Governance
Governance
This page gives links to a range of information about governance.
What is Governance?
Governance is described as the process of running an organisation with integrity based on set rules and systems.
More definitions of governance can be found from these sources:
- Governance pages – defines in details, what governance is in a no frills way.
- NCVO Publication – is a 34 page pdf booklet on all you need to know about governance and organisational structure plus legal forms.
- ACEVO - gives definition of governance and looks at why governance is so important
- NCIL – looks at governance from the perspective of user led organisations(ULOs)
- Code of Good Governance - The Code has been formulated to help and support board members in the important and rewarding work that they carry out. It is primarily aimed at trustees in the voluntary and community sector but will also be useful to chief executives who provide the bridge between trustees and staff.
What is a Governing Document?
The governing document of an organisation is the constitution of the organisation and it spells out what the organisation is, what it can do, what it cannot do and how it should be run. The governing document of an organisation is a legal document and can be called several names; constitution, trust deed, memorandum of association etc.
More
- Governance pages – for more definition and what constitutions are used for
- Charity Commission – for model templates that you can adopt and adapt
- NCIL – for more on governance and ULOs and to see examples of accessible governing documents
Who are the People charged with Governance?
The people who are given the responsibility of running an organisation are known as Trustees. They are also the people who are collectively responsible for the overall governance and strategic direction of the charity, and financial health, probity of its activities, developing the organisation’s aims, objectives and goals in accordance with the governing document, legal and regulatory guidelines.
The word trustee is a generic legal term that applies to anyone with the responsibility of governing in an organisation. So if in your organisation they are known as directors, management committee or committee members as long as your organisation has a charity status they are trustees in the eyes of the law.
More detailed description of a trustee can be found on:
Registering Your Organisation
Registering an organisation depends on what structure the members/management committee chooses. However if your organisation's income is below £5,000 there is no legal requirement to register as a charity with the Charity Commission. You may choose to register as a company limited by guarantee but it is unnecessary to register as a charity.
Legal Form
This means the sort of body an organisation is in the eyes of the law, e.g. whether it is a company, a trust or an association. Some legal forms are governed by statute e.g. the Companies Acts; others are governed by case law. Legal forms can be either incorporated or unincorporated. There are two main legal forms that most DPOs adopt a Charitable Association and a Company Limited by guarantee (charitable company). These are described below:
- Charitable Association – a charitable status is a legal form that several organisations can adopt. It is a status conferred on an organisation where certain conditions imposed by charity law are met. In order to be a charity an organisation must exist for purposes that the law recognises as exclusively charitable and must exist for the public benefit. The association has no legal personality and the trustees/members can be held personally liable for actions taken by the association. Charitable purposes are clarified in section 2 of The Charities Act 2006
2. Charitable Company Limited by Guarantee – a charitable company is an organisation that is under the law recognised to have its own distinct legal personality. Having its legal personality means it can sue or be sued in its own name separate from its members and directors and can also enter into contracts in its own right as a legal person. Its powers are only limited by it governing power called the Memorandum and Articles of Association. To be limited by guarantee means members guarantee or undertake to contribute a pre-determined sum specified in the governing document usually between £1 and £10, to the liabilities of the company which becomes due in the event of the charitable company being wound up.
Information on how to register either as a charitable association or convert into a charitable company can be found on cc21 - Charity Commission publication, and supporting charities - Charity Commission publication
Information on how to register a company can be found on the Companies House - information and guide page
Registration for charitable company limited by guarantee involves double registration with both the Charity Commission and the Companies House
Learning to Fly - useful quick to read tool for small organisations
Learning to Fly is a Governance Hub Publication (leaflet) that provides an introduction to the role of governance in a small organisation and also details useful resources for improving how your board functions.
To download the tool click here
Planning a Cycle of Meetings
Some new documents from Governance Pages to help plan your meetings
One of the best tips to make your committee effective is also the simplest; plan a year’s worth of meetings in advance - not just dates, but rough agendas as well. By looking ahead to cover likely agenda items you can make sure that you have the right number of meetings at the right times. Typical agenda items are agreeing the annual budget, planning for the AGM, reporting on grants, and planning an annual awayday for the committee. To download these new documents visit Governance Pages