IPA Governance Team support Consultative Panel on the Governance of Charities

On the 10th May 2018, Minister Kyne launched the Report of the Consultative Panel on the Governance of Charitable Organisations which undertook extensive research and consultation on the issue since March 2017.

The Governance Team@ IPA provided research and drafting assistance to the Panel that met over a 12 month period and which deliberations were supplemented by a public consultation process (involving almost 1,200 individuals and organisations), international research and presentations.

Among its 10 proposals, the Panel found there was a need for a new code of governance for charities, and that the Charities Regulator should produce it. In particular, the panel proposed that the Governance Code should be principles-based and should operate on a ‘comply or explain’ basis by charities. While proposals could have gone further, notably in insisting that the new Code contains some mandatory requirements as many charitable organisations themselves suggested, this is nonetheless a major step towards the entrenchment of a good governance culture within the sector.

“This new code will play a significant role in improving the governance of Irish charities in the coming years.” said Mr Farrelly, CEO of the Charity Regulator, and the Charities Regulator would immediately begin work on the new code, and aimed to publish it before the end of the year. “For the first time there will be a code which will clearly set out what is expected from charity trustees,” he noted. “Good governance is the foundation stone of a well-managed charity. It needs to be proportionate to the size of the charity and the work that particular charities do. It is clear from our work to date that a one-size-fits-all approach will not work.”

The panel made the following proposals:

1. Rather than issuing additional regulations specific to governance, a more proportionate approach, as set out in this report, is the approval/issuing of governance guidelines or codes.

2. There should be a new Governance Code for charities issued by the Charities Regulator to facilitate the better administration, management and governance of charitable organisations.

3. The new Governance Code should be principles-based and should operate on a “comply or explain” basis.

4. The content of the new Governance Code should be developed in collaboration with the charity sector.

5. The new Governance Code should be proportionate.

6. The Charities Regulator should promote efforts to streamline compliance and reporting duplication between State bodies.

7. The Charities Regulator should develop and issue guidance (where possible online and/or in digital/video format) to support prospective and current charity trustees.

8. The term of office of charity trustees should not be subject to a mandatory limit. However, the new Governance Code should include an advisory maximum limit on a ‘comply or explain’ basis.

9. The Charities Regulator should consider in the context of the new code of governance the issue of former senior management becoming charity trustees of the same organisation.

10. Further research should be conducted on the profile and number of charity trustees in Ireland.

To access the full report, please click here.