A revised Charity Governance Code launching this week will bring a new focus on behaviours across charity boards as it looks to raise governance standards across the Third Sector and help trustees navigate an increasingly turbulent landscape.

The Charity Governance Code is the product of a collaboration between bodies across the charity sector – The National Council for Voluntary Organisations (NCVO), the Association of Chief Executives of Voluntary Organisations (ACEVO), the national membership body for voluntary organisations in Wales WCVA, the Chartered Governance Institute (CGI) and the Association of Chairs – with the Charity Commission acting as an observer at meetings.

The last major revamp of the Code took place in 2017, and while many of the fundamentals of good governance remain unchanged, the move towards board reflection and away from box ticking and recommended practice comes in response to a changing risk landscape and recognition of the need for charity boards to think about their own effectiveness.

A new code for more effectiveness

Radojka Miljevic, Independent Chair of the Steering Group for the Charity Governance Code, told ICAEW Insights that its objective was to boost the effectiveness of trustees in the decision-making process and to ensure they understand what might reasonably be expected of an effective board. She will present a session at ICAEW’s forthcoming Charity Conference to explain the changes in details and how charities of all sizes can use the Code to enhance governance practice in a practical, manageable and meaningful way.

“In 2025 many organisations understand what that level of good looks like. Now there's more of a reflection about behaviours, for example how do we work well together? What is it that helps us be a group of people that works inclusively to listen, reflect, discuss, decide, interpret and put forward ideas.”

A focus on boards

It’s important for boards to balance their time between nailing down process but also discussing impact and strategic direction and thinking about change over longer periods of time, Miljevic adds. “How you make decisions is fundamental to being an effective board. Do you have the right information at the right time? Do you listen to different viewpoints? It's important to think about how individual board members take responsibility for their own behaviour and impact, and what they might expect of their colleagues on the board.”

The increased focus on board-level behaviours in this latest code is a response to consultation feedback. It also recognises the challenges presented by the financial pressures being felt by many charities and an environment increasingly characterised by polarised opinions. A survey conducted last year during the Code consultation process found that 85% of the respondents said they'd had to face contentious issues in their charities.

“The economic environment is difficult for everyone but charities have taken a hard knock. Recent changes to National Insurance have had a massive impact on charities because they are likely to have a concentration of staff on lower incomes, and fundraising now feels more challenging with squeezed budgets everywhere. Meanwhile, the risk environment is shifting due to things like cyber security and use of AI - there's more of an accent around charities being aware of the strategic risks.”

Consolidation of two codes

This latest version consolidates two codes – one for larger charities and another for their smaller counterparts – into one Code based on a series of 40 high-level, universal outcomes written in a way that is both readable and accessible. “It's about raising standards in the simplest way possible and encouraging the right kinds of conversations about good governance,” Miljevic says.

It is hoped that the focus on outcomes will help charity boards instigate honest conversations about governance challenges and potential improvements, Miljevic says. “We're not the commission, so we're not there to say you must do X, Y and Z. It's a voluntary code, but we all have a responsibility to provide the public, who are giving their money to charities, with confidence that charities are well governed.”

The Code also includes case studies to draw on the experience of the sector and signposts to useful resources and charity guidance. “We're not trying to encumber charities with lots of processes to work through. But it’s about encouraging them to ask, how do we know if we are providing good support and challenge? It's about being curious.”

Reflective practice sits at the heart of any kind of improvement, Miljevic says. “You have to step off the hamster wheel and talk to each other. We invariably see good outcomes when boards ask of themselves some challenging questions, such as ‘are we still working well together and are we creating a good, psychologically safe, inclusive space for our meetings?’”