NPC’s mission is to support charities and funders to achieve the greatest possible impact for the causes and beneficiaries they serve. Governance is at the heart of how charities are run, and at their best, boards can enable charities to be bold and achieve ever greater impact.
We welcome this consultation on the Charity Governance Code. There are a number of areas detailed below where we think the Code could be even stronger and enable boards to be at the forefront of driving greater impact for the causes and beneficiaries their organisations exist to serve.
NPC’s response sets out a number of areas where the Charity Governance Code could be strengthened, including:
- Impact: As NPC recommended in the 2017 review, we strongly suggest that impact should be at the forefront of the Code, with the key outcome for any organisation’s purpose to include an explicit recommendation for trustees to put impact at the heart of decision-making. Boards should also regularly assess their impact, report on it, and show how they are taking action to improve it.
- Risk: In our work with charities and trustees, we have found that risk averse boards can prevent innovation and transformation which could increase their impact. There is therefore space for the sector to embrace opportunity more fully, alongside managing risks. The Code should better recognise this by including recommended practice around actively identifying and managing opportunities as well as risks.
- Diversity and inclusion: The ‘Diversity’ principle should be renamed to ‘Diversity and inclusion’, with a greater focus on non-visible diversity characteristics as well as visible ones. This should include giving people with lived experience support and training to take on leadership roles, and developing a culture that values and supports this.
Our response also includes recommendations on ensuring trustees include mergers, sharing models and collaboration opportunities as a regular standing agenda item, and the need for more practical advice in the Code on how charities should report on their activities to safeguard the environment.
The Code of Good Governance outlines six key principles of good governance, points out important legal requirements and how to apply the principles in practice. We draw on our experience of working with charities and funders to suggest how boards might enable charities in these uncertain times.