Update to the Charity Governance Code
The holiday season is almost upon us.
But before we all wind-down for what must surely be the most collectively deserved break of any year in recent memory, let’s talk governance. Let’s talk, specifically, the Charity Governance Code.
For those of you based in Scotland, this is not the code developed by Scotland’s Third Sector Governance Forum, but by our English counterparts – the English code is more extensive and for any fellow lovers of all things good governance, it is well worth a read.
On 8 December 2020 the Steering Group responsible for the Charity Governance Code published a new, updated version of the Code. The changes are part of a review of the Code that takes place every three years and are a result of an extensive consultation process. The Steering Group received over 800 responses from across the sector, with key themes emerging regarding diversity and integrity.
The Charity Governance Code is a set of seven principles of good governance for charities and each of the principles contains guidance on best practice. While the Code is not legally binding it is a great resource for charity trustees and its suggested practices have been adopted throughout the sector. With this most recent update there have been two key changes, the previous Diversity Principle has been renamed the Equality, Diversity and Inclusion Principle and there have also been changes to the Integrity Principle. These changes address the responses received during the consultation and reflect a cultural shift and the changing landscape in which charities operate.
Equality, Diversity and Inclusion
Not only has this principle been renamed, it has also undergone an overhaul. Responses to the consultation requested more guidance in this area, showing greater awareness of the benefit and need for equality, diversity and inclusion to achieve good governance.
The new guidance frames the best practice in this area as a journey for charities that they must progress through:
- Firstly, charity trustees need to assess why equality, diversity and inclusion are important for their charity and reflect on their own understanding of this principle and how their practices might affect it.
- The board should then set out tangible plans and targets for how it will approach equality, diversity and inclusion, and these will be tailored to the circumstances of the charity.
- The charity should then action its plans and ensure that monitoring mechanisms are in place. It should assess the monitoring data regularly and adjust its plans and targets accordingly.
- To achieve transparency the board should publish information on its progress towards equality, diversity and inclusion targets and how it intends to approach them moving forward.
This guidance puts equality, diversity and inclusion at the heart of good governance and is intended to allow boards to maximise their charity’s public benefit and make informed and robust decisions.
There are two main changes that have been made to the Integrity Principle. Firstly, the existing recommended practices on upholding the charity’s values has been refreshed. These have been updated to include provisions encouraging boards to consider whether their actions reflect and uphold their charity’s values and to make decisions bearing in mind ethical principles. As part of this refresher the Code now makes reference to NCVO’s Charity Ethical Principles, demonstrating an increasing recognition of the importance of ethics and values across the sector.
New best practices have also been added regarding ensuring the right to be safe. These focus on protecting everyone that comes into contact with a charity and making sure they are treated with dignity and respect to create a welcoming and supportive environment. Trustees should understand their responsibilities to ensure these protections are in place and keep them under review. These procedures should be integrated into the charity’s risk management procedures and everyone involved with the charity should be aware of them, and particularly how concerns should be raised internally.
The revised Charity Governance Code is available here.
Happy reading and festive greetings to all of our Third Sector contacts – here is to a better 2021. We are here to support you and please don’t hesitate to get in touch with any questions.
17th December 2020
Charities to continue to hold virtual members meetings until 30 March 2021.
26th October 2020
UK Supreme Court judgment concerning charities restricting their public benefit to one group.
30th September 2020
The Regulations extend the period for companies, SCIOs and other corporate bodies to hold their AGM.