Watch our short video that explains good governance.

To ensure that you have a well-run, efficient organisation that complies with laws and regulations, and that sustains a good reputation whilst making a difference based on its targets it will need good governance.

Although a board of trustees are responsible for governance, they rely on employees, volunteers, advisors and other stakeholders.

A useful tool that helps charities and their trustees with their governance is called the Charity Governance Code. The code is also useful for not-for-profit organisations that deliver a public, community or social benefit but is not a legal requirement.

The code has the following set of principles.

• Organisational purpose
  The board is clear about the charity’s aims and ensures that these are being delivered effectively and sustainably. Charities exist to fulfil their charitable purposes. Trustees have a responsibility to understand the environment in which the charity is operating and to lead the charity in fulfilling its purposes as effectively as possible with the resources available.

• Leadership
  Every charity is led by an effective board that provides strategic leadership in line with the charity’s aims and values. Strong and effective leadership helps the charity adopt an appropriate strategy for effectively delivering its aims. It also sets the tone for the charity, including its vision, values, and reputation.

• Integrity
  The board acts with integrity. It adopts values, applies ethical principles to decisions and creates a welcoming and supportive culture that helps achieve the charity’s purposes. The board is aware of the significance of the public’s confidence and trust in charities.  It reflects the charity’s ethics and values in everything it does. Trustees undertake their duties with this in mind.

• Decision-making, risk and control
  The board makes sure that its decision-making processes are informed, rigorous and timely, and that effective delegation, control and risk assessment, and management systems are set up and monitored.  The board is ultimately responsible for the decisions and actions of the charity, but it cannot and should not do everything.

• Board effectiveness
  The board works as an effective team, using the appropriate balance of skills, experience, backgrounds, and knowledge to make informed decisions. The board has a key impact on whether a charity thrives. The tone the board sets through its leadership, behaviour, culture and overall performance is critical to the charity’s success.

• Equality, diversity and inclusion
  The board has a clear, agreed and effective approach to supporting equality, diversity and inclusion throughout the organisation and in its own practice. This approach supports good governance and the delivery of the organisation’s charitable purposes. Addressing equality, diversity and inclusion helps a board to make better decisions.

• Openness and accountability
  The board leads the organisation in being transparent and accountable. The charity is open in its work unless there is good reason for it not to be. The public’s trust that a charity is delivering public benefit is fundamental to its reputation and success, and by extension, the success of the wider sector.

The code can be found at www.charitygovernancecode.org