The Regulator for Charities in England and Wales

Key Principles of Good Governance - consultation draft

Introduction to the Refashioned Principles

Good governance is acknowledged to be essential for the success of any organisation and is now more important than ever. Members of boards play a vital role in serving their causes and communities and bring passion and commitment as well as skills and experience to the organisations they lead. They provide long term vision and protect the reputation and values of their organisations. To make a difference a board needs to have proper procedures and policies in place but it also needs to work well as a team and have good relationships within the organisation. The purpose of these principles is to assist board members to enhance their decision making, increase their accountability and enable them to provide strong leadership. This will in turn assist the people and causes their organisations were set up to benefit.

The principles set out best practice but these are closely linked with the responsibilities of charity trustees and other legal requirements that may be imposed on board members.

The six high level principles are designed to be universal and applicable to all voluntary and community organisations. It is the practice and procedures which will vary according to the type and size of the organisation. Underlying each principle is the additional principle of equality-that of ensuring equality, diversity and equality of treatment for all sections of the community. We consider that this is fundamental and it is embedded in all the principles.

In the Code we have used the term "the board " to mean the organisation's governing body. In your organisation it may be called the board (or board of directors or board of governors) the trustees, the management committee or some other name. It is the body with overall responsibility for governing the organisation, overseeing and controlling its management.

Refashioned Principles

"A good board will provide good leadership by:"

i. Understanding their role.
ii. Ensuring delivery of organisational purpose.
iii. Being effective as individuals and a team.
iv. Exercising control.
v. Behaving with integrity.
vi. Being open and accountable.

i. Understanding their role

Members of the board will understand their roles both as individuals and as a board in relation to:

  • their legal duties;
  • the provisions of the governing document;
  • the external environment;
  • the roles and responsibilities of staff, where relevant;

and in terms of:

  • overseeing the work of the organisation;
  • managing and supporting staff and volunteers, where applicable;
  • championing the organisation's vision and values.

ii. Ensuring delivery of organisational purpose

The board will ensure that the organisation delivers its stated purposes or aims by:

  • ensuring organisational purposes remain relevant and valid;
  • developing and agreeing a long-term strategy;
  • agreeing operational plans and budgets;
  • monitoring progress and spending against plan and budget;
  • evaluating results; and
  • reviewing and/or amending the plan and budget as appropriate.

iii. Being effective both as individuals and as a team

The board will have a range of appropriate policies, practices and behaviours to enable both individuals and the board to work effectively. These will include:

  • finding and recruiting new board members to meet the organisation's needs in relation to skills, experience and diversity;
  • providing suitable induction for new board members;
  • providing all board members with opportunities for training and development according to their needs; and
  • periodically reviewing their performance both as individuals and as a team.

iv. Exercising control

As the accountable body, the board will ensure that:

  • the organisation identifies and complies with all legal and regulatory requirements that apply to it ;
  • the organisation continues to have appropriate and sufficient internal financial and management controls;
  • the board regularly reviews and identifies the major risks to which the organisation is exposed and puts in place systems to manage those risks; and
  • delegation to sub-committees, staff and volunteers (as applicable) works effectively and the use of delegated authority is properly supervised.

v. Behaving with integrity

The board will:

  • act according to high ethical standards;
  • understand and manage conflicts of interest and loyalty;
  • maintain the independence of the organisation; and
  • safeguard and promote the organisation's reputation.

vi. Being open and accountable

The Board will lead the organisation in being open and accountable, both internally and externally. This will include:

  • open communications, informing people about the organisation and its work;
  • appropriate consultation on significant changes to the organisation's services or policies;
  • listening and responding to the views of supporters, funders, beneficiaries/service users and others with an interest in the organisation's work;
  • handling complaints constructively and effectively; and
  • considering the organisation's responsibilities to the wider community, for example its environmental impact.

Governance Code Steering Group, August 2009