Now in its 12th year and third edition, the Charity Governance Code remains an important guide for the sector. It advises on how to run a professional, ethical and legal organisation that puts its values into practice. Consultant Alice Smith, from governance specialists Campbell Tickell, discusses the latest revisions to the Code and what they mean for sector CEOs.
Designed as a tool to support continuous improvement, the Charity Governance Code sets a high bar for charity trustees and CEOs. In July 2017, a revised Code was launched. Its key recommendations include more diversity on boards, a nine-year limit for trustees, and a stronger emphasis on the role of the chair.
Almost a year on, the Code has been positively received, with early adopters describing it as “straightforward and easy to understand”. The Code’s real success will be defined by how, and to what extent, charities apply its principles to improve their governance arrangements and, ultimately, the way in which they meet their charitable objectives.
Putting the Code into practice is not a way to avoid things going wrong, or indeed keep the tabloids at bay if they do. But it is a tool to help make sure an organisation’s governance arrangements are in good shape should they come up against challenges and scrutiny. In the long run, this will contribute towards strengthening public trust in charities. It’s also a useful tool for initiating potentially difficult conversations, for example around board size and tenure.
Challenges around applying the Code
The way the Code is applied will vary according to a charity’s size, model and activities, and of course its governance culture. There are different versions for larger and smaller charities, and possibly one in the pipeline for very small charities.
While many organisations are already doing lots of the things the Code recommends, some have found it tricky to provide the supporting evidence. Getting to grips with the Code’s requirements takes a bit of time and resource, so CEOs need to be prepared to invest. Some areas that are ‘work in progress’ for many charities include how the board can:
- Reflect on its own work, appraise individuals, and constructively challenge each other and the senior leadership
- Get to grips with its risk appetite without becoming over-cautious, and understand ways in which risks can combine
- Improve the diversity of trustees and leadership teams, so they represent a broad range of people and experience.
Clearly the work doesn’t stop with the decision to adopt the Code. Here are a few ideas for how charity CEOs can make sure their organisation keeps benefitting from the Code’s guidance:
- Regularly revisit the Code and don’t lose sight of your vision and mission – everything in good governance should be about making the biggest impact you can
- Take a critical look at your culture – the Code is as much about people and behaviour as it is about structure and process
- Make assessment against the Code a standard item in your board effectiveness reviews
- If your organisation signs up to the Code, tell your supporters and funders – include it on your website and in your annual report
- Talk to your peers – organise cross-sector workshops on risk, diversity and board culture to keep governance conversations flowing.