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The 2020 Charity Governance Code




A new Charity Governance Code was published in the second week of December. Coming 3 years after its first publication in 2017 this was a refresh of the Code rather than a rewrite. It includes significant updates to Principle 3: Integrity, and Principle 6: Equality, Diversity and Inclusion.


The Code, which is a voluntary code and not legally binding, is based on the principle of ‘Apply or Explain’ and sets out ‘charity best practice’ across 7 core principles and governance goals. The refresh applies to both large and small charities with differing recommended practice to reflect charity size.


The Code is recognised by the Charity Commission as the standard for effective charity governance. Boards of larger charities are expected to review their own performance annually with an external evaluation every three years.


There are seven core principles which make up the Code:



The Significant Updates to the 2020 Code


Integrity

The Integrity principle has been updated to refocus on the importance of a charity’s values, ethics and culture. It reflects the recent focus on safeguarding. Trustees shall understand their safeguarding responsibilities and meet the legal minimum to promote a culture where everyone feels safe and respected.


The recommended practice for boards is to:

  • understand their safeguarding responsibilities

  • establish and review appropriate safeguarding policies and procedures and

  • through information and training ensure that anyone working with the charity understands the safeguarding policies and know how to speak up and feel comfortable raising concerns.


Equality, Diversity & Inclusion


Practice and thinking on diversity has moved on significantly since 2017. The old Diversity Principle has been replaced by a new Equality, Diversity, and Inclusion (EDI) Principle. This requires that the board has a clear, agreed, and effective approach to supporting equality, diversity, and inclusion throughout the organisation and in its own practice.


The rationale is that by addressing equality, diversity and inclusion boards make better and more balanced decisions, set a positive example, and in turn means the charity is more likely to stay relevant to those it serves and in delivering its public benefit.


The recommended practice for boards:

  1. Regularly assessing the understanding of systems, culture and practice

  2. Setting context-specific and realistic plans and targets

  3. Taking appropriate action and monitoring ED&I performance

  4. Regularly publishing its performance information and plans to tackle gaps and inequalities


The revised Code is available at www.charitygovernancecode.org. If your board is looking to carry out a review of its governance performance and compliance with the Code we can help. We provide governance audits and health checks for charities and will be able to help your board ensure best practice governance and effectiveness.



About Us

Governex is an ESG advisory business that helps businesses with corporate governance as well as answering the question of how they make positive contribution to the environment and social issues.

We help organisations implement the right shift in focus from a purely financial commitment to include environmental, social and governance commitments. All in the context of meeting business purpose, strategy, integrity and diversity.



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