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New Charities Governance Code

Charities Regulatory Authority (Charities Regulator) released a new governance code for charities on Wednesday 7th November.

The purpose of the code is to promote accountability, transparency and enhance public confidence levels in the sector. This new code comes off the back of the statutory consultative panel that was established by the Charities Regulator in 2017 to consider how the administration and management of charities could be improved and to make recommendations to the Regulator on the development and implementation of governance guidelines, codes of conduct or regulations. 

Countrywide roadshows were conducted and all of the various sector stakeholders views were sought during this consultation process. While a voluntary Sector Led governance code is already in place, this new code represents the first time minimum standards on governance have been set out for the sector by the Regulator.

The key salient features of the code are as follows: 

  • Charities/NFP’s will be expected to be compliant with the code from 2020.
  • The new code is principals based and based loosely on the existing code in the UK
  • The Governance Code will have a tiered approach made up of core and additional standards. It has broad requirements which can be tailored to each charity based on its size, complexity etc
  • The Governance code will structured in terms of six principles whereby the charity must be demonstrating it is doing the following: 
  1. Advancing its charitable purpose; 
  2. Behaving with integrity; 
  3. Leading people; 
  4. Exercising control; 
  5. Working effectively; and 
  6. Being accountable and transparent. 
  • Each principle above covers a set of core standards (32 in total) and additional standards (17 in total). Every charity is expected to comply with each core standard unless it can explain why a particular standard is not applicable. More complex charities would also apply the additional standards. The charity itself would decide if it should apply the additional standards or not based on its income, number of employees and complexity.
  • Registered charities will need to include an indication of compliance to be included in annual report. A compliance record form (which can be downloaded from https://www.charitiesregulator.ie/en/information-for-charities/charities-governance-code) needs to be maintained which can be requested by the charities regulator at any time. Evidence needs to be kept to prove that the standard has been met.
  • Charities are advised to consider introducing term limits for charity trustees, with a suggested maximum of nine years in total.

For further information on the above, please contact Ronan Kilbane, Partner.

Ronan Kilbane

Audit & Business Advisory Partner

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