Checklist: Limiting liability
A Management Committee that has all of the following measures in place will have significantly limited the risk of personal liability.
Use this sheet as a checklist to assess how your committee measures up!
|
Area |
Features of good practice |
Yes? |
| Good financial management practices |
The Management Committee is accountable, understands its financial position, and sets clear financial procedures. Contingency funds have been built up so that sufficient reserves exist to meet potential liabilities such as premature termination of leases or staff redundancy costs. |
|
| Clear roles and responsibilities |
The Management Committee is aware of their roles and responsibilities. There are clear lines of responsibility, budgetary guidelines, good communication, written role descriptions and induction procedures. |
|
| Provisions in your governing document (e.g. constitution) |
The Management Committee works within its governing document. The document limits personal liability if committee members have acted reasonably and made an honest mistake that results in loss to the organisation. |
|
| Insurance |
The Management Committee ensures that the organisation has adequate and appropriate insurance coverage. |
|
| Incorporation |
Becoming incorporated (e.g. a company limited by guarantee) provides additional protection for Management Committee members although it does not protect against, for example, fraud or negligence. |
|
| Good employment practice |
The Management Committee is a responsible employer, setting fair personnel policies and meeting all legal requirements. |
|
| Risk management |
The Management Committee ensures that appropriate steps are taken to identify, assess and manage risk and potential hazards associated with the organisation, its activities and services. |
|
| Records of decisions taken |
Management Committee members check the minutes before agreeing them, particularly where decisions have been taken. The minutes are the legal record of the committee's decisions. |
|
| Board development and review |
The Management Committee regularly reviews its role and effectiveness, and keeps abreast of changes in law and practice. It provides an induction programme for new members. |
|
| Professional advice |
The Management Committee seeks professional or expert advice on issues it is not confident to deal with. |
