Charity Governance Code urges reviews every three years

The new Charity Governance Code has been released, outlining the standards that all charities in England and Wales should aspire to and increase effective governance.

The Code contains three major recommendations alongside other guidance; these are: reviews for larger charities every three years, greater openness and limits on how long trustees may serve. Created by a group of leading charity membership bodies the Code seeks to strengthen governance and accountability in the voluntary and community sector.

The guidelines come in two versions which share common principles and outcomes: one set of recommended practice applies to smaller charities and another to larger organisations, where accounts are audited.

Key recommendations include:

• More oversight when dealing with subsidiary companies; registers of interests and third parties such as fundraising agencies or commercial ventures.
• An expectation that the board will review its own performance and that of individual trustees, including the chair, every year, with an external evaluation for larger organisations every three years.
• No trustee should serve more than nine years without good reason.
• Boards thinking carefully about diversity, how they recruit a range of skills and experience, and how they make trusteeship a more attractive proposition.
• Boards should operate with the presumption of openness.
• A stronger emphasis on the role of the chair and vice chair in supporting and achieving good governance.

A new website has also just launched to host the code online.

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.”

Updating the previously released Code of Good Governance, the Code has been devised by a cross-sector steering group with independent chair Rosie Chapman and comprising the Association of Chairs; the Association of Chief Executives of Voluntary Organisations; ICSA: The Governance Institute; the National Council for Voluntary Organisations; the Small Charities Coalition; and the Wales Council for Voluntary Action.

The Charity Commission has marked its endorsement for the new code by withdrawing its publication, Hallmarks of an Effective Charity, in favour of encouraging charities to use the code.

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