Introduction: The Governance Code
Welcome to your Governance Code: a Code of Practice for Good Governance of Community, Voluntary and Charitable Organisations in Ireland.
All Community, Voluntary and Charitable (CVC) Organisations have a responsibility to provide and follow a code of good practice when it comes to how their organisations are run. It is the responsibility of the people who run the organisation, usually called the board or management committee - to make sure this happens.
Up to now, there have been no clear guidelines to help people on the boards of such organisations to run their organisations and well run CVC organisations have not had access to a tool which allows them to demonstrate their high standards of governance to their stakeholders. In the past some organisations have failed and been embarrassed through being run poorly and this can shatter public confidence and trust. This is why we have joined forces to put in place a Governance Code - which has been created for the sector by the sector.
What does governance mean?
Governance refers to how an organisation is run, directed and controlled. Good governance means an organisation will design and put in place policies and procedures that will make sure the organisation runs effectively.
But good governance is not about rules. It is an attitude of mind. It is about the ethical culture of the organisation and the behaviour of the people on the governing body. This Governance Code aims to make sure that these organisations meet their responsibilities and run their organisations efficiently and effectively.
The Governance Code clearly outlines the roles, duties and responsibilities of all those who sit on boards and management committees of Community, Voluntary and Charitable Organisations. It provides, for the first time, a set of guiding principles for governance as well as clear actions that allow those principles to become real within an organisation. In effect, it provides a 'job description' for people who sit on boards and management committees.
Implementation of this Code will help our organisations to perform to the highest standards possible and give confidence to all those involved with them.
The intention is for the Governance Code to:
- Become the standard definition of good practice in governance for the CVC Sector in Ireland and;
- Inform the standards that will be required by both funders and Regulators.
For this to happen, we, as groups and organisations need to adopt it and follow it in large numbers.
This Governance Code can also apply to sports and arts group, clubs and associations and any non-profit organisation.
It is important to note that the Governance Code is not a management guide. That means you will need to refer to other resources for various aspects of management practice. This website will provide links to resources that might help.
Why should my organisation adopt the Governance Code?
Your organisation should adopt this new Governance Code because it is the right thing to do. In doing so your organisation will benefit in many ways. Adopting the Code will:
- Reassure current funders that their money is being managed by a well run organisation with good governance;
- Increase transparency - in that everyone knows exactly how the organisation is being run;
- Help you avoid bad risks;
- Help you achieve your goals faster, and;
- Reduce costs.
Widespread adoption of the Code across the Community, Voluntary and Charitable Sector will help everyone involved - including the public and the beneficiaries of these organisations - but also the sector itself.
What are the principles of the Code?
The Governance Code is based on five main principles, each with three sub-principles. For each principle there are recommended guidelines and actions on how to put that principle in place for your organisation. Having taken the actions, you will then know that you are adopting that particular principle.
Will the Code work for all organisations?
The Code has been designed in such a way to make it proportionate and user-friendly for all organisations in the sector no matter what their size or stage of development. This is done through defining three categories of organisations in terms of how governance is done in their organisations. Whilst the five principles remain the same across the three categories, the actions will be different. You are invited to pick from three organisational types to find the set of actions most suitable to your organisation.
Comply or Explain?
The Governance Code is principles-based, rather than rule-based, and it is voluntary. It is expected that groups and organisations will compare themselves to the standards outlined in the Code on a 'comply or explain' basis. This means that you measure your organisation against the principle in question, specifically against each of the actions for that principle. (There is a checklist supplied to make it easier for you to do this). After this you make any changes needed to bring your organisation in line.
Having done that, you are now entitled to say that your organisation complies with the Governance Code for community, voluntary and charitable organisations. You should communicate this fact on your website, in your newsletter etc.
In summary, 'comply or explain' means that organisations should make it publicly known how they have complied with the Code and explain where they have not.
The intention is for The Governance Code to become the standard definition of good practice in governance for our sector and will inform the standards that will be required by both funders and the Charity Regulator in due course. For this to occur, we, as groups and organisations need to accept and adopt it in large numbers.
It is important to note that this Code and its associated documentation is not a management guide. Therefore, in order to complete some of the implementation actions as suggested here, organisations may need to refer to resources already on the market for various aspects of management practice that may be needed.
Who had a say in developing this Code?
Between Autumn 2009 and Spring 2011, a Working Group (see section 7) worked on the development of the Code. Read about the organisations in the Working Group. They invited feedback on the concept and on the first draft from:
- Sample community, voluntary and charitable groups of all sizes;
- Private funders;
- Statutory authorities and funders, and;
- Other stakeholders.
All contributors commented that a Governance Code would be very helpful for the Community, Voluntary and Charitable Sector. A complete draft of the Code was then developed and published publicly for a full public consultation. This phase began in May 2011 and finished at end July 2011. It involved:
- Information and consultation events around the country;
- Surveys, and;
- Written feedback (submissions and comments sent by email).
