The Governance Code is a code of practice for good governance of the community, voluntary and charitable (CVC) organisations. It is a voluntary code and is available for not-for-profit organisations to use. Such organisations are encouraged to adopt and implement the code to check that they observe best practice in managing the affairs of the organisation.
Who is the Governance Code for?
The code has been developed in a manner that can be applied to any size of CVC organisation. The code has 3 categories for organisations which are generally defined as small, medium and large. It is a resource for use by the board members, managers, employees and volunteers in such organisations. The code should be adopted and driven from board level but its implementation will affect all levels of the organisation.
How was the Governance Code developed?
The Governance Code was created and is maintained by a working group made up of highly experienced and voluntary individuals from a variety of CVC organisations. The working group was set up in 2010 and they are responsible for promoting the codes and keeping it up to date. They deal with technical queries and they ensure that it remains relevant to all sizes and types of organisations in the CVC sector.
What are the key principals of the Governance code?
The Governance Code is made up of 5 key principals, each of which has 3 sub-principals. The code provides organisations with recommended guidelines and actions in order to fully implement the principals. The principals remain the same for all 3 categories of the organisation but the actions differ to make them relevant to each category. The code sets out the following as the 5 key principals:
• Leading the organisation
• Exercising control over the organisation
• Being transparent and accountable
• Working effectively
• Behaving with integrity
How can the Governance Code assist our organisation?
If the Governance Code is adopted and implemented correctly, it will prove to be a vital tool in assisting an organisation to perform to high standards of good governance. It outlines the roles, duties and responsibilities of those who sit on the boards and management committees of CVC organisations and assist with the development of effective and relevant policies and procedures to manage the affairs of the company. The principles of the Governance Code provide guidance on the standards expected of organisations with good governance. Good governance can result in elevated reputation, effective communication with and buy-in from stakeholders, increased efficiency and success, better leadership and compliance with legal and regulatory requirements.
The Governance code sets out the following as benefits of adopting the code:
• Comfort to funders that donations are being managed by a well-run organisation;
• Demonstration of increased transparency;
• Assistance in avoiding serious risks;
• Assistance in achieving the organisation’s goals faster;
• Reduction of costs.
What do we do now?
Stakeholders are increasingly scrutinising their organisations’ policies, procedures, communications and actions. Any organisations in the CVC sector in Ireland should adopt and implement The Governance Code.
The process is not simple and it is recommended that professional assistance is sought in order to develop, review and implement the Governance Code. As well as providing comprehensive reviews and updates on matters pertaining to amendments to existing company law, Corplaw’s team of dedicated Chartered Secretaries are well placed to advise and provide guidance on standards of Corporate Governance.