Charity Commission says it will withdraw good governance guidance

In its response to a consultation on the code, the regulator says it would be happy to refer charities to a new code drawn up by various charity sector bodies

Charity Commission
Charity Commission

The Charity Commission is prepared to withdraw its CC10 good governance publication and refer charities to a new sector-created governance code instead, it has confirmed.

A new edition of the Charity Governance Code, which was previously known as Good Governance: a Code for the Voluntary and Community Sector and was last updated in 2010, was published for consultation in November.

Updates to the new code include sections on the importance of charity and board culture and behaviours, how vital diversity is to good governance, greater clarity on good practice in some areas such as board membership and greater emphasis on values, accountability and transparency. Another section says that charities should consider merging or winding up if others are fulfilling similar aims more effectively.

The reworked code was developed by a working group made up of representatives from the charity leaders body Acevo, the National Council for Voluntary Organisations, the Small Charities Coalition, the governance body the ICSA, the Association of Chairs and the Wales Council for Voluntary Action. The Charity Commission acted as an observer.

In its response to the consultation, published today, the commission says it welcomes the new code and as a result proposes withdrawing its CC10 document, also known as The Hallmarks of an Effective Charity.

The consultation response says: "We recognise, however, that this is the sector’s code. The commission does not aspire to own or enforce it, or pronounce on what it should say.

"We intend to continue to endorse and promote it as the standard of good governance practice to which all charities should aspire (unless some other code takes precedence), following and applying its principles proportionately to their circumstances.

"In line with this we propose to withdraw our publication The Hallmarks of an Effective Charity. We propose instead to refer charities to the code as setting out relevant standards of good practice."

Also in its response to the consultation, the Charity Commission says it supports the new foundation principle, which sets out a shared expectation that all trustees understand their roles and legal responsibilities.

The commission response says the code’s suggestion that larger charities publish a statement in their annual reports setting out how they have applied the code should be a firmer requirement.

In a blog post on the Charity Commission’s website, Sarah Atkinson, director of policy and communications at the regulator, said: "We support the more rigorous approach in the new draft – a more demanding code reflecting changing public expectations of charities, trustees and senior managers."

The consultation on the new code ends tomorrow.

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