Recent changes to the Charities Act 2005 (amended by the Charities Amendment Act 2023) requires all registered charities to review their ‘governance procedures’ at least every three years. The first three-year cycle ends in October 2026 – so this is quickly approaching! This article explains why regular governance reviews matter, not only for legal compliance but also for making sure an organisation’s structure reflects how it operates, and outlines the key documents charities should check, from founding rules and officer records to employment agreements, volunteer arrangements, board charters, and policies.
While this requirement is only for registered Charities, we think that any organisation, especially ones that handles funds, has volunteers or employees or is a party to contracts, should regularly review and keep up their rules and governance procedures up to date. This is important from a legislative and compliance perspective, but also to ensure the governance and structure of an organisation accurately reflects day-to-day operations.
Part of a thorough governance review is looking over records and documents and ensuring that changes and decisions are well-recorded and accurate.
So, what sort of record and document considerations might your Charity need to look over?
Amendments to your rules
- Have you amended your Charity’s founding document since it was created? If so, are there clear and accurate records of the rules that the Trust holds, and are the same uploaded to Companies Office and Charities Services (where needed)?
Officers
- Have you changed Officers since the Charity was created or more recently, if it was set up long ago? If so, are there clear and accurate records of who the Officers were/are, and when any changes in leadership occurred? Does the Trust hold these documents, and is Charities Services updated with the changes (where needed)? We can assist in clarifying what is needed with these steps.
Employees and volunteers
- Are your employment agreements up to date and reflective of current law?
- If you have volunteers, do you have any agreements and how to keep track of their voluntary service with your Charity?
Board charter
- Board charters are an excellent way of clearly and concisely setting out responsibilities, roles and procedures of a Charity. For example, you could set out your mission/purpose, the stakeholders or communities you engage with, and how meetings are run. If you don’t have a Board Charter, we recommend creating one. It doesn’t have to be complex or lengthy – just reflective of your organisation. If you do have a Board Charter already, consider revisiting it, and checking whether what is set out is accurate and reflects the organisation and the direction it is heading in.
Policies
- We recently released a series of these – find out more here.
We can Help
Parry Field lawyers are well-experienced in assisting organisations review, amend, and update their governance procedures and policies. Please reach out to our Impact Team if you would like to discuss how we can assist your organisation.
For more information about the requirement to review governance procedures under the 2020 Amendment to the Charities Act 2005 please see here.
