Administrative Powers - Power to Invest - Consideration of Ethical Investment
3 important questions on Administrative Powers - Power to Invest - Consideration of Ethical Investment
Cowan v Scargill [1985]
It was held that the trustees had committed a breach of trust by taking into account ethical consideration when considering the investment plan. The key duty of the trustees is to ensure that the investments provided the greatest financial benefits.
General Rule for Charity Trustees
There is a greater scope for such trustees to have regard to ethical considerations.
Harries v Church Commissioners for England [1992], Sir Donald Nicholls V-C identified following general principles relating to investments by charitable trustees
- When selecting investments, the trustees have a duty to further the purpose of the trust and should seek to obtain the maximum return by income.
- Exceptionally, if choosing certain types of investment would conflict with the aims of the charity the trustees should then not invest in such investments even if this would result in significant financial detriment to the charity.
- Exceptionally, purchasing certain investments might actually hamper the charity's work and so the trustees would not be expected to make such investments.
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