The updated version of the Charity Governance Code has been published, setting out higher standards and urging larger charities to carry out external reviews every three years. Other key recommendations include increasing diversity on boards, a limit of nine years for trustee terms unless a good reason is given, more oversight of subsidiaries and a stronger emphasis on the role of the chair.
The code is overseen by a steering group of charity umbrella bodies comprised of the Association of Chairs; Acevo; ICSA: The Governance Institute; NCVO; the Small Charities Coalition; and the Wales Council for Voluntary Action, and with an independent chair, Rosie Chapman.
Consultation on changes to the code, which was previously called the Code of Good Governance, began last year and received over 200 responses. Work on the code was funded by the Barrow Cabury Trust and the Clothworkers Foundation.
The Charity Commission has withdrawn its Hallmarks of an Effective Charity guidance in favour of directing people to the new code.
Chapman said: “The code for the first time sets out clear aspirations for a charity board to meet. This code is a great stepping off point to help charities navigate the changes. It will be an essential tool for charities to use and will greatly assist them to develop and grow in their effectiveness.”
The code urges charities to include a line in their annual accounts explaining if they have followed the code. This will be a useful tool grantmakers.
Sir Stuart Etherington, chief executive of NCVO, said: “There is a clear consensus within the sector that we must focus more on governance. With this in mind, I envisage that we will soon see a commitment to following the Charity Governance Code become a requirement from many funders. Taking action now is a way of getting ahead of the game.”
Charities are urged to use the new code. Vicky Browning, chief executive of Acevo, said: “We know effective governance is crucial to the running of any charity. The new governance code is a key tool in ensuring this is achieved. I would recommend that all charity leaders – whether they’re chairs or CEOs – read it and take on board its recommendations.”
Source: Civil Society, 13 July 2017