A Code of Practice for Good Governance of Community, Voluntary and Charitable Organisations in Ireland www.governancecode.ie This document contains the full Code and related documents for the three different types of organisations FINAL version: 20th March 2012 Developed by Boardmatch Ireland Business in the Community Ireland Carmichael Centre for Voluntary Groups Clann Credo – the social investment fund The Disability Federation of Ireland ICTR Volunteer Ireland The Wheel In association with The Corporate Governance Association of Ireland Arthur Cox, Solicitors Sheila Cahill Consulting Governance Code: All 3 Organisation Types - 1 Contents 1. Introduction Page 3 1.1 Why should my organisation adopt a Page 4 Governance Code Page 5 1.2 What are the principles of this Code? Page 5 1.3 Comply or Explain? Page 6 1.4 Who had a say in developing this Code? 1.5 Adoption of and Compliance with the Code Page 7 1.6 Who are The Working Group? Page 8 1.7 Acknowledgements Page 9 2. How to use this Code Page 12 3. The Code: Principles of Good Governance Page 15 4. The Code: Organisational Types Page 17 5. The Code: Implementation Guidelines and Actions Page 20 6. Explanation of Terms Page 62 7. About the Organisations Involved Page 73 Governance Code: All 3 Organisation Types - 2 1. Introduction Welcome to your Governance Code: a Code of Practice for Good Governance of Community, Voluntary and Charitable (CVC) organisations in Ireland. All CVC organisations have a responsibility to provide and follow a code of good practice when it comes to how their organisations are run. It is the responsibility of the people who run the organisation – usually called the board or management committee - to make sure this happens. Up to now, there have been no clear guidelines to help people on the boards of CVC organisations to run their organisations and well run CVC organisations have not had access to a tool which allows them to demonstrate their high standards of governance to their stakeholders. In addition, in the past some organisations have failed through being run poorly and this can shatter public confidence and trust. This is why we have joined forces to put in place a Governance Code - which has been created for the sector by the sector. ‘Governance’ refers to how an organisation is run, directed and controlled. Good governance means an organisation will design and put in place policies and procedures that will make sure the organisation runs effectively. But good governance is not about rules. It is an attitude of mind. It is about the ethical culture of the organisation and the behaviour of the people on the governing body. This Governance Code aims to make sure that CVC organisations meet their responsibilities and run their organisations efficiently and effectively. The Governance Code clearly outlines the roles, duties and responsibilities of all those who sit on boards and management committees of CVC organisations. It provides, for the first time, a set of guiding principles for Governance Code: All 3 Organisation Types - 3 governance as well as clear actions that allow those principles to become real within an organisation. In effect, it provides a ‘job description’ for people who sit on boards and management committees. Implementation of this Code will help CVC organisations to perform to the highest standards possible and give confidence to all those involved with them. The intention is for the Governance Code to:  Become the standard definition of good practice in governance for the CVC Sector in Ireland and;  Inform the standards that will be required by both funders and Regulators. For this to happen, we, as groups and organisations need to adopt it and follow it in large numbers. This Governance Code can also apply to sports and arts group, clubs and associations and any non-profit organisation. It is important to note that the Governance Code is not a management guide. That means you will need to refer to other resources for various aspects of management practice. The www.governancecode.ie website provides links to resources that will help. 1.1 Why should my organisation adopt the Governance Code? Your organisation should adopt this new Governance Code because it is the right thing to do. In doing so your organisation will benefit in many ways. The fact that you adopt the Code will:  Reassure current funders that their money is being managed by a well run organisation with good governance; Governance Code: All 3 Organisation Types - 4  Increase transparency – in that everyone knows exactly how the organisation is being run;  Help you avoid bad risks;  Help you achieve your goals faster, and;  Reduce costs. Widespread adoption of the Code across the CVC Sector will help everyone involved – including the public and the beneficiaries of these organisations – but also the sector itself will benefit. 