What is in the Charity Governance Code and do we have to follow it?

England and Wales: This page sets out the position in full. Scotland: covered, and the answer is a different code — the Charity Governance Code does not apply, and Scotland has its own, on a voluntary basis; see below. Northern Ireland: covered, and again a different code — the Code of Good Governance, which CCNI’s own current trustee guidance names and recommends; see below.

Who wrote the Charity Governance Code, and who enforces it?

A cross-sector steering group wrote the Charity Governance Code. Nobody enforces it. The Charity Commission is listed only as an observer. This page is for trustees in England and Wales. Scotland and Northern Ireland have their own codes, covered in the last section.

Most boards do this once the policy set is in place and the risk register is built. An honest assessment draws on all of them. The policies are on conflicts, safeguarding, financial controls, reserves, data protection, complaints, whistleblowing and volunteers.

This is the point most likely to be misrepresented to you, usually by someone selling training. The Code answers it in terms. Page 3, verbatim:

“Compliance with the Code is not a regulatory requirement. It is the Charity Commission, and in some cases other regulators, and charity law, that tells charities about what they must do. The Code draws upon, but is fundamentally different to, the Charity Commission’s guidance.”

The Code is written by a cross-sector steering group. The Charity Commission is listed on it as an observer. Nobody can sanction you for not following it. No regulator will ask whether you have.

What the Commission does enforce, it enforces through statutory powers. Those are of a different order entirely. They are:

• opening an inquiry
• calling for documents
• issuing and publishing an official warning
• suspending or removing a trustee
• ordering that something be done or not done
• disqualification

Each has its own section of the Charities Act 2011 and its own trigger.

None of them mentions a code. They are set out in full in respond to a regulator query or inquiry.

None of this makes the Code worthless. It makes it a different kind of thing. It describes what good looks like, and it is written by people who run charities. You are free to depart from it with reasons.

This page does not restate what changed in the 2025 edition. The what changed in the 2025 Charity Governance Code explainer covers the restructure, the contested outcome total and the tenure guidance. Read it first if you have not. This page is about what a board does with the Code once it has one.

What does “apply or explain” mean?

It means meeting each principle, and explaining with reasons where you depart from a suggested practice. Explaining is not failing.

Apply or explain is the Code’s own mechanism. Its own description is short. Here it is, verbatim: “charities seek to meet the principles and outcomes of the Code and can either apply some of the proposed practices or explain what they do instead.”

Read that carefully. The principles and the outcomes are what you are aiming at. The practices underneath them are suggestions. Departing from a suggested practice with a recorded reason is using the Code correctly. It is not a second-best answer.

This matters most for small charities. Several of the suggested practices assume staff, budgets and committees that a volunteer-run charity does not have. The Code recognises this. Its website accepts that the processes “will not be applicable to all charities, especially smaller ones with few or no staff.”

So the answer is not to skip the principle. It is to meet it by a route your charity can run.

What a good “explain” looks like, in practice:

• It names the practice you are not doing. “We do not run an annual external board review.”
• It says what you do instead. “The chair holds a recorded conversation with each trustee once a year, and the board discusses the results in open session.”
• It gives the reason, and the reason is about your charity. “We have no staff and an income under the examination floor; the cost of an external review would come out of our grants budget.”
• It says when you will look again. “The board will revisit this if we take on our first employee.”

A bad one is a single sentence saying the principle is “not applicable to a charity of our size”. Size is a fact about you, not a reason. Every principle applies to every charity. Only the practices scale.

How to assess your board against the principles

Work through one principle at a time, outcome by outcome, and record for each whether you apply it, explain, or act. The Code is built from principles. Each has a set of outcomes: the “You know it’s working when” statements. Each then has three supporting layers:

• behaviours
• policy, processes and practice
• suggested evidence and assurance

Principle	Outcomes
Foundation principle	5
Organisational purpose	5
Leadership	5
Ethics and culture	5
Decision making	6
Managing resources and risks	5
Equity, diversity and inclusion	4
Board effectiveness	5

Work from that table, not from a headline total. The Code’s own publisher gives two different totals for the outcomes. The website says 41.

Counting the lists in the published document gives 40. We are not picking a side. The per-principle outcomes in the table are what a board works through. They are not in dispute.

