your charitable company (or its subsidiary) will employ a trustee using a contract (including a permanent contract) that guarantees them, or may guarantee them, at least 2 years’ employment.

A subsidiary is a company that the charity owns or controls.

If this applies to you, you must:

• get authority  from the Charity Commission under section 201 of the Charities Act 2011 , and
• under company law have your members’ approval

You can consult your members first. If you do, and your members approve the decision, their resolution must state that their approval is subject to getting section 201 authority.

If you need section 201 authority, you will need to explain why the arrangement is in the charity’s best interests.

Apply for authority. 

Record your decisions

Step 4 is about keeping a record of your decisions.

Keep a full record of your decisions and the reasons for them. For example, in the minutes of the relevant meeting. This can help show you followed the rules.

Keep a record of any Charity Commission consent or authority.

Disclose your trustee payments in your charity’s accounts

Step 5: Make sure you follow the rules on disclosure.

Charities that prepare accrual accounts

Your charity’s accounts must include certain details about payments and other benefits to trustees and connected persons. Check the Charities’ SORP or get professional advice.

SORP explains the accounting rules for charities that prepare accrual accounts.

Charities that prepare receipt and payments accounts

You should include details of payments you made to trustees and connected persons.

For example, who you paid, why you paid them, what you paid them, and the power or authority for the payment.

Check what type of accounts your charity must prepare.  

Appointing a charity employee as a trustee

There are advantages and risks to recruiting a trustee from your employees.

One risk is that they become overly influential amongst trustees. This risk increases significantly if:

• it is the chief executive or another senior employee who is being appointed trustee
• the trustee role they take up is the chair
• they are connected to other trustees, for example they are family members

Commission casework has shown that having an overly influential trustee can make it difficult for trustees to comply with their legal duties.

Other risks include:

• not being able to properly assess their paid work because of their trustee role
• public criticism of paying a trustee, even though the trustee was an employee first
• not managing conflicts of interest when they arise

If the employee has special knowledge or experience, you could ask them to attend trustee meetings instead of appointing them as a trustee. (They would not vote on trustee decisions).

If you do appoint them as a trustee, this must be in the charity’s best interests. Use our decision-making guidance to help you. 

Do you need Charity Commission authority to appoint an employee as trustee

You can appoint an employee as a trustee as long as your governing document does not say that a trustee cannot:

• be employed by the charity, or
• receive any type of payment or benefit (or ‘remuneration’) from the charity

If it does, you will need to remove this prohibition first.

Conflicts of interest

If you appoint an employee as a trustee, they will face a conflict whenever you make a decision that could affect them. For example, decisions about:

• all employee benefits or contracts
• their employee role

Any other trustee who has a relationship with the employee-trustee will also face a conflict of interest.

For example, an animal welfare charity employs one of its vets as a trustee. Their parent is also a trustee. Whenever the trustees make a decision that could affect the vet’s paid position, both the vet-trustee and their parent-trustee will face a conflict of interest.

Use our guidance about conflicts to help you.

Do you need Charity Commission authority for future pay increases

You do not need authority if increases are in line with your charity’s established pay and benefits policy. You should get Commission authority if:

• changes are outside your charity’s pay policy and/or
• pay increases, bonuses, or other benefits are substantial in the context of the charity

A charity’s subsidiary employing a trustee

A subsidiary is a company that the charity owns and controls.

Where a subsidiary is considering employing a trustee or a connected person, this guidance applies. Follow the rules in this guidance.  

Annex A: Examples

Here are some simple examples to show when Commission authority is needed and who has a conflict of interest.

Example 1

The charity is a school. Trustee A successfully applies for the role of caretaker at the school. The charity’s governing document does not say anything about employing trustees.

• Commission authority is needed because the governing document does not include a power that can be used.
• Trustee A faces a conflict of interest, which the trustees must manage.

Example 2

Trustee B successfully applies to be office manager. The charity’s governing document contains a prohibition against trustees receiving payment or benefit from the charity.

• Commission authority is needed because of the prohibition.
• Trustee B faces a conflict of interest, which the trustees must manage.

Example 3

Person A, a former trustee, successfully applies to be the charity’s safeguarding lead. Person A resigned as a trustee before the job was advertised, but they took part in the decision to create the role and what its pay should be. The charity’s governing document does not say anything about trustee payments or benefits.

• Commission authority is needed because, while Person A was not a trustee when they applied for the job, and they are not a trustee now, they took part in decisions about the role; and there is no clear power in the governing document that would allow the payment.

Example 4

The charity recruits a senior researcher. The successful candidate is married to a trustee (Trustee C), and they jointly manage their finances. The charity’s governing document does not say anything about employing anyone connected to a trustee.

• Commission authority is needed because the governing document does not include a power that can be used, and the successful candidate is financially interdependent with a trustee.
• Trustee C faces a conflict of interest, which the trustees must manage.

Example 5

The charity recruits a project manager. The successful candidate is the nephew of a trustee (trustee D), but they do not live in the same household. The charity’s governing document does not say anything about employing anyone connected to a trustee.

• Commission authority is not needed because, although the successful candidate is related to a trustee, they are not financially interdependent.
• Trustee D faces a conflict of interest, which the trustee board must manage.

Example 6

The charity recruits a new accounts manager. The successful candidate is the daughter of a trustee (trustee E). They do not live in the same household. There is a prohibition in the charity’s governing document that refers only to trustees’ spouses.

• Commission authority is not needed because the prohibition does not apply to trustees’ children and the daughter and trustee are not financially interdependent.
• Trustee E faces a conflict of interest, which the trustee board must manage.