The Charity Governance Code steering group will be consulting later on this year on an update to to Code to try to improve it still further.

With what feels like a blink of an eye, its now two years since publication of the new edition of the Charity Governance Code. The Code, which is designed for all charities, is overseen by a steering group of sector infrastructure bodies and umbrella bodies, and I am the independent (in all senses) chair of that Group. (See www.charitygovernancecode.org)

The Code is voluntary – it is not a legal or regulatory requirement. Its aim, simply put, is to assist charities and their trustees to reach the highest standards of governance, and with an emphasis on inspiring charities to continually improve to be excellent.

We have been delighted with the overwhelmingly positive response of the sector to the 2017 edition of the Code. Recent research, published by RSM, examining take-up of the Code has found that 44% of larger charities (which the report defines as those with a turnover of more than £5 million) now include a statement about their adoption and use of the Code in their published trustee annual report. (See https://www.rsmuk.com/ideas-and-insights/decoding-the-charity-governance-code.)

The research also measured charities’ overall governance ratings. It found that the ratings were nearly 10% higher for those charities who are using the Code, compared with those who do not. We will use these powerful findings as further evidence to show the Code’s value.

As good practice, the Code needs to remain up-to-date and relevant, and much has changed in the two years since the new edition of the Code was published. Feedback is that the structure and key principles in the Code work well, and charities are still getting used to it. We also hear that there are detailed aspects of the Code which would benefit from a refresh.

In the autumn we will consult on these possible changes to the Code that might be made within its overall framework. Some potential changes that we’ve identified so far include:

  • Examining the relationship between the Code and the NCVO’s Ethical Principles. These Principles are designed to strengthen safeguarding, workplace practices and culture, and prevent incidents wherever possible. We are interested in views about how the Code might be updated to reflect these Ethical Principles. (See https://www.ncvo.org.uk/2-content/2472-charity-ethical-principles)
  • Exploring whether there are any areas of the Code that may need greater emphasis or clarity. One example is the Diversity Principle, where we have been told that trustees are keen to address the Principle but would welcome more guidance. For example, the Code recommends the use of a diversity audit, to consider lived experience and background, that could be used in conjunction with the more routinely used skills and experience audit. It may be that the Code could say more about this, or be clearer about expectations, or point to existing guidance such as NCVO’s KnowHow pages. (https://knowhow.ncvo.org.uk/governance/improving-your-governance-practice/trustee-diversity/questions-to-guide-a-board-discussion-on-diversity)
  • The Code’s reflection on expectations about board behaviour and culture has also been identified as something which might be developed as part of the Code’s refresh. More specifically, whether it should also reflect the recommendation in the ACEVO/Centre for Mental Health report (https://www.acevo.org.uk/news/charity-leaders-commit-creating-safer-systems-processes-and-cultures-tackle-bullying] that charities should nominate at least one trustee and one senior manager to lead on staff workplace well being.
  • Consideration of whether the Code should explicitly cover some specific trustee responsibilities, for example regarding charities’ efficacy of fundraising practice
  • Ensuring that the Code is capable of being used by charities that operate a range of existing and new governance models, such as unitary boards and more complex group structures  
  • Learning from governance developments in other sectors and jurisdictions. For example, the new and equivalent Code for private companies (the Wates Code) places a lot of emphasis on how organisations engage with their stakeholders and, in particular, it highlights the importance of meaningful engagement with staff.  
  • We would also like the Code to align with charities’ financial reporting requirements (the SORP requirements) and any changes, such as on how charity accounts might be better used to show their impact, that might be proposed by the SORP Committee when it begins its drafting on a new edition later on this year.

This list isn’t exhaustive. It is intended to start the conversation about how the Code should be refreshed to stay abreast of the environment in which charities are working.  We will launch formal consultation in November on proposed changes to update the Code. In the meantime, we welcome any initial thoughts on how the Code has worked to date and how it might be improved for the next three years. 

Rosie Chapman, Chair, Charity Governance Code Steering Group. 

A variation on this article first appeared in the July 2019 edition of Governance & Leadership.  

August 7th, 2019

Posted In: Uncategorized

Tags: ,

Leave a Reply

Your email address will not be published. Required fields are marked *