Stepping into a trustee role can feel daunting, but understanding the governance frameworks that guide your responsibilities doesn’t have to be.
As you embark on your journey as a charity trustee, you’ll quickly discover that good governance isn’t just about compliance—it’s the foundation that enables your charity to achieve its mission effectively. At the heart of this sits the Charity Governance Code, a practical tool designed to help trustees like you develop the highest standards of governance.
What is the Charity Governance Code?
The Charity Governance Code is a practical tool developed by a steering group to help charities and their trustees develop high standards of governance. Unlike rigid statutory requirements, the Code is not a legal or regulatory requirement. Instead, it sets the principles and recommended practice for good governance and is deliberately aspirational: some elements of the Code will be a stretch for many charities to achieve.
This Code has been developed by a steering group, with the help of over 200 charities, individuals and related organisations. The steering group includes respected organisations such as ACEVO (Charity Leaders Network), the Association of Chairs, The Chartered Governance Institute, NCVO (National Council for Voluntary Organisations), and WCVA (Wales Council for Voluntary Action).
Legal Status: Best Practice, Not Law
It’s crucial to understand that the Code is not a legal or regulatory requirement. The Charity Code is applicable to all charities but is deliberately aspirational. It has been endorsed by the Charity Commission but is neither a legal nor regulatory obligation.
However, this doesn’t diminish its importance. The Code draws upon, but is fundamentally different to, the Charity Commission’s guidance, building on the assumption that charities are already meeting their basic legal and regulatory responsibilities. Think of it as a framework that takes you beyond mere compliance towards excellence.
The Code operates on an “apply or explain” principle. All trustees are encouraged to meet the principles and outcomes of the Code by either applying the recommended practice or explaining what they have done instead or why they have not applied it. This flexibility recognises that different charities face unique circumstances and challenges.
The Seven Principles: Your Roadmap to Excellence
There are seven principles which make up this Code, each building upon a foundation of legal and regulatory compliance:
- Organisational Purpose
The board is clear about the charity’s aims and ensures that these are being delivered effectively and sustainably. This principle ensures you never lose sight of why your charity exists and that every decision contributes to that mission.
- Leadership
Every charity is led by an effective board that provides strategic leadership in line with the charity’s aims and values. As a trustee, you’re not just a governance guardian—you’re a strategic leader shaping your charity’s future.
- Integrity
The board acts with integrity, adopting values and creating a culture which help achieve the organisation’s charitable purposes. The board is aware of the importance of the public’s confidence and trust in charities, and trustees undertake their duties accordingly.
- 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.
- Board Effectiveness
The board works as an effective team, using the appropriate balance of skills, experience, backgrounds and knowledge to make informed decisions. Diversity of thought strengthens decision-making.
- Equality, Diversity and Inclusion
The board’s approach to diversity supports its effectiveness, leadership and decision-making. This principle recognises that diverse boards make better decisions and better represent the communities they serve.
- 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.
Understanding Director Duties: The Legal Framework
While the Charity Governance Code provides aspirational guidance, as a trustee of a charitable company, you’re also bound by the seven statutory duties under the Companies Act 2006. These seven core fiduciary duties ensure directors act in the best interests of the company and its stakeholders:
- To act within powers – following your organisation’s constitution and articles
- To promote the success of the company – acting in good faith for the benefit of members as a whole
- To exercise independent judgement – making your own decisions, not merely following others’ instructions
- To exercise reasonable care, skill and diligence – using both objective and subjective standards
- To avoid conflicts of interest – preventing situations where personal interests could conflict with the organisation’s
- Not to accept benefits from third parties – maintaining independence from external influences
- To declare interest in proposed transactions – ensuring transparency about potential conflicts
These duties are owed to the company and, with limited exceptions (principally, derivative claims by the shareholders), only the company can enforce them.
Making Governance Come Alive
Governance can seem dry and technical, but innovative resources are transforming how trustees learn these essential skills. The Director Academy, powered by Governance360, offers CPD accredited board training with bite-sized online training modules designed by practitioners for real-world use.
With easy to complete courses divided into bite sized lessons that improve engagement, trustees can access browser-based training within minutes to begin upskilling. These platforms recognise that busy volunteers need flexible, practical training that fits around their other commitments whilst ensuring they understand their statutory responsibilities.
Your Journey Forward
As you begin your trustee journey, remember that governance isn’t about creating bureaucratic barriers—it’s about creating the conditions for your charity to thrive. The Charity Governance Code provides the roadmap, whilst resources like the Director Academy ensure you have the skills to navigate it successfully.
This Code is designed as a tool to support continuous improvement. Charity boards that are using this Code effectively will regularly revisit and reflect on the Code’s principles. Your role as a trustee is not just about oversight—it’s about being an active participant in building a better, more impactful organisation.
The governance landscape continues to evolve, with the Code currently undergoing review to ensure it remains relevant for 2025 and beyond. By embracing both the aspirational goals of the Charity Governance Code and understanding your statutory duties as a director, you’re not just fulfilling legal requirements—you’re contributing to a stronger, more effective charitable sector that better serves our communities.
For more on the code see https://www.charitygovernancecode.org
For more on the Director Academy by Governance360 see https://www.directoracademy.co.uk