Overall changes to the Charity Governance Code

Rosie Chapman: independent Chair, Charity Governance Code Steering Group

Today, we’re publishing an updated edition of the Charity Governance Code, a practical tool to help charities and their trustees develop high standards of governance.

It’s taken us a while to get here, partly because of Covid but also, more positively, because of the interest shown in our consultation, with over 800 replies.

When we asked about what needed to change in the Code this time round, the diversity and integrity principles were the areas that attracted the most attention. As a result, the new edition includes new recommended practice in the now named Equality, Diversity and Inclusion Principle, and updates to the Integrity Principle emphasising ethics and the right of everyone who has contact with the charity to be safe.

Here’s some more detail:

Equality, Diversity and Inclusion

In redrafting this principle, we are very aware of the wider changes in society, such as the Black Lives Matter movement and support the now widely held view that the sector has reached a ‘tipping point’ in terms of agreement that more action is required to address diversity and inclusion. The updated principle is our response to that call.

The Equality, Diversity and Inclusion (EDI) Principle reflects the importance of all three elements. All trustees have the same responsibility for the charity, so they must have equality of opportunity to contribute to decision making. Board diversity, in the widest sense, is important because it creates more balanced decision making and greater connection to the communities and people the charity serves. Equality and diversity are only effective and sustainable if the board ensures that all trustees are welcomed, valued and able to contribute

Addressing EDI helps boards to make better decisions. This requires ongoing commitment, but it means that a charity is more likely to remain stay relevant and deliver its public benefit.

The Code sets new expectations for what charities should be doing to embed EDI in their organisation, including in their governance and boards.

In particular, it sets out four stages of recommended practice to guide charities in their EDI journey:

• The first stage asks boards to think about why EDI is important for the charity, for the delivery of its aims, and to assess the current level of understanding amongst the board and throughout the organisation.
• The second stage proposes that boards set out tailored plans and targets based upon the charity’s starting point.
• Thirdly, boards are recommended to monitor and measure how well the charity is doing in meeting those plans and targets, including any targets which specifically relate to the board
• The fourth stage recommends that boards are transparent and publish the charity’s progress in meeting these targets, including any challenges, opportunities and learning.

You can view a comparison between the 2017 Diversity principle and the 2020 Equality, Diversity and Inclusion principle here.

Integrity

We have strengthened the Integrity Principle to reflect what charities have learnt in the last few years about integrity and safeguarding. The updated Principe continues to highlight the importance of values. The principle also emphasises the importance of charities reflecting their ethics and culture in everything they do.

It additionally reflects the belief that everyone who comes into contact with a charity should be treated with dignity and respect and feel that they are in a safe and supportive environment. In particular, regarding ensuring the right to be safe, the Code recommends that trustees:

• understand their safeguarding responsibilities
• establish appropriate procedures which are integrated with the charity’s approach risk management, and
• ensure that everyone in contact with a charity knows how to speak up and raise concerns.

You can view a comparison between the 2017 Integrity principle and the 2020 revised principle here.

Adopting the Code — a journey

The updated Code reflects changes in society and the world in which charities are working. The changes are designed to help charities adopt best practice for today’s environment and to secure better outcomes.

We know that charities are at varying stages in their full adoption of the Code and, in particular, at different points in their EDI journey. The updated Code is designed to help charities and charity boards along this path.

Visit the code website to see the 2020 changes.