Updated Charity Governance Code for schools

In our last edition of Education Matters, we spoke of the ongoing consultation into the Charity Governance Code in mid-2020. Following the conclusion of that consultation, the steering group issued an updated version of the Code in December 2020.

The ’Foundation and Seven Key Principles’ framework remain unchanged, but as signposted during the consultation exercise, two of the principles have been updated, with one being significantly altered from its previous version. The key changes are as follows:

Integrity principle

This principle has undergone a ‘light refresh’. The key changes are in relation to:

• A more significant focus on ensuring the organisation acts in line with ‘its values’ in everything that it does. At Moore Kingston Smith, we have been surprised to learn during our governance work to date that many of the charitable organisations we engage with do not have a set of agreed values across their trustees/governors and senior management teams. The Code refresh now brings this area into sharper focus.
• The key underlying principle of integrity and putting the organisation’s best interests first in every situation, has been expanded from just one section in the previous Code to four sections covering:
  • Not being unduly influenced by those with personal interests
  • Ensuring no person or group has undue influence in the organisation
  • Regularly checking for power imbalances at board/governing body level
  • The Charity Ethical Principles (NCVO guidance that was signposted during the consultation phase) have been included in the ‘non-binding rules and other Codes’ that organisations may wish to have due consideration of.
• Lastly it was felt that during the consultation process, the critically important issue of safeguarding was not sufficiently prominent in the Code. In this refreshed version, there is now an entirely new section that considers the governance around safeguarding, as follows:

3.7 Ensuring the right to be safe

3.7.1 Trustees/governors understand their safeguarding responsibilities and go beyond the legal minimum to promote a culture in which everyone feels safe and respected.

3.7.2 Where appropriate:

• The board/governing body makes sure that there are appropriate and regularly reviewed safeguarding policies and procedures.
• As part of the organisation’s risk management process, the board/governing body checks key safeguarding risks carefully and records how these are managed.
• All trustees/governors, staff, volunteers and people who work with the organisation have information or training on the safeguarding policy, so they understand it, know how to speak up and feel comfortable raising concerns.

Much has been written regarding safeguarding (headlines, Charity Commission bulletins and governance

case findings) and this amendment to the Code serves to ensure that trustees/governors at board/governing body level understand both their legal requirements and safeguarding policies and procedures.

Furthermore, for trustees and governors in the education sector, this ‘light refresh’ is potentially more important as the safeguarding principles on which it is based, are again in the headlights with the continuing #MeToo movement and the more recent upswing in posts on the Everyone’s Invited website regarding incidents at both public and private schools.

Diversity principle

Unlike the Integrity Principle update, a comparison of the old Code to the refreshed version around diversity is not as useful an exercise. Our governance team fed back to the consultation, commenting that the Diversity Principle was the one area of the 2017 Code that “had not best stood the test of time and needed a significant refresh”.

This feedback was agreed by the steering group (and even made its way onto the consultation update slides presented back in September 2020!) and the Diversity Principle has been completely reworked with the aid of external consultants.

• The Diversity Principle is now entitled the ’Equality, Diversity and Inclusion Principle (EDI)’, reflecting both a shift in the importance of all these three key areas – not just diversity – and also mirroring more widely-used not for profit sector terminology.
• Whereas the previous Code focused largely on considering diversity internally within an organisation (perhaps with some trustee/governing body report disclosures), the new Code outlines a ’Four step’ process which ensures that EDI practices and policies are not only considered internally but are also shared with key stakeholders and monitored and measured during this principle’s ’journey’.

Some considerations

1. Think about why EDI is important for the organisation and assess the current level of understanding.

2. Set out plans and targets tailored to the school and its starting point.

3. Monitor and measure how well the school is doing.

4. Be transparent and publish the school’s progress.

The steering group also recognised that many organisations are at different stages of their EDI journey and that more guidance on how to practically manage this process and how it may differ for sub-sectors is required. More guidance will be shared in due course.

In relation to the new EDI principle, I have been contacted by many of our audit and governance clients and questions largely fall into two categories: “I’m scared of saying the wrong thing” and/or “we, as an organisation, don’t know where to start”. The former is solved by EDI (background) training, alongside understanding why diversity, equality and inclusion in your organisation can only be seen as a positive (for example, diverse boards make better decisions). The latter often starts with posing the question in return: “what does diversity mean to your organisation and what would you like to achieve?” before building a route map (potentially over a few months or years) to achieve that goal.

We recently ran an online seminar as part of our Enterprise Series The changing face of business – inclusion matters, on the importance of diversity and inclusion which you may find interesting. You can view the video here.

We are aware that the Charity Commission continues to take a very active interest in the governance of the sector. As a result, our governance team continue to undertake several governance reviews in the sector, ranging from ‘one-off’ governance engagements to full reviews against the Code.