Governance sits at the heart of every well-run charity and shapes how decisions are made, including how resources are managed and how an organisation maintains the trust of its beneficiaries and the wider public.

With a refreshed Charity Governance Code now in place, it is a good moment for boards to take stock of the rules and ensure their governance is up to scratch.

The regulatory foundation

The Charity Commission’s CC3 guidance, The Essential Trustee, has for some time defined the six core legal duties that apply to every trustee of a registered charity in England and Wales.

It says that trustees must:

  • Ensure the charity carries out its purposes for the public benefit
  • Comply with its governing document and the law
  • Act in the charity’s best interests
  • Manage resources responsibly
  • Act with reasonable care and skill
  • Ensure the charity is accountable

These duties apply collectively to the board as a whole and, therefore, each trustee is responsible for understanding them.

However, research published by The Charity Commission last year found that less than half (46p er cent) of trustees consult it at least once a year.

Unsurprisingly, those who do report greater confidence in their compliance and decision-making.

A reformed code for trustees

A refreshed Charity Governance Code was published towards the end of 2025 – marking one of the most significant updates since 2017.

Developed by a cross-sector steering group and public consultation, it sets out eight core principles for boards to adopt through an ‘apply or explain’ approach.

This means that charities are encouraged to adopt each principle or explain clearly in their annual report why they do not.

The eight principles are:

  • Foundation – Trustees take responsibility for understanding the charity, their legal duties and their ongoing responsibilities.
  • Organisational purpose – The board ensures all activity is directed at achieving the charity’s aims and benefiting the public.
  • Leadership – The board provides clear strategic direction and sets the culture for the organisation.
  • Ethics and culture – Decisions and behaviours reflect the values of the charity.
  • Decision making – trustees take personal responsibility for decisions and work collaboratively to reach agreement.
  • Managing resources and risks – The board stewards, develops and allocates resources responsibly.
  • Equity, diversity and inclusion – Now a standalone principle, boards should have appropriate arrangements and resources in place to monitor and achieve their EDI plans.
  • Board effectiveness – The board regularly reviews and improves its own performance.

Unlike the previous version, the 2025 Code applies to charities of all sizes within a single unified framework. It offers notes and examples to trustees in its guidance that reflect the varying contexts of smaller and larger organisations.

The update is described as evolution rather than revolution, but the structure and emphasis have been meaningfully adjusted.

In particular, equity, diversity and inclusion has been elevated from a recommended practice to a standalone principle.

Large charities are now encouraged to carry out a review of their board’s approach to EDI through an external evaluation process every three years.

In recognition of the rapidly changing digital landscape, the Code now suggests charities also adopt a policy for the use of technology and artificial intelligence tools.

The foundation principle is also new and explicitly asks whether trustees understand their legal duties, they are committed to continuous learning and put the charity’s interests first.

Charities are asked to publish a brief statement in their annual report explaining how they apply the Code. While this isn’t a strict regulatory requirement, it is an important signal of accountability to funders, auditors and stakeholders.

Practical steps for boards

The Code is a practical tool rather than a compliance checklist. Boards should set aside time to work through each principle together, identify areas for improvement and agree a plan. A good starting point is ensuring every trustee has read CC3, followed by a structured board discussion on how each of the eight principles applies to your organisation.

If you would like support reviewing your governance arrangements or working through the requirements of the new Code, please get in touch with our team.