Understanding the Charity Governance Code: A Plain English Guide

Understanding the Charity Governance Code: A Plain English Guide

The Charity Governance Code is the main framework UK charities use to check how well their board is run. Here is what it actually says, and what it means for your trustees.

Quick answer

The Charity Governance Code is a voluntary framework of eight principles that helps UK charity boards run well. It is not law, but the Charity Commission expects charities to explain their approach to it. It covers areas like leadership, decision-making, risk and accountability, and applies to charities of any size.

• It is voluntary, not a legal requirement, but it is widely expected across the sector
• Built around eight principles, including a new Foundation Principle added in the November 2025 update
• Works on an “apply or explain” basis, not a strict checklist
• Applies to charities of every size, though what “good” looks like will vary depending on your size and resources

In this guide

1. What is the Charity Governance Code?
2. The eight principles explained
3. What this means for your board
4. Putting the Code into practice
5. Frequently asked questions
6. Key takeaways

1. What is the Charity Governance Code?

The Charity Governance Code sets out what good governance looks like for a UK charity board. It was written by a steering group that includes the Association of Chairs, the Chartered Governance Institute, NCVO and WCVA, with input from over 200 charities and individuals. The most recent update was published on 3 November 2025.

The Code is not a law and it is not enforced by the Charity Commission. It sits above your basic legal duties as a trustee, on the assumption that you are already meeting those. Think of it as a description of best practice rather than a rulebook.

How the Code works: apply or explain

The Code uses an “apply or explain” approach. You are expected to either follow the recommended practice or explain, usually in your annual report, what you do instead and why. This gives smaller charities room to take a proportionate approach, provided you can show you have thought about it.

Pro tip: a short paragraph in your annual report covering how your board applies the Code, or why it takes a different approach, is usually enough. It does not need to be lengthy. It needs to show you have genuinely considered it.

2. The eight principles explained

The 2025 update restructured the Code around eight principles that apply to charities of any size. Large charities with staff and complex structures get some extra notes, but the core principles are the same for everyone.

1. Foundation Principle (new for 2025)
Trustees take time to understand their legal duties, their charity’s governing document, and how to manage conflicts of interest. This was added because a lot of governance problems trace back to trustees not fully understanding the basics of their own role.

2. Organisational Purpose
The board is clear about the charity’s aims and checks that activities are actually delivering them.

3. Leadership
The board provides clear strategic leadership in line with the charity’s aims and values.

4. Ethics and Culture
Trustees model ethical behaviour and help build a culture that supports the charity’s purpose.

5. Decision-making, Resources and Risk
The board makes decisions in an informed and timely way, with clear delegation and proper risk management. The 2025 update added references to AI use, cyber security and ethical investment.

6. Board Effectiveness
The board works well as a team, with the right mix of skills, experience and backgrounds, and reviews its own performance regularly.

7. Equity, Diversity and Inclusion
EDI is now a standalone principle. Boards need a genuine plan for diversity, with resources to back it up, not just a policy statement.

8. Openness and Accountability
The board is transparent and accountable, and is open about its work unless there is good reason not to be.

If you have seen an older version of the Code referring to seven principles, that is out of date. The Foundation Principle is a new addition as of November 2025.

3. What this means for your board

It is guidance, but it carries weight

Even though the Code is not compulsory, funders and commissioners increasingly ask charities to show how they meet it. Being able to point to a considered approach can support funding applications and reassure donors.

Statutory duties still apply separately

If your charity is set up as a charitable company, trustees are also directors under company law and carry the seven statutory duties set out in the Companies Act 2006: acting within your powers, promoting the success of the charity, exercising independent judgement, and so on. These are legal duties, not aspirational ones, and they apply whether or not you have engaged with the Code. If your charity is a CIO, trust or unincorporated association, the detail differs slightly, so it is worth checking which structure you are working under.

You do not need to do everything at once

The Code is meant to support ongoing improvement, not a one-off compliance exercise. If it has been over a year since your board last looked at its governance, a sensible starting point is simply to schedule a review.

4. Putting the Code into practice

A few practical steps make this manageable for a small or medium-sized board:

• Read it as a board, not individually. Set aside 20 minutes at a meeting to talk through the principles together.
• Give new trustees a proper induction. The Foundation Principle exists precisely because trustees are often not given time to understand their governing document and legal duties when they join.
• Write down your “apply or explain” position. Even a page is enough, and it makes next year’s annual report easier to write.
• Keep a record of decisions and the reasoning behind them. This matters for the Decision-making, Resources and Risk principle, and it is the sort of thing that is easy to lose track of in email threads.
• Review annually, not just when something goes wrong. A short yearly check-in against the eight principles keeps things manageable.

