Charities & Not-for-Profit Update: New Developments in Governance of Charities
08 June 2018
The Charities Regulatory Authority (CRA) recently published the Report of the Consultative Panel on the Governance of Charitable Organisations. The Report addresses a number of areas, including regulations relating to governance, codes of governance, guidance and support of charity trustees, rotation and length of term of office of charity trustees.
New CRA Code of Governance
The Consultative Panel, which has been working on the Report since March 2017, concluded that the CRA should produce a code of governance for charities. The Report proposes that the CRA code of governance should facilitate better administration, management and governance of charities and that it should complement, rather than restate, existing legal requirements. The Report also proposes that the code of governance should:
- be principles-based
- operate on a ‘comply or explain’ basis
- be proportionate
- be developed in collaboration with the charity sector
The CRA accepted the 10 proposals set out in the Report and stated that it aims to publish a code of governance before the end of 2018. Charities come in all shapes and sizes, so when preparing the code, the CRA intends to set up a reference group of organisations representing charity trustees, governance groups and donors to provide feedback to ensure the code will be suitable for different charities.
Good governance is essential for running a successful charity. Charities that do not currently have a code of governance can start the journey of compliance with the existing Code of Practice for Good Governance of Community, Voluntary and Charitable Organisations in Ireland. Alternatively, charities can implement a bespoke code of governance that is suitable to their charity and reflects best practice in governance.
If your charity requires assistance, our Charities & Not-for-Profit team can help with drafting a code of governance that takes into account your charity’s particular circumstances and activities. Also, this could be a useful time for your board/charity trustees to avail of our Governance Clinic. Our experienced and specialist lawyers would attend a meeting of your charity’s board and provide your board/charity trustees with the key points of good governance.
Conflicts of interest
Separately, the CRA has recently published a guide which is aimed at assisting charity trustees in managing conflicts of interest, which is available here. A draft conflict of interest policy and template register of interests accompany the guide, both of which are available here.
In what has been a busy publishing period for the CRA, it launched guidelines on 18 May to assist organisations which are planning to apply to be registered Irish charities. A copy of these guidelines is available here.
The Report of the Consultative Panel is a useful reference document for charity trustees. Although the CRA will produce a governance code as a result of the Report, it is not recommended to postpone adopting a code of governance until then. Good governance is essential for all charities, regardless of size or purpose, and it is important to have a governance code that suits your charity.
If you would like further detail or assistance on any of these issues, please contact our Charities & Not-for-Profit team.
The content of this article is provided for information purposes only and does not constitute legal or other advice.