An update on the revised version of the Governance Code for Community, Voluntary and Charitable Organisations which was published last week following a year-long review, courtesy of Alan McDonnell , Chair of the Good Governance Working Group
The Governance Code was developed by a group of organisations representing the community, voluntary and charity sector and was first published in 2012. Since then over 1,200 organisations have signed up, with 300 listed on the Code’s register as fully compliant and a further 900 registered as ‘on the journey’ to compliance.
The Code is principles-based and is adopted on a “comply-or-explain” basis. It comprises a set of recommended practices for the boards of community, voluntary and charitable organisations.
In late 2015 the Governance Code Working Group (GCWG) undertook a review of the Code to determine if it can be improved. After a widespread consultation that review is now complete and the revised Code has been published on www.governancecode.ie
In summary the Review found that:
The Code’s adoption journey requires a determined commitment and ownership by a board and takes a minimum of two years to complete.
- The majority of adopters interpreted the recommended practices to be rules with a minority seeing them as principles and practices to help a board set and oversee the achievement of their vision and objectives
- Boards should be held to account for the veracity of their comply-or-explain declarations.
- These declarations should be open to verification and ratings by their stakeholders.
- Calls for the Code to be turned into mandatory rules should be resisted as that will only reduce governance into box-ticking compliance by board members with little affinity for the rules.
- Good governance requires a board to consciously align the organisation’s culture and values with its strategy to ensure it achieves its objectives in an ethical manner.
- The Code’s five principles and their recommended practices have proven to be very workable and as valid today as they were in 2012.
Based on these findings the 2012 Code is being re-issued today with its original principles and practices intact. However changes have been made to the adoption processes but the big evolution is what accompanies the Code and that is, the Code Stewardship Guidelines. These Guidelines are designed to empower stakeholders such as members, dependents, donors or funders to hold boards to account.
Alan McDonnell, Chairperson of the GCWG said,
“The primary finding of our Code review was the need to empower stakeholders to hold boards, declaring adoption of and compliance with the Code, to account.
“We have done this by publishing a detailed Code Stewardship Guidelines which provides stakeholders, or their representatives, with a structured process and ratings methodology.
“This solution means that boards can still undertake the adoption journey on a comply-or-explain basis but fully aware that the veracity of their declaration of compliance and explanations for divergence from the Code’s recommended practices will be subject to closer stakeholder scrutiny.
“Governance is rapidly evolving with widespread international debates underway about the different board behaviours that result from rules-based versus principles-based models. The GCWG are avid contributors to this ongoing debate but at this point in time, are of the firm view that the principles-based model with empowered stakeholder stewardship is most appropriate for the Irish community, voluntary and charity sector”.