This is where a lot of boards struggle, not because they do not understand the Code, but because trustee training, board papers, decisions and policies end up scattered across email and personal drives. Governance360 was built by charity trustees to bring this together in one place: a live document library, board meeting tools, and CPD-accredited trustee training through the Director Academy, so your board has one home for governance rather than several. It will not do the thinking for you, but it does make it easier to show your working.

Frequently asked questions

What is the Charity Governance Code?

It is a voluntary framework that sets out good practice for UK charity boards, built around eight principles covering leadership, decision-making, risk, diversity and accountability. It was developed by a steering group including NCVO, the Association of Chairs and the Chartered Governance Institute.

Is the Charity Governance Code a legal requirement?

No. It is voluntary and not enforced by the Charity Commission, although the Commission has endorsed it. Your legal duties as a trustee come from charity law and, if your charity is incorporated, from company law.

How many principles does the Charity Governance Code have?

Eight, following the update published on 3 November 2025. This includes the new Foundation Principle. Older versions of the Code referred to seven principles.

What is the Foundation Principle?

It is the newest principle, added in the 2025 update. It requires trustees to invest time in understanding their legal duties, their charity’s governing document, and how to manage conflicts of interest.

Does the Charity Governance Code apply to small charities?

Yes, the principles apply to charities of every size. Larger charities with staff and more complex structures have some extra notes, but small charities are expected to apply the same core principles in a way that is proportionate to their size.

What does “apply or explain” mean?

It means you either follow the Code’s recommended practice, or you explain what you do instead and why. Most charities cover this briefly in their annual report.

Who wrote the Charity Governance Code?

A steering group made up of ACEVO, the Association of Chairs, the Chartered Governance Institute, NCVO and WCVA, with input from over 200 charities and individuals during development.

How often should we review our governance against the Code?

Annually is a reasonable rhythm for most small and medium-sized charities. If it has been over a year since your last review, that is a good sign to schedule one.

Do all charity structures have to follow the same rules?

The Code itself applies the same way regardless of structure. Your separate legal duties differ, though: charitable companies carry statutory director duties under the Companies Act 2006, while CIOs, trusts and unincorporated associations follow slightly different legal frameworks.

Where can I read the full Charity Governance Code?

The full text is available at charitygovernancecode.org, along with supporting guidance and resources.

Key takeaways

1. The Code is voluntary but influential. It is not law, but funders, commissioners and the wider sector increasingly expect charities to engage with it.
2. Eight principles, not seven. The November 2025 update added the Foundation Principle, focused on trustees understanding their own legal duties and governing document.
3. “Apply or explain” gives you flexibility. You do not have to tick every box. You need to show you have genuinely thought about each principle.
4. Your legal duties sit alongside the Code, not instead of it. If you are a charitable company, statutory director duties under the Companies Act 2006 apply regardless of how you approach the Code.
5. Small, regular steps beat one big push. An annual review, a proper trustee induction and a written record of your position cover most of what the Code expects.

The bottom line: the Charity Governance Code is not something to fear or ignore. It is a practical checklist for building a board that works well, and most small charities are closer to meeting it than they think.

Next steps

A sensible starting point:

• Download the Code from charitygovernancecode.org and share it with your board
• Put 20 minutes on the agenda for your next meeting to talk through the eight principles
• Note down where you are already meeting each principle, and where you are not

If you would like to see how Governance360 supports this, with board papers, a live risk register and CPD-accredited trustee training in one place, you can start a free trial here, or read our full governance guide for a broader look at governance in growing charities.

Sources

• Charity Governance Code – official website: https://www.charitygovernancecode.org
• Charity Commission for England and Wales – The Essential Trustee (CC3): gov.uk
• Trowers & Hamlins – Charity Governance Code 2025: What’s New: trowers.com
• Schofield Sweeney – The New Charity Governance Code 2025: schofieldsweeney.co.uk
• Good Governance Institute – A Milestone for Third Sector Leadership: good-governance.org.uk
• Companies Act 2006, general duties of directors, sections 171 to 177: legislation.gov.uk

Last updated: 03/07/2026. Reading time: approximately 7 minutes.

Some of the research and drafting for this article may have been produced with assistance from Claude, Anthropic’s AI assistant. Content is then reviewed, edited and augmented with the experience of the Governance360 team before publication. Sources are provided at the foot of this article so you can verify the information directly.