The updated Charity Governance Code: What’s new?

When the Governance Code steering group last published an update to the Code in July 2017, we committed to reviewing the content every three years to make sure it reflected changes in society, best practice and remained relevant to the sector. In line with this commitment, today, we, our steering group colleagues and our chair Rosie Chapman are pleased to publish an updated version of the Charity Governance Code (the Code).

Demand for change

This refresh of the Code follows a rigorous consultation and engagement exercise that involved user focus groups, and received over 800 responses to a sector wide consultation. We learned that:

• users valued the Code and found it to be a useful tool for governance improvement
• there was a need and demand to strengthen the existing diversity and integrity principles to reflect evolving best practice and to create a shift in focus
• although there was support for change, feedback suggested this should be iterative and take the form of a refresh, rather than another overall update of the Code and its structure.

At a time when many trustees and boards are understandably focused on sustainability and organisational resilience, we reflected on the value in publishing an updated practice in 2020. Yet when we examined feedback from the consultation it became clear that not only was there a demand for change, but that some of the proposed changes might support trustees to better lead their organisations through this difficult time. As such we concluded that holding back on a refresh of the Code could be detrimental.

Given the consultation findings, the steering group decided to retain the structure of the Code and focus on enhancing the diversity and integrity principles. Below, I detail the key changes to each.

This refresh of the Code would not have been possible without the support of the Code funders The Clothworkers’ Company and the Barrow Cadbury Trust to whom we are very grateful.

Principle 3: Integrity

The changes to the integrity principle broadens the focus. The 2017 version of the practice was primarily concerned with protecting the charity’s assets and reputation. In addition, this version places increased emphasis on values, culture and the right of everyone to be safe. This shift is intended to reflect developments in the sector and incorporate the NCVO Charity Ethical Principles. In addition to existing practice on conflict of interest, the Code now expects trustees to:

• assess and address power imbalances where they exist
• understand their safeguarding responsibilities
• establish appropriate procedures that are integrated with the charity’s risk management approach
• make sure that everyone in contact with the charity knows how to speak up and raise concerns.

Principle 6: Equality, diversity and inclusion

The consultation was clear that the diversity principle could go further in terms of supporting trustees to plan and work toward board diversity as well as creating inclusive cultures, both inside the board throughout the organisation. The updated Code is designed to help charities on this journey.

With the support of specialist consultants Pari Dhillon and Chaka Bachmann we consulted experts in this area and have redrafted the whole principle. This has resulted into a name change, to equality, diversity and inclusion (EDI). The principle now recommends four stages of practice for charities in their EDI journey:

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.

Using the Code

I’d encourage you to review the Code and consider how to apply this to your charity’s context. We also know how hard trustees work. I always say the Code is intended to be an enabler. It is best used as a practical tool. Working toward the Code should be viewed as a journey rather than a single event.

I often suggest identifying one or two areas of focus, working on these, and then revisiting the Code. Remember the Code sets out the best practice. On the first evaluation, few charities will be able to fully achieve the Code. This should not be viewed as a failure but instead as a commitment to improvement by starting with a clear understanding of your current practice.

Dan Francis is NCVO’s lead governance consultant. For more regular updates follow Dan on Twitter or LinkedIn.