Contact us 01733 568321

Seven Principles of Charity Governance Code

In July 2017 the Charity Governance Code Steering Group issued the ‘Charity Governance Code’, intended for use by charities and other not-for-profit organisations that deliver a public or community benefit. While it is not a legal or regularity requirement, it does set out principles and recommended practice for good governance and is deliberately aspirational, with some elements being a stretch for many charities to achieve.  It will therefore form a tool for continuous improvement towards the highest standards.

Good governance should be about more than ticking all the right boxes and at Rawlinsons, we believe the Charity Governance Code is a really useful tool in many respects. In our considerable experience working with charities of all sizes, it is the charities that embed these codes in their ways of working that get the most benefit. What we see is that when trustees take this code on board, they improve their ability to deliver more effective results.

So Rawlinsons recommends that Boards of trustees work through the detail within the code – summarised below – over a period of time.

One way to do this might be to focus on one principle at each trustees meeting – and maybe when you have completed principle 7 you go back to principle 1 – on the basis that these issues should be constantly reviewed, and you may find that each time you are able to go deeper into the subject.   As the code itself suggests, we hope, that in doing so, your charity will make an ever-bigger difference.

As our more detailed factsheet explains in detail, two codes have been issued, one for smaller charities and one for larger charities (‘Large’ being loosely referred to as a charity exceeding the audit threshold with income over £1million). The main difference for larger charities is the emphasis on the Board supporting the senior team, who in turn support the rest of the team.

If you would like more information or a copy of our more detailed factsheet covering the Charities Governance Code, click here or call the Charities team at Rawlinsons on 01733 568321.

Foundations

The Code’s starting point is that all trustees:

  • are committed to the charity’s cause
  • recognise the need to meet the ongoing public benefit
  • understand their roles and legal responsibilities (and have read CC3: The Essential Trustee and the charity’s governing document)
  • are committed to good governance and want to contribute to the charity’s continued improvement

Principle 1: Organisation purpose

The board is clear about the charity’s aims and ensures that these are being delivered effectively and sustainably.

Recommended practice covers:

  • Determining organisational purpose
  • Achieving the purpose
  • Analyse the external environment and plan for sustainability

Principle 2: Leadership

Every charity is headed by an effective board that provides strategic leadership in line with the charity’s aims and values.

Recommended practice covers:

  • Leading the charity
  • Leading by example
  • Commitment

Principle 3: Integrity

The board acts with integrity, adopting values and creating a culture which helps achieves the charitable purposes and is aware of the need for public confidence and trust in charities.

Recommended practice covers:

  • Maintaining the charity’s reputation
  • Identifying, dealing with and recording conflicts of interest / loyalty

Principle 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.

Recommended practice covers:

  • Delegation and control
  • Managing and monitoring organisational performance
  • Actively managing risks
  • Effective process for appointing and reviewing external examiners or auditors

Principle 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.

Recommended practice covers:

  • Communicating and consulting effectively with stakeholders
  • Developing a culture of openness within the charity
  • Member engagement where trustees are appointed by members

If you would like more information or a copy of our more detailed factsheet covering the Charities Governance Code, click here or call the Charities team at Rawlinsons on 01733 568321.