New Charity Governance Code recommends more oversight of third parties & regular reviews
Melanie May | 14 July 2017 | News
More oversight when dealing with third party suppliers or services, yearly internal reviews, three-yearly external reviews for larger charities, and a limit on how long trustees may serve are among the recommendations made in the new Charity Governance Code, published this week (13th July).
The Charity Governance Code is an updated version of the previous Code of Good Governance and also has a new website. It has been developed by a cross-sector steering group headed by independent chair Rosie Chapman and comprising the Association of Chairs, ACEVO, ICSA, The Governance Institute, NCVO, the Small Charities Coalition, and the Wales Council for Voluntary Action. The Barrow Cadbury Trust and the Clothworkers Foundation funded their work in devising the Code.
The Charity Commission has endorsed the new Code by withdrawing its publication, Hallmarks of an Effective Charity, as well as in a blog on its site by Sarah Atkinson, the commission’s director of policy and communications.
The guidelines come in two versions with the same common principles and outcomes but one set of recommended practice for smaller charities and another for larger organisations where accounts are audited.
Key recommendations include:
- More oversight when dealing with subsidiary companies; registers of interests and third parties such as fundraising agencies or commercial ventures
- Where a charity uses third party suppliers or services – for example for fundraising, or data management, boards must ensure the work is in the charity’s interests and must regularly review agreements
- An expectation that the board will review its own performance and that of individual trustees, including the chair, every year, with an external evaluation for larger organisations every three years
- Boards should regularly review the sustainability of income sources and business models and their impact on achieving charitable purposes
- Boards should regularly check charities’ key policies and procedures to ensure make sure that they still support, and are adequate for, the delivery of their aims, including key areas such as fundraising and data protection
- No trustee should serve more than nine years without good reason.
- Stronger emphasis on the role of the chair and vice chair in supporting and achieving good governance
Sir Stuart Etherington, chief executive of NCVO, said:
‘This new code represents a significant contribution to strengthening governance throughout the sector. I’m particularly pleased that is has been written by the sector, for the sector.
‘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.”Advertisement
John Barrett, chief executive of the Small Charities Coalition, also commented:
“We welcome this update of the Charities Governance Code – and the work that has gone into it to make it simpler, more proportional and supportive for small charities.
“The code sets the aspirations for good governance, and in applying it, small charities should take a proportional approach and remember application of the code is about continuous improvement, not perfection.”
About Melanie May
Melanie May is a journalist and copywriter specialising in writing both for and about the charity and marketing services sectors since 2001. She can be reached via thepurplepim.com.