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22nd September 2017

New code encourages charity trustees to aim high

An updated governance code for charity trustees in England and Wales was published last month, called the Charity Governance Code (www.charitygovernancecode.org). 

The Code is intended as a tool for trustees, helping them achieve higher standards of governance, and is updated to reflect current considerations for charities.

There are two versions of the code – one for larger charities (with income of over £1m per year) and one for smaller charities.  The differences mainly lie in the “recommended practices”, which are tailored according to the size and resources of the charity.

The code is built around seven principles encouraging (1) clear organisational purpose, (2) strategic leadership, (3) integrity, (4) informed decision making and risk management, (5) board effectiveness, (6) diversity and (7) openness and accountability.

Notable recommendations in the updated version include having at least five but no more than twelve trustees, discouraging trustees serving for more than nine years, reviewing board performance regularly (including that of the chair) and recruiting trustees from diverse backgrounds.  The Code also emphasises the ongoing commitment necessary for the role – there is no place for passengers and the risks that creates.

Adherence is not a legal or regulatory requirement, but rather draws from guidance issued by the Charity Commission and other bodies to create a “deliberately aspirational” set of principles and recommended practices.  It assumes that trustees have already read the Commission’s core guidance document The Essential Trustee, which details the legal duties of the role.

The code, produced following a public consultation by a range of sector bodies (including NCVO and Acevo), replaces the previous version Good Governance: a Code for the Voluntary and Community Sector, which was last updated in 2010.  The Commission has withdrawn its long-standing guidance Hallmarks of an Effective Charity, giving extra prominence to the new code, which should now be a key resource for charity boards.

For more information or help with any charity legal matter please contact Martyn Robinson, in our charities team on 01223 461155 or click here to email Martyn.

A version of this article was first published in the NFU British Farmer & Grower, Legally Speaking column, September 2017