The Charity Governance Code is a practical tool to help charities and their trustees develop high standards of governance.
Posted: 08/03/2022
Category: Quality Assurance
Who is the Code for?
The Charity Governance Code is intended for use by charities registered in England and Wales. Much of it will also apply to other not-for-profit organisations that deliver a public or community benefit and those with a social purpose. Organisations or subsectors may find it helpful to adapt the Code to reflect their context.
The Codes principles, rationale and outcomes are universal and apply equally to all charities, whatever their size or activities. There are different versions of the recommended practice to reflect and address some differences between charities- which version you choose to use will depend on a range of factors. In general, we recommend that charities with a typical income of over £1m a year, and whose accounts are externally audited, use the larger version and charities below this threshold use the smaller version.
How it works
This Code is designed as a tool to support continuous improvement. Charity boards that are using this Code effectively will regularly revisit and reflect on the Codes principles.
Compliance with the law is an integral part of good governance. This Code does not attempt to set out all the legal requirements that apply to charities and charity trustees, but it is based on a foundation of trustees basic legal and regulatory responsibilities. The seven Code principles build on the assumption that charities are already meeting this foundation.
The Code sets out principles and recommended practice. Each principle in the Code has a brief description, a rationale (the reasons why it is important), key outcomes (what you would expect to see if the principle were adopted) and recommended practice (what a charity might do to implement the principle).
The principles
There are seven principles which make up this Code. These seven principles build on the assumption that a charity is meeting its legal and regulatory responsibilities as a foundation.
1. Organisational purpose
The board is clear about the charitys aims and ensures that these are being delivered effectively and sustainably.
2. Leadership
Every charity is led by an effective board that provides strategic leadership in line with the charitys aims and values.
3. Integrity
The board acts with integrity, adopting values and creating a culture which help achieve the organisations charitable purposes. The board is aware of the importance of the publics confidence and trust in charities, and trustees undertake their duties accordingly.
4. Decision-making, risk and control
The board makes sure that its decision-making processes are informed, rigorous and timely and that effective delegation, control and risk assessment and management systems are set up and monitored.
5. Board effectiveness
The board works as an effective team, using the appropriate balance of skills, experience, backgrounds and knowledge to make informed decisions.
6. Diversity
The boards approach to diversity supports its effectiveness, leadership and decision-making.
7. Openness and accountability
The board leads the organisation in being transparent and accountable. The charity is open in its work, unless there is good reason for it not to be.
