When a charity's trustees sit down to review their D&O or Trustee Liability insurance, they usually think about the named board members around the table. Under the Charities Amendment Act 2023, that mental model is no longer adequate. The expanded definition of "officer" means that personal governance liability in the charity sector now reaches further than most organisations have planned for.
The Old Definition and the New One
Before the Charities Amendment Act 2023, the concept of "officer" in the charitable sector context was broadly understood to mean formally appointed trustees, board members, or committee members — the people whose names appear on the charity's governance register and who are formally accountable to Charities Services.
The 2023 Amendment expanded this. Under the new framework, an officer includes any person who has, or who regularly exercises, significant influence over the management or administration of a charity. The key word is "regularly exercises." This is a functional test, not a formal one — it turns on what a person actually does, not what their title says.
Who Might Now Be an "Officer"?
The expanded definition is broad enough to potentially capture a range of people in a charity who would not traditionally have thought of themselves as carrying governance liability. Consider these scenarios:
A chief executive or executive director who makes operational decisions with significant financial or programme implications without routinely referring them to the board. The formal governance structure says the board is in charge — but in practice, the CEO exercises significant management influence.
A long-serving programme manager who has accumulated de facto authority over a significant part of the charity's operations. Their decisions affect staff, beneficiaries, and expenditure. They are never formally consulted as a governance matter — but functionally they exercise significant management influence.
A trusted patron, advisor, or founder who, while not formally on the board, is regularly consulted before major decisions are made and whose views effectively determine those decisions. Their influence is informal but significant.
In each case, the question is whether that person "regularly exercises significant influence over the management or administration" of the charity. If the answer is yes, they may be an officer under the Act — with the duty and liability consequences that come with it.
What Officer Status Means for Liability
Officers of registered charities carry duties under the Charities Act 2005 as amended. These include duties of good faith, duties to act within the charity's purposes, and duties relating to financial management and compliance. Breach of these duties can result in:
- Personal liability for losses caused to the charity
- Regulatory action by Charities Services, including disqualification from acting as an officer
- Investigation and potential prosecution in serious cases
- Civil claims from donors, beneficiaries, or creditors of the charity
The Charities Amendment Act 2023 specifically introduced the power to disqualify individual officers without deregistering the charity — a targeted enforcement tool that makes individual officer accountability a real and practical consideration, not a theoretical one.
The Insurance Gap: Are Your New "Officers" Actually Covered?
This is the critical question. Most Trustee Liability (D&O) policies for charities are structured around named insured persons — typically the formally appointed trustees or board members. The policy schedule lists who is covered: "all present, past, and future directors, trustees, and officers of the organisation." In practice, these schedules are written with the traditional understanding of "officer" in mind.
Whether the newly expanded definition of officer — the functional test that reaches to senior staff, key volunteers, and influential advisors — is captured within your existing policy wording is a question that deserves a direct conversation with your broker. Some policy wordings will capture the broader definition; others may not without endorsement.
There is also an employment liability dimension. Senior staff who are now arguably officers face both governance liability (the Charities Act officer duty) and employment liability (their employment relationship with the charity). These are different risks that may require different covers. If a senior manager is now an officer for Charities Act purposes, does the charity's D&O policy respond to a claim against them in that capacity — or is that claim treated as an employment matter under employers liability? The interaction between these policies is worth examining carefully.
A Practical Checklist for Charities
Given the expanded officer definition, we recommend working through the following with your broker:
- Map the people in your organisation who exercise significant management influence — not just formal trustees
- Review your D&O policy wording for the definition of "insured persons" and whether it captures the functional officer test
- Check whether your policy covers regulatory investigation costs under the Charities Act — not just civil litigation
- Consider whether your policy limit is adequate to protect all potentially exposed individuals, including senior staff
- Ensure that newly identified "officers" are aware of their potential status and the responsibilities it carries
Governance is not just a board-level responsibility. For many charities, the expanded officer definition makes it a whole-of-leadership responsibility — and insurance programmes need to reflect that.
To discuss your organisation's cover and whether all your officers are protected, get a quote from one of our specialist charity insurance brokers.
About the Author
The CharityInsurance Crew — the CharityInsurance crew are your friendly insurance geeks on a mission to make specialist cover simple and accessible for every NZ charity, sports club, and community organisation.