This Code is therefore a product of the extensive feedback from the public consultation. Essentially, the principles of the Code remain the same whilst the presentation has been made more reader and user-friendly. Read more about the changes made.
You can see the list of those who participated in the consultation here.
During the second half of 2011 the Working Group took on board the feedback from the public consultation and finalised the Governance Code. It was published in February 2012, along with a range of checklists (see the sidebar) and resources to help organisations comply.
Adoption of and Compliance with the Code
The Code of Governance was published in March 2012 on this website. Organisations in the Community, Voluntary and Charitable Sector are now asked to schedule time to adopt the Code and work towards complying with the implementation actions that underpin each principle.
The Working Group invites all organisations who decide that they want to adopt the Governance Code to contact us at email@example.com. We will maintain a publicly available list of the organisations that are ‘on the code-adoption journey’.
When such organisations have made a board/committee decision that their organisation now actually complies with the Code, the Working Group asks that a copy of one-page principles sheet, signed by the relevant board members, is also sent to us. We will then add their name to the publicly available register of organisations which comply with the Code. Any non-profit organisation is welcome to adopt the Code and tell us about it.
As organisations get used to using the Governance Code they will learn things that other organisations can benefit from. We ask them to tell us these tips so that we can tell others. Send your tips to firstname.lastname@example.org. We hope that by using this website as a central point, people can access new resources and tips which will help make it easier for them to use the Code.
This Code is not a management guide. That means you will need to refer to other resources for various aspects of management practice. This website provides links to resources that might help.
What About Other Codes?
Other Codes of Corporate Governance exist. It is more important to comply with a high standard corporate governance code than it is to comply with only this particular Governance Code. For example, the Dóchas Code of Corporate Governance for NGOs is recognised by the Working Group as being of an equivalent high standard to this Code of Governance for Community, Voluntary and Charitable Organisations. Therefore, organisations should not consider that they should comply with both of these codes. Instead, they should pick the one that best suits their purposes.
Who are The Working Group?
The following organisations from the Community, Voluntary and Charitable Sector were active members of the Working Group:
- Boardmatch Ireland
- Business in the Community
- Carmichael Centre for Voluntary Groups
- Clann Credo
- Disability Federation Ireland
- Irish Charities Tax Reform
- Volunteer Ireland
- The Wheel
These organisations all have an expertise, interest and track record of supporting organisations in the community, voluntary and charity sector to improve their governance practice.
More information about each of these organisations can be found in the contact section of this website.
The organisations in the Working Group worked together and met every month from Autumn 2009 through to end 2011. Sub-groups were formed to deal with specific aspects of the work between meetings.
The project was not funded and the members of the working group gave their time and commitment on a voluntary basis in the belief that the outcome would be beneficial for all.
The organisations involved in the Working Group share the responsibility for guarding the standards in this Code. They have a written agreement on this. They have committed to reviewing the Code within three years in light of the experience organisations have in adopting it.
In 2009 Dóchas and the Corporate Governance Association of Ireland (CGAI) published a 'Code of Good Governance for Development NGOs'.(NGO stands for non-governmental organisation.)
The Wheel's view was that a similar Code could be very useful for the broader Community, Voluntary and Charitable Sector in Ireland. The Corporate Governance Association of Ireland supported this idea.
There followed consultation with members by The Wheel and also by Carmichael Centre for Voluntary Groups respectively about the interest in adapting the 'Dóchas /CGAI Code' for the broader CVC Sector. After a positive response, a coalition of eleven organisations was invited to form the Working Group to progress developing a Governance Code for our Sector.
Early on in the process the Working Group decided to take a different approach to that followed in the Dóchas/CGAI Code. This was based on their study of:
- Materials produced in the UK from a review of the Governance Code for the Voluntary Sector. The UK Code (which was very similar to the Dóchas/CGAI Code for Development NGOs here in Ireland) had been used in the UK for over five years;
- The Report on Proportionate Governance for Voluntary Groups in the UK, produced by Mike Hudson, Director of Compass Partnership.
- Materials produced by Sheila Cahill and Carmichael Centre's training and support service on standards of governance for small community, voluntary and charitable organisations.
The Working Group would like to thank all of the above for sharing their work.
The CGAI team involved in the development of this Code were:
- Alan McDonnell (Chairman),
- Jim Corbett
- Dermod Dwyer
- Conall Lavery
- Liam Marnane
- Tom Quinn.
The Working Group would also like to thank all the groups and individuals in each of their organisations who have contributed. In particular, we thank Sheila Cahill for her work on producing the early text for the Code and its suggested actions.
We also thank Femi Atoyebi at The Wheel for his support to the Working Group and the project.
The National Adult Literacy Agency (NALA) kindly provided an initial edit of the Governance Code using plain English guidelines. This was to help users better understand and use it. For more information on all plain English guidelines go to NALA's plain English website: www.simplyput.ie.
The Wheel supported and managed the project, including the development of this website. It will continue to provide an 'administrative home' for the Code and the Working Group and links to resources that might help.