The new Charity Governance Code is out. What is it, how does it affect you and what should you be doing about it. Governance Weekly special for 20th July.

“Governance Weekly” for this week focuses on a very specific theme – the publication last week of the “Charity Governance Code”. This new Code – a rework from the older but well respected (but dated) “Code of Good Governance” is of real relevance to every voluntary sector organisation – whether a formal charity or not. And it’s relevant whether you are the Chair of your trustees, or a trustee of a charity or a committee member of a non-charity or on the management team of a voluntary sector organisation.

There’s lots to share about this new Code and it’s going to mean some reading and effort on your part. So below is an outline of the key information you need to get started and we can help more because on Friday 28th July I’m running a short Workshop at VANEL to specifically dive into the Charity Governance Code and help you to understand more about it’s impact and application. (Further details about this session below).

What is it?

Charities (and voluntary groups) have always been encouraged and supported to self-analyse, self-develop and to improve their governance approaches and practices so that they are as well governed as possible. Good Governance is good for everyone involved with a charity and can really help long term with funding, with sustainability, with effectiveness, with impact and more.

The Charity Commission has previously published guidance such as the “Hallmarks of an Effective Charity” and for the past 8 years or so there has been a nationally recognised “Code of Good Governance” for the sector to follow.

This new “Charity Governance Code” replaces both this original code and the “Hallmarks” document from the Charity Commission. It’s based on the original code but has been thoroughly reworked, refreshed and brought more into relevance for now. After a year of consultations and reworks it was finally formally published on 13th July 2017 and endorsed nationally by a wide range of sector representatives as well as the Charity Commission who are firmly behind this.

More about it

It’s a very open guidance with a detailed website here including all the information, extra resources and downloadable .pdfs.

Download the full .pdf here or the code for smaller charities here.

There are versions for bigger charities (perhaps > £1m turnover, with staff, maybe other obligations), and for the smaller charities. Pick the version most relevant to you.

It’s guidance, NOT mandatory. It’s optional – whether you read it, learn from it or apply it is up to you. BUT I guess over time it’s going to become more noticeable (especially to funders) which charities do and don’t comply with the Code.

What does the Code cover?

Essentially the Code breaks down the role of a trustee into a number of core responsibilities. (See image below)

Charity Governance Code principles

Each of these areas explain what it necessary for an organisation to be able to demonstrate good governance. Some of the requirements are slightly less demanding for smaller organisations. And because these requirements are about ‘governance’ they can be equally well applied for organisations that are not formally registered charities. Hence, my suggestion that any board or committee with governance oversight for their organisation should be considering assessing the Code.

Key recommendations

A number of articles have been highlighting the key new changes, requirements or recommendations from this new Code. These are generally new and will be recognised as such by anyone familiar with the older Code of Good Governance.

An article here has a useful overview of the Code.

Key recommendations are:
An agreed term of office for Trustees – ideally not for more than nine years. If longer than this, a rigorous review should take place and the Trustees’ Annual Report should explain the reason for the longer term of office taking into consideration the need to continually refresh the board of trustees.
Encouraging Trustees to review their own performance and that of other trustees, to include the chair. In larger charities it is recommended this happens every year, with external evaluation every three years.

Publishing the process of setting remuneration for senior staff on charities’ websites and in their annual reports.

Considering carefully diversity on the board and ensuring they recruit a range of skills and experiences.
Highlighting the key role of the chair and the vice chair in supporting charities to achieve good governance.

Identifying and dealing with and recording conflicts of interest and loyalty, to include a register of interests, hospitality and gifts.

Placing greater emphasis on the need for openness on charity boards.

Trustees having greater oversight of any subsidiaries established by their charity and any agreements with third party service providers, such as for fundraising or data management.

An important principle being encouraged is that every Charity Annual Report statement from the Trustees should include details of how that Charity either meets and applies the Code in practice or is able to explain why the Charity chooses not to apply parts of the Code. Although this suggestion to make this statement within your Annual Report is not mandatory, I can see this becoming required practice over the longer term. Worth getting a start on this now!

Next

So, for now, start exploring the Code to learn more and have a read of a few outlining articles which summarise beyond what I’ve covered here.

NCVO has been leading this process.  Read their introduction to the new code here.

Civil Society introduces the Code here.

More on Third Sector here.

Or on Charity Times here.

The Code itself is on the website here.

Training

Friday 28 July – “Developing governance by using the Code“
At VANEL offices, Grimsby.  £20 per person (£30 for non-members). Booking essential via karl@vanel.org.uk.

As mentioned, this course – “Developing governance by using the code” is on 28th JulyCome along to our workshop to find out much more about the new Code and learn how to use it as a powerful way in which your board or committee can make your governance approach even stronger.

A reminder also that if you have new(er) trustees or trustees that need a refresher about their role, then our next “Induction and Refresher Training for Trustees” courses have been scheduled. All the details are here and the next dates are Tuesday 1st August or 24th November.

“Governance Weekly” is our weekly roundup from VANEL on good governance, charity trusteeship and non-profit leadership. News, information, resources and ideas. Complemented by our monthly “View from the Top” e-newsletter (Trustee Network members only), our “aboutgovernance” online discussion space for leaders and trustees and our @aboutgovernance Twitter feed.

Karl Elliott, Development Manager
karl@vanel.org.uk / 01472 287548
www.vanel.org.uk/governance – for an overview of our resources and information
www.vanel.org.uk/trustees – for the Trustee Network blog and information
www.theviewfromthetop.org.uk – our Governance blog
www.vanel.org.uk/aboutgovernance – private discussion space for trustees
@aboutgovernance