The Updated Charity Governance Code: What’s New?

The Charity Governance Code (the Code), re-launched in December 2020 has undergone a ‘refresh’ after a consultation involving over 800 charities and individuals.

The ‘refreshed’ code sets out recommended practices and aims to be a tool to support continuous improvement in charity governance.

The Code has retained its structure but amends the following principles:

Integrity (Principle 3)

The changes to the integrity principle broaden the focus. The previous Code focused on protecting the charity’s assets and reputation, values, culture and the right of everyone to be safe. The shift is intended to reflect developments in the sector and incorporate the NCVO Charity Ethical Principle. The Code now expects the trustees to:

  1. Assess and address power imbalances where they exist.
  2. Understand their safeguarding responsibilities.
  3. Establish appropriate procedures that are integrated with the charity’s risk management approach.
  4. Make sure that everyone in contact with the charity knows how to speak up and raise concerns.

Equality, Diversity and Inclusion Principle (Principle 6)

It is universally acknowledged in the sector that trustees should plan and work towards greater board diversity as well as creating inclusive cultures within the organisation. The Code is intended to support this. The EDI principle should become embedded in the charity.

To this end, the whole principle has been redrafted. The principle now recommends 4 stages of practice for charities for EDI:

  1. Define how equality, diversity and inclusion are important for the charity and assess the current level of understanding.
  2. Set out plans and targets tailored for the charity- based on its context and starting point.
  3. Monitor and measure how well the charity is doing.
  4. Be transparent and publish the charity’s progress.

Boards should consider implementing a diversity policy or, if there is already one in place, consider updating it in light of the refreshed Code. Other actions may include reviewing role descriptions, incorporating questions about the culture of the charity in exit interviews and conducting open discussions about EDI and participation.

The Code sets out the best practice, but few charities will be able to fully achieve these practices on first evaluation. We recommend that you identify one or two areas of focus, working on these and then revisiting the Code as part of an ongoing journey, especially as we emerge from the pandemic during 2021.

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