Changes to the Charity Governance Code: Diversity
“We need to continue the journey from seeing diversity as a ‘hygiene factor’ to striving for diversity as a ‘success factor’. The Charity Governance Code helps trustees understand how they can do this.”
The Charity Governance Code is an excellent standard for good governance in charities. At the end of last year it was refreshed in response to a rigorous consultation with the charity sector, which threw up a need for enhancements to two of its six fundamental principles: Integrity and Diversity. The latter, now called Equality, Diversity and Inclusion (EDI), is particularly worthy of close attention.
Having been in and around charity boards for 15 years, I know how difficult it is for many to grasp this topic. Board members often self-assess on this matter with, “Our personal values align with this,” but personal values are not enough. And being welcoming is not enough.
This may be a contentious view but, for me, “diversity” is not about complying with the law, nor is it about being fair. It is about being practical and striving for every opportunity to improve performance.
Everyone is different, no one holds the truth, and no one meets our expectations or fits a job description perfectly. We all come with deficiencies and with unique perspectives and skills, which need to be heard, nurtured and valued to maximise organisational performance. Difference is what makes us.
For a deep dive into the relationship between strategy, diversity and governance, and how these combined factors generate impact for beneficiaries, you can read my paper here.
How to use the Code
The Code’s six fundamental principles support the overarching principle of Organisational purpose – the charitable purpose of the organisation. Within each principle, the Code outlines tangible examples of recommended practice, and this is the most helpful aspect of the model.
Seen as a whole, the Code is a “stretch target” for trustees. But it is intended to be a practical tool and accepts that trustees need to prioritise and tailor their activities accordingly.
Changes to the EDI Principle
Previously, the Diversity principle was relatively light on specifics, with a focus on protected characteristics that made it feel more like an issue of risk management. But the leap we all need to make is from seeing diversity as a “hygiene factor” to one of diversity as a “success factor”. The new EDI principle helps trustees do this.
The new rationale sets out the value of EDI clearly. Here are some phrases I think are particularly good:
- “Addressing equality, diversity and inclusion helps a board to make better decisions.”
- “Recognising and countering any imbalances in power… in the attitudes and behaviour of trustees, staff and volunteers, help to make sure that a charity achieves its aims.”
- “All trustees… must have equality of opportunity to contribute to decision making.”
- “Board diversity, in the widest sense, is important because it creates more balanced decision making.”
- “Boards that commit to equality, diversity and inclusion are more likely to set a positive example and tone for the charity.”
The greater detail given in the new Code clearly describes the recommended practice that will strengthen how trustees tackle EDI successfully. Some key points:
- There is a requirement to articulate how EDI relates to the purpose of the charity. This is important: It embeds EDI in the organisation’s strategy and demonstrates its value for beneficiaries.
- There is clarity around needing to plan, monitor and report regularly, seeking challenges, opportunities and new developments, and addressing gaps in understanding at all levels. Reporting needs to be transparent and external.
- Board diversity is central to the Principle. A board that lacks diversity cannot effectively lead diversity.
The easiest way to understand the EDI Principle in detail, so you know what it looks like in practice, is to review it on the Charity Governance Code website. However, it is worth recognising that, taken as a whole, the Charity Governance Code can feel quite daunting to absorb and put into practice. Remember, it is a “stretch target” and trustees will need to prioritise.
Another great way to get to grips with the Code is to use one of many online survey tools. These can facilitate understanding and help trustees see the wood for the trees, and agree on priority needs. Action Planning Partners with Digi-BoardTM to conduct governance health checks, and the tool makes reviewing against the Charity Governance Code easy, with fantastic insights.
Read more about Action Planning’s Governance Reviews with Digi-BoardTM here or contact us to discuss your governance goals.
Mike Taylor is an experienced consultant in governance and organisational development, who has held several leadership roles in UK charities. Prior to working in the third sector, he ran a successful management training company. He is a member of the Chartered Governance Institute, the Charity Law Association and a Fellow of Royal Society for Arts, Manufacturers & Commerce. For a deep dive into the relationship between strategy, diversity and governance, and how these combined factors generate impact for beneficiaries, you can read Mike's paper here.