Charity Governance Code: Principle 5 – Board Effectiveness

20th December 2021

Charity Governance Code: Principle 5 – Board Effectiveness

Part five of our Charity Governance Code series sees Kirsty McEwen in the Higgs Charity and Not For Profit team explore Principle 5 – Board Effectiveness.

What does Principle 5 – Board Effectiveness mean?

  • The board works as an effective team, using the appropriate balance of skills, experience, backgrounds and knowledge to make informed decisions.

Why is it important?

  • The board has ultimate responsibility for the success of the charity. Therefore, its leadership, behaviour, performance and the culture it creates will directly impact the charity’s ability to achieve its aims.
  • The board needs an effective structure and processes in place to resolve challenges it faces.
  • The board possessing the appropriate skills, expertise and knowledge will be crucial to the success of the charity.
  • The board will make the most important decisions on behalf of the charity. Therefore, the board should be effective, collaborative and confident in its decision making.

How can we help?

  • Working as an effective team:
    • We can advise on practices and processes which will be suitable for the board of your charity, such as the regularity of meetings and how to ensure they are effective.
    • We can advise the chair of the board how best to conduct themselves in their role. This could include how best to plan for meetings to ensure the board have everything they need to make effective decisions.
  • Reviewing the board’s composition
    • We can make recommendations regarding how regularly the board should be reviewing their structure, processes and decision-making ability.
    • We can advise on what an appropriate size for the board is and also the necessary combination of skills and expertise required for the board to ensure effective performance as a unit.
  • Overseeing appointments
    • We can help to create a procedure which must be followed for all new trustee appointments.

Other tips

  • The board should regularly review their processes and effectiveness to determine if any improvements can be made.
  • Where differences of opinion arise, the board should ensure all viewpoints are respected and give consideration to each of their potential outcomes.
  • It is recommended that any board of a charity comprises 5-12 trustees.
  • The board should have objective criteria which is used when considering the appointment of any new trustee. The board should review what skills the board requires upon any new appointment.
  • The board should regularly review their performance and that of the chair. The trustees should be able to explain how they review their own performance.
  • Larger charities should be receiving specialist advice and support on their governance.





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