The Charity Governance Code has come a long way since its introduction in 2005. The latest version of the Code, published in 2017, has been ground-breaking in promoting the importance of good governance and in helping charities to embed this best practice.
RSM research exploring the Code’s uptake, together with feedback from workshops we’ve held, reinforce our sense that the Code continues to be useful and contain leading practice.
However, even since 2017 our understanding of what constitutes good governance has evolved. Many charities are implementing innovate and exciting practice which goes beyond the Code’s recommended practice. It is also true that the public, charity funders, and those interested in charities have become more demanding in their expectations of how organisations are run. This is understandable given some of the challenges the sector has faced.
The Code does not exist in a vacuum. Like charities and the world around them, it needs to evolve to ensure it continues to reflect good practice.
We know there is always room for improvement, but we are also conscious of the need to strike a balance between updating the Code and disruption to those using it.
We are proposing a ‘light refresh’ of the Code in 2020, where we set a reasonably high bar for changes and focus only on those amends that are urgent to improve practice. Our plan would then be to implement more far-ranging changes in 2023. Do let us know in the consultation if you think this is the right approach.
In this refresh we propose focusing on the diversity and integrity principles:
- Diversity principle: the consultation explores whether the Code should go further on diversity and be more stretching on inclusion
- Integrity principle: How can the Code incorporate the Charity Ethical Principles and respond to the challenges of safeguarding?
A road map to the future?
Our plan is to develop a road map for 2023. This would contain in depth articles, case studies and even recommended practice on areas identified through this consultation which were either not urgent enough to warrant inclusion in the refresh or require more detailed exploration. When we approach 2023, we can look to incorporate these fully.
Although other suggestions are of course welcome our current thinking is that some of the following themes will be considered in the road map:
- More specific guidance and recommended practice on managing conflicts of interests, for example charities operating in group structures and/or with unitary boards
- A broader understanding of leadership and the importance of the chair and the CEO in providing it, in different environments
- Being more explicit about the behavioural dynamics of good governance
- Reviewing the decision-making, risk and control principle, in particular the recommended practice relating to oversight and control and that relating to internal controls and audits
- Introducing the concept of the senior independent trustee role to act as the interface between the board and key stakeholders, and the person to approach in situations where the chair’s involvement would be inappropriate
- Strengthening openness and accountability principle, for example by including recommended practice that emphasises treating all sides as equals in meaningful stakeholder engagement.
We look forward to working with you to develop the Code and make it the best it can be for the sector. Please visit out consultation page to share your thoughts.