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Introduction to the Charity Governance Code

20th October 2021

Introduction to the Charity Governance Code

Over the next seven weeks, Kirsty McEwen in our Charity and Not For Profit team will be taking an in-depth look at the Charity Governance Code.

In a series of articles aimed at educating and inspiring charity leaders, Kirsty will be examining a wide range of topics from leadership to integrity, board effectiveness to openness and accountability.

Keep an on our pages every Wednesday for the latest article. For now, we set out what the Charity Governance Code is and what it is designed to do.

What is the Charity Governance Code?

  • The Charity Governance Code is ‘best practice’ guidance which is designed to help charities achieve the highest level of governance.
  • The Code is designed for use by any charity in England and Wales.
  • It is designed to build upon the minimum legal and regulatory requirements which charities are subject to.
  • Compliance with the Code itself is not obligatory, however, it has been endorsed by the Charity Commission.
  • It sets out the governance standards which a charity should be striving to achieve.
  • Good and effective governance is important for charities to ensure that they are best achieving their aims and fulfilling their purpose.
  • Charities should be striving to meet the standards and recommendations set out by the code. Their practices should be under regular review and the code should be used as a tool to identify areas which require improvements.

The Structure of the Code

  • The Code is made up of seven principles. Application of these principles builds upon the foundation that the trustees are complying with their legal and regulatory responsibilities.
  • The principles are:
    • 1. Organisational purpose
    • 2. Leadership
    • 3. Integrity
    • 4. Decision-making, risk and control
    • 5. Board effectiveness
    • 6. Equality, diversity and inclusion
    • 7. Openness and accountability.
  • Principle 1: Organisational purpose is the overarching principle which is the overall goal the charity is working to achieve.
  • Compliance with principles 2 – 6 will encourage a charity to engage in good practices and governance which in turn will further its organisational purpose.

Update

  • The Code has undergone a refresh in December 2020.
  • The update focused mainly on two main principles:
    • Principle 3: Integrity
    • Principle 6: Equality, diversity and inclusion
  • The refresh of the code is based on a consultation with key players in the Charity Sector.
  • The Code aims to remain relevant and sustainable by reinforcing developments in society into the charity context.
  • Ultimately, the Charity Governance Code wishes to offer charities the best guidance and recommendations for their governance. Compliance allows charities to best achieve their purpose.

 

 

 

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