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New Charity Governance Code to Trigger Improved Trustee Effectiveness

16 February 2017

New Charity Governance Code to Trigger Improved Trustee Effectiveness

A new Code of Conduct announced by The Charity Commission marks a new and important forward step in ensuring the effectiveness of charity trustees under more robust governance guidance, according to a leading charity law specialist at Cheltenham law firm Lodders.

Mark Lewis, Partner and head of Lodders' specialist Charity Law team, is one of only three specialist charity lawyers in the Midlands named as an elite 'leading lawyer' by the 2017 edition of The Legal 500, and has a national ranking for the charity work which he does in the Chambers UK 2017 edition. 

He explains the new Code will replace The Charity Commission's 'The Hallmarks of an Effective Charity', which since 2008 has set out guidance on standards to help trustees improve the effectiveness of their charity:

"The Hallmarks was a key document which set out guidance on standards to help trustees to improve the effectiveness of their charity, and the principles that the Commission's regulatory framework exists to support."

"In response to the significant developments in what is expected of charities, their practices, and the legal framework in which they operate, a consultation for a new Code began on 7 November and ended on 3 February 2017."

The Charity Commission, the independent regulator of charities in England and Wales, has announced the proposal to withdraw their Hallmarks in response to the Consultation of the Code. It says it recognises that it is for the charity sector to define what good practice should be and set expectations of adherence to it.

"Following the consultation and responding to its findings, the Commission is now directing people to the 'Good Governance - a Code for Voluntary and Community Sector' as a new framework for supporting good governance," explains Mark.

"Indeed, the Commission has said that they 'strongly encourage charities... to adopt and follow the Code in their own charity'."

In its response to the new Code, The Charity Commission has expressed support of the more rigorous approach, with its stronger recommendations on board diversity, length of board appointments and transparency around areas of conflict of interest.

"The Commission very much endorses the greater emphasis on values and behavior within the new Code," adds Mark, "but has also conveyed the need for the Code to remain relevant to charities of all sizes through achieving the right balance of rigour, challenge, flexibility and proportionality."

The new Code is more incisive than the previous version: "The new Code has an overarching focus on organisational purpose and direction supported by an emphasis on key factors including leadership and integrity," Mark explains, "as well as good decision making and risk management there is a focus on leadership, as well as on integrity, diversity, board effectiveness and openness and accountability."

The new 'Good Governance - a Code for Voluntary and Community Sector' is a framework to support good governance. This was first published in 2005 by the Code Funding Group:

  •     ACEVO (Association of Chief Executives of Voluntary Organisations)

  •     ICSA (Institute of Chartered Secretaries and Administrators)

  •     NCVO (National Council for Voluntary Organisations)

  •     SCC (Small Charities Coalition - merged with Charity Trustee Networks in 2011)

  •     WCVA (Wales Council for Voluntary Action).

Mark Lewis is a charity law specialist and corporate lawyer and works with charitable and not for profit organisations, including many agricultural, sporting and ecclesiastical clients across the UK.

Lodders is a premier law firm in Warwickshire, Cheltenham, the North Cotswolds, and Gloucestershire.

Established for over 230 years, Lodders in particular works with private individuals, business owners, family businesses, landowners, rural communities, real estate and property owners, developers and investors. The firm has 25 partners, a portfolio of sector and market specific legal teams, over 130 fee earners and support staff across its office network, and has recorded year-on-year growth in recent years.

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