New tool helps put Charity Investment Governance Principles into practice

Effective investment governance is fundamental to ensuring charities can deliver their charitable purposes over the long term. Trustees are expected to make well-informed decisions that balance financial sustainability with their legal duties, while responding to an increasingly complex investment environment shaped by evolving regulation, responsible investment considerations and stakeholder expectations.

The Charity Investment Governance Principles (CIGP) have been developed to help trustees strengthen their governance arrangements and improve the quality of investment decision-making. Produced through a cross-sector collaboration, involving organisations including the Charity Finance Group (CFG), the Association of Charitable Foundations (ACF), NCVO, WCVA and the Charities Responsible Investment Network (CRIN), with input from ICAEW and other professional bodies, the Principles provide a practical governance framework that complements the Charity Commission's CC14 guidance on charity investments.

The Principles are not intended to prescribe investment strategies. Instead, they encourage trustees to adopt governance arrangements that are proportionate to the size, complexity and nature of their charity's investments. Whether overseeing a large investment portfolio or managing surplus cash reserves, trustees are encouraged to consider whether their governance processes enable them to make informed, evidence-based decisions that support their charity's objectives.

Structured around key areas of investment governance, the Principles help trustees consider the purpose of their investments, establish clear governance structures and responsibilities, define appropriate investment objectives and ensure effective oversight and review. They also highlight the importance of maintaining the right mix of skills and expertise within trustee boards and recognising when specialist advice is required.

A key strength of the framework is its flexibility. Rather than adopting a one-size-fits-all approach, the Principles recognise that charities operate in different contexts and face varying levels of investment complexity. This enables trustees to apply the guidance in a way that is proportionate while still demonstrating robust governance and accountability.

Investment governance has become an increasingly important area of trustee responsibility. Developments in charity law, including the High Court's decision in Butler-Sloss and Others v Charity Commission for England and Wales, have reinforced the importance of considering how investment decisions align with a charity's purposes and values, alongside delivering appropriate financial returns. At the same time, trustees are facing greater scrutiny over responsible investment, environmental, social and governance (ESG) factors and the transparency of their decision-making.

ICAEW has supported the development of the Charity Investment Governance Principles as part of its wider commitment to promoting high standards of governance across the charity sector. For finance professionals advising charities, the Principles provide a valuable framework for supporting trustee boards, facilitating informed discussions on investment governance and helping charities demonstrate that decisions are underpinned by appropriate processes and sound judgement.

The newly added self-assessment tool further supports continuous improvement by enabling charities to evaluate their existing governance arrangements and identify areas for development. Used alongside existing regulatory guidance, the Charity Investment Governance Principles offer trustees and advisers a practical resource for strengthening oversight, improving accountability and ensuring investment decisions remain aligned with both fiduciary duties and the long-term delivery of charitable purposes.

• Find out more about CIGP and download the self-assessment tool