A new Charity Governance Code published on 14 July 2017, has stressed the standards expected of charities and trustees and recommended that larger charities carry out external reviews every three years.
The code has been put together by a steering group of charity umbrella bodies, including the National Council for Voluntary Organisations, the Association of Chief Executives of Voluntary Organisations and the Small Charities Coalition, with an independent chair, Rosie Chapman. The Charity Commission has withdrawn its ‘Hallmarks of an Effective Charity’ guidance document and will now instead direct people to the new code.
Described by Chapman as, “an essential tool for charities to use [that] will greatly assist them to develop and grow in their effectiveness,” the code includes other key recommendations to increase diversity on trustee boards and limit trustee terms of office to nine years, unless there is a good reason otherwise.
Whilst it is meant to provide guidance rather than a regulatory framework, Chapman anticipates that funders will look to charities to show adherence to the code. Hence, the code also urges charities to include a line in their annual accounts explaining if it has been followed, as show of good practice to grant makers.
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.”
His counterpart at ACEVO, Vicky Browning, said, “We know effective governance is crucial to the running of any charity. The new governance code is a key tool in ensuring this is achieved. I would recommend that all charity leaders – whether they’re chairs or CEOs – read it and take on board its recommendations.”
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