On 10 September, we hosted a discussion on the refreshed Charity Governance Code, bringing together Radojka Miljevic, Independent Chair of the Code Steering Group, Mo Wiltshire, Senior Governance Consultant at NCVO, and Mark Abbott, Partner at Bates Wells. The session was chaired by Bates Wells Partner Simon Steeden.
As Radojka Miljevic explained, this is the fifth iteration of the Code and has been developed with the aim of creating a single Code for all charities, with a focus on trustee behaviours, and using language and structures that are more accessible to trustees. All eight principles are now numbered, and each principle includes behaviours. She highlighted that the ‘top level’ of the Code is applicable to all charities – ‘you know it’s working when’ and the bullet points that follow – because it speaks to evergreen principles of good governance that should be true for charities, irrespective of their size. Trustees need to bring their own discretion to how they apply other areas of the Code, such as suggested practices, and how they evidence their application of good governance principles
The panel discussed how the revised Code is designed to encourage boards to engage in regular reflective practice.
Mo Wiltshire highlighted that the longstanding tension between governance and representation remains a challenge for many charities. Good governance, she noted, is diverse governance, but it must also be proportionate. Charities should not spend all their time on governance at the expense of delivering their purpose. The Code’s new behavioural guidance is designed to help trustees determine what good governance looks like in their own context and to support conversations about strategy, values and long-term planning.
Mark Abbott reflected on the Code’s place within the wider legal and governance landscape, emphasising that – while trustees are not required to comply with the Code and that there is an important distinction between legal requirements, regulatory expectations and good governance practice – the Code can nevertheless provide a valuable framework to help trustees fulfil their duties. Mark also reflected on the challenge of developing a single Code capable of serving charities of widely differing sizes and structures, while complementing rather than duplicating existing law, regulation and guidance.
Mark particularly welcomed the Code’s recognition that trustees should consider how their charity’s purpose and values relate to wider moral, social and environmental responsibilities, describing this as a positive encouragement as part of a movement among charity trustees to consider their charity’s wider place in society. The discussion also highlighted the increased emphasis on trustee behaviours within the revised Code, including the importance not only of active participation but also of listening, both to fellow board members and to voices beyond the boardroom.
He described the Code as a tool for “fixing the roof while the sun is shining”, arguing that investment in governance should not be seen as a compliance burden but as a means of helping charities avoid more significant challenges in future. As an example, he noted the Code’s suggestion that charities consider adopting a trustee dispute resolution policy. While this might initially appear to be additional administration, he observed that charities are increasingly encountering trustee disputes and that clear procedures can save significant time, cost and disruption when issues arise. Echoing an earlier remark from Mo, Mark also welcomed the retention of certain governance norms, including expectations around trustee tenure.
Questions from the audience began with insights on the importance of a charity seeking to protect its reputation, with one guest sharing the observation that reputation is a charity’s most invaluable asset and considered the benefit of the Code as a tool to support reputational safeguarding. The discussion also considered hopes and expected challenges around using the Code to influence greater diversity within charitable governance, and the challenges of engaging effectively with the well-established “apply and explain” approach.
One delegate noted the helpfulness of the Code in providing a range of principles that can be adopted in stages and tailored to the specific circumstances of each charity. Radojka expressed particular pleasure at this feedback, noting that this was one of the outcomes the Steering Group had hoped to achieve through the fifth iteration of the Code. In response to the anticipated challenges discussed, the panel reiterated that no part of the Code is compulsory and that charities should not approach it as a mandatory checklist. Rather, the “apply or explain” approach is intended to provide flexibility while encouraging boards to reflect on and articulate how they pursue good governance in practice. Looking ahead, the panel also reflected on the pace of change affecting the sector, including the implications of artificial intelligence, evolving expectations of trustees and the possibility that future versions of the Code may need to accommodate greater sector-specific variation.
The material in this article is provided for guidance and general information only and is not intended to constitute legal or other professional advice upon which you should rely. In particular, the information should not be used as a substitute for a full and proper consultation with a suitably qualified professional. Please do contact the Bates Wells team if you require further advice or information about management training which we offer.