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Rosie Chapman: independent Chair, Charity Governance Code Steering Group

While the 2017 edition of the Charity Governance Code Code’s had been well-received, we knew that, approaching three years on, certain aspects needed refreshing. So, late last year, when Covid-19 was unheard of, the steering group started consulting on areas to update.

The consultation ended in February, prior to the emergence of Covid-19.

Despite this, we see merit in analysing and publishing the consultation responses and updating the Code accordingly.

If anything, we believe that these tumultuous times mean that updates to the Code post-consultation will be even more relevant.

Over 800 people fed into the consultation via two surveys and detailed feedback. There were 143 substantive responses to the online consultation questions (with 273 in total) or by email (12) with a separate Small Charities Coalition (SCC) survey of its members attracting over 510 responses. …

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Mair Rigby, Governance & Safeguarding Manager, WCVA

The Charity Governance Code states that ‘Good governance in charities is fundamental to their success. It enables and supports a charity’s compliance with the law and relevant regulations. It also promotes a culture where everything works towards fulfilling the charity’s vision.’

So, what does ‘governance’ mean and where does good charity governance start and end?

Here are some quotes from experts on charity governance to get you thinking:

‘the systems and processes concerned with ensuring the overall direction, effectiveness, supervision and accountability of an organisation’. Chris Cornforth, Emeritus Professor of Organisational Governance and Management at the Open University

‘the process by which a governing body ensures that an organisation is effectively and properly run […] governance is not necessarily about doing; it is about ensuring things are done”.

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Rita Chadha CEO Small Charities Coalition

Good Governance requires more than an ability to follow the rules, it requires the will and resources to invest in your organisation. For many small charities that is a luxury they can ill afford. Instead many ignore the governing document seeing it as cumbersome backdrop to their day to day delivery of services to beneficiaries.

Interestingly at least 1 in 4 queries to the Small Charities Coalition free helpdesk is from trustees and founders concerned about how they should interpret and implement good governance. Yet such questions are not framed as being about Governance. …

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Neal Green, Strategy and Insight Manager, Charity Commission

Do you know anyone who can reliably predict the future? Many people have claimed they can, but with hindsight, most of them were proved to be wrong at some point.

It’s a strange thing. For some reason human beings expect to be able to predict future events. There are whole industries built on this. From consultants, insurance companies and investment managers to betting shops and astrologers. When something big and unexpected happens, hindsight kicks in and we think we should have seen it coming.

My current job includes some horizon scanning. This was new for me. I’ve realised that it isn’t about trying to predict what might happen in the future. It’s about seeing what is already happening and identifying what could become a problem. …

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Neal Green, Strategy and Insight Manager, Charity Commission

The first of the Charity Commission’s new objectives is to hold charities to account. ‘Holding to account’ means more than just ensuring that charities comply with the law. It’s also about ensuring they appreciate and act on what the public expects of them.

Why? Because the Commission’s research shows that there is a direct link between accountability and trust. If you want people to trust you, you must show them that you are worthy of that trust. This is why the Commission has started talking about the importance of getting attitudes and behaviour right as well as legal compliance.

In 2018, the things people identified as being most important when deciding whether to trust a charity were being transparent about where their money goes (and spending it responsibly), being true to their values, and demonstrating the positive difference they make. Note that there is a strong overlap with three basic duties of trustees: ensure your charity is carrying out its purposes for the public benefit; manage your charity’s resources responsibly; ensure your charity is accountable. But it’s not just about doing these things. It’s about enabling your stakeholders to see that you have done them. …

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Kristiana Wrixon Head of Policy ACEVO

The Charity Governance Code is designed to be a practical tool to help charities and trustees develop high standards of governance. The Code was launched in 2017 and is structured around seven core principles:

1. Organisational purpose

2. Leadership

3. Integrity

4. Decision making, risk and control

5. Board effectiveness

6. Diversity

7. Openness and accountability

Good governance is essential to ensure that charities are run to the highest possible standards, thus allowing its staff and volunteers to make the biggest possible difference to the communities or causes they care about. …

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Craig Beeston, Policy Officer, Not for Profit, ICSA The Governance Institute

Testing the water

Prior to the launch of the Charity Governance Code consultation, the Steering Group hosted a series of roundtables to identify areas on which to focus as part of the 2020 refresh. In doing so, we canvassed opinion from a range of stakeholders in the sector: individual charities, sector bodies, funders and professional services providers.

We wanted to test the water about how the Code has been received and implemented, what has worked well and which areas require attention. …

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Rosalind Oakley, Chief Executive, Association of Chairs

At first glance, it may seem slightly odd that I, the CEO of Association of Chairs, should ask whether we have been paying enough attention to the Chief Executive’s role in governance. But we know from experience that Chief Executives, like Chairs, have a crucial role to play for good or ill in charity governance. They, with their staff, can be enablers of good governance. They provide crucial support and guidance. They often help the board understand their legal and governance responsibilities, and offer development opportunities if needed. …

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Kristiana Wrixon Head of Policy ACEVO

The Charity Governance Code is an excellent guide for best practice governance. ACEVO’s own board has carried out a self-assessment of its policies, processes and practice using the Code as a framework. But, like any good tool, it is important to regularly review whether new information and practice is sufficiently incorporated, or if changes should be made. The Code is currently open for consultation one of the questions posed is:

“Should the Integrity principle say more about charities’ ethical principles and the right to feel safe?”

This offers an important opportunity for people that work with or alongside charities to consider whether the section covering ‘integrity’ says enough about ethics and the board’s responsibility to nurture a safe culture. This question is especially important in light of reports over the last two years about sexual abuse, exploitation and bullying taking place in charities. …

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Dan Francis — Lead Consultant NCVO

How to benchmark governance?

Through our work evaluating boards and their effectiveness we are often asked to benchmark organisations. The challenge with benchmarking is the diversity of our sector. There are over 160,000 general charities in the UK.

How does any charity identify which organisation to compare themselves with? You could opt for organisations which…

  • Work on similar issues?
  • Have similar beneficiaries?
  • Operate in similar geographic locations?
  • Have a similar size income?
  • Have a similar number of staff?
  • Have a similar history?
  • Have a similar funding base?
  • Or a mix of all of the above?

The problem with these options is that nothing will be a perfect fit. Two organisation’s governance is never the same. Simply modelling ones governance on another charity can risk trying to fit a square peg in a round hole or may involve replicating poor practice. …


Charity Governance Code

The Code is a practical tool to help charities develop high standards of governance. Here we explore topics related to the code and its continued development.

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