A method that works, and does not eat an away-day:

1. Take one principle per board meeting. A year of quarterly meetings plus a few extra sessions covers the set. A principle a meeting gives a better assessment than a single away-day. The board has time to check things in between.
2. Go outcome by outcome, not practice by practice. For each outcome, the question is whether it is true of you, with evidence. The practices come in only where the answer is no.
3. Record three columns: apply, explain, or act. “Apply” needs the evidence named. “Explain” needs the four things a good explanation contains. “Act” is the only column that generates work.
4. Minute the conclusion and date the review. A board that cannot say when it last looked at the Code has not used it.
5. Do not ask which version applies to your size. The question no longer has an answer. On the Code’s own website, the number of versions is now 1, not two, and proportionality has moved inside each principle.

What to say about the Code in the annual report

Describe how you use the Code, briefly, and never claim full compliance. The Code encourages adopters to publish a short statement in the trustees’ annual report explaining their use of it. That report is filed with the accounts (see file your accounts). Its own words: “This does not need to be a long list of policies or procedures — a short statement is fine.”

Two things to get right. First, that statement is encouraged by the steering group, not required by the accounts regulations. Do not file it with your statutory disclosures as though it were one of them. And do not let an adviser tell you it is late.

Second, do not write that the charity “complies with the Charity Governance Code”. Apply-or-explain does not require full compliance. A bare compliance claim cannot be checked, and it misreads the mechanism. Describe how you use the Code, including where you do something different. That is what the Code asks for.

Scotland and Northern Ireland: their own governance codes

The Charity Governance Code is an England and Wales code. Presenting it as UK-wide is a common error. A Scottish or Northern Ireland charity is not failing anything by never having assessed against it.

Scotland. Scotland’s Third Sector Governance Forum publishes the Scottish Governance Code for the Third Sector. It has 5 core principles: Organisational Purpose, Leadership, Board behaviour, Control, and Effectiveness. It is voluntary. The Code’s own site describes it as a best-practice tool for continuous improvement, not a legal or regulatory requirement.

OSCR links to it under its good-governance guidance and lists it as a useful tool. The link carries a standard disclaimer that OSCR cannot accept responsibility for third parties’ guidance. That is a reference, not an endorsement. Its scope is also wider than charity. It is written for third sector organisations in Scotland generally, not only registered charities.

Northern Ireland. The Developing Governance Group publishes the Code of Good Governance. The group is a partnership including Volunteer Now, NICVA and CCNI itself. The Code has 5 principles. It is voluntary and is not framed as apply-or-explain. It is deliberately broad, so that organisations of any size or type can use it as a tool to support continuous improvement.

CCNI’s own current trustee guidance names it directly under support and resources. It points trustees to the DIY Committee Guide as the way to put it into practice. That is a stronger regulator reference than Scotland’s disclaimed external link. It is still not a statement that the Code is required.

If you operate in more than one nation, assess against the code of the nation you are registered in. Say in the annual report which one you used. Say a board picks the England and Wales Code because it turns up in search results. It has done real work against the wrong document.

Common mistake: assessing against the seven-principle Code

The 2025 revision restructured the Code rather than renumbering it. Most sector content still describes the old version. The foundation principle is now numbered. “Integrity” has become “Ethics and culture”. Decision-making has split in two. And “openness and accountability” has gone as a standalone principle. An assessment built on the old structure maps onto nothing.

The action list it produces is anchored to principles that no longer exist.

Common mistake: asking which version applies to a charity of your size

The 2020 Code came in a smaller-charity version and a larger-charity version. The Code’s website now gives the number of versions as 1, with proportionality handled inside each principle instead. The question no longer has an answer. That is itself the answer. It saves a board the argument about which side of a line it sits on.

Common mistake: presenting the Code as a Commission requirement

The Commission’s logo appears on the Code. People reasonably read that as authorship. It is there as an observer. The Code says in terms that compliance with it is not a regulatory requirement. Nothing in it tells you what you must do.

Worked example

Saltmarsh Trust is a mid-sized charitable company with a trading subsidiary. It wants to state in its annual report that it complies with the Code.

Its board works through the principles. It finds that it applies most of the suggested practices, but not two of them. It has never had a board review led by someone from outside. Its trustee recruitment has always gone through existing contacts. On a compliance test, that is two failures and an awkward sentence.

On apply-or-explain it is neither. The board records what it does instead: an internal review led by the chair, with the subsidiary’s non-executive director sitting in. It agrees to run an open recruitment round for the next two vacancies.

The annual report then says that the trust uses the Code. It names those two departures and the reasons. And it says when the trust will look again. That is a correct use of the Code. “We comply with the Charity Governance Code” would not have been.

With the assessment done, the next step is to run your first trustee skills audit and recruit to the gaps. The Code’s board-composition outcomes usually show where the gaps are.