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.
More on financial management

 
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.
More on roles and responsibilities

 
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.
More on governing documents

 
Insurance

The Management Committee ensures that the organisation has adequate and appropriate insurance coverage.
More on insurance

 
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.
More on incorporation

 
Good employment practice

The Management Committee is a responsible employer, setting fair personnel policies and meeting all legal requirements.
More on employment practice

 
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.
More on managing risk

 
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.
More on meetings

 
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.
More on board effectiveness
More on reviewing and renewing

 
Professional advice

The Management Committee seeks professional or expert advice on issues it is not confident to deal with.
More on seeking information and advice