1.2 What are the principles of the Code? The Governance Code is based on five main principles, each with three sub-principles. For each principle there are recommended guidelines and actions on how to put that principle in place for your organisation. Having taken the actions, you will then know that you are adopting that particular principle. The Code has been designed in such a way to make it proportionate and user-friendly for all organisations in the sector no matter what their size or stage of development. This is done through defining three categories of organisations in terms of how governance is done in their organisations. Whilst the five principles remain the same across the three categories, the actions will be different. You are invited to pick from three organisational types to find the set of actions most suitable to your organisation. 1.3 Comply or Explain? The Governance Code is principles-based, rather than rule-based, and it is voluntary. Governance Code: All 3 Organisation Types - 5 It is expected that groups and organisations will compare themselves to the standards outlined in the Code on a ‘comply or explain’ basis. This means that you measure your organisation against the principle in question, specifically against each of the actions for that principle. (There is a checklist supplied to make it easier for you to do this). After this you make any changes needed to bring your organisation in line. Having done that, you are now entitled to say that your organisation complies with the Governance Code for community, voluntary and charitable organisations. You should communicate this fact on your website, in your newsletter and so on. If, however, there are reasons why you can’t make changes to suit all the suggested actions, you can still adopt the Code. This is only possible if you communicate which actions you do not follow and why, in the same area as you communicate that you adopt the Governance Code. Publishing the explanation means that you are complying with the Code. In summary, ‘comply or explain’ means that organisations should make it publicly known how they have complied with the Code and explain where they have not. 1.4 Who had a say in Developing this Code? Between Autumn 2009 and Spring 2011, a Working Group (see section 7) worked on the development of the Code. They invited feedback on the concept and on the first draft from:  Sample community, voluntary and charitable groups of all sizes;  Private funders;  Regulators;  Statutory authorities and funders, and;  Other stakeholders. Governance Code: All 3 Organisation Types - 6 All contributors commented that a Governance Code would be very helpful for the Community, Voluntary and Charitable Sector. A complete draft of the Code was then developed and published publicly for a full public consultation. This phase began in May 2011 and finished at end July 2011. It involved:  Information and consultation events around the country;  Webinars;  Surveys, and;  Written feedback (submissions and comments sent by email). During the second half of 2011 the Working Group took on board the feedback from the public consultation and finalised the Governance Code. It was published in February 2012, along with a range of checklists and resources to help organisations comply. 1.5 Adoption of and Compliance with the Code The Code of Governance was published in March 2012 on www.governancecode.ie. Organisations in the Community, Voluntary and Charitable Sector are now asked to schedule time to adopt the Code and work towards complying with the implementation actions that underpin each principle. The Working Group invites all organisations who decide that they want to adopt the Governance Code to contact us at info@governancecode.ie. We will maintain a publicly available list of the organisations that are ‘on the code-adoption journey’. When such organisations have made a board/committee decision that their organisation now actually complies with the Code, the Working Group asks that a copy of one-page principles sheet, signed by the relevant board members, is also sent to us. We will then add their name to the publicly available register of organisations which comply with the Governance Code: All 3 Organisation Types - 7 Code. Any non-profit organisation is welcome to adopt the Code and tell us about it. As organisations get used to using the Governance Code they will learn things that other organisations can benefit from. We ask them to tell us these tips so that we can tell others. Send your tips to info@governancecode.ie. We hope that by using the website as a central point, people can access new resources and tips which will help make it easier for them to use the Code. This Code is not a management guide. That means you will need to refer to other resources for various aspects of management practice. The www.governancecode.ie website provides links to resources that might help. 1.6 Who Are The Working Group? The following organisations from the Community, Voluntary and Charitable Sector were active members of the Working Group:  Boardmatch Ireland  Business in the Community Ireland  Carmichael Centre for Voluntary Groups  Clann Credo  Disability Federation of Ireland  ICTR  Volunteer Ireland  The Wheel. These organisations all have an expertise, interest and track record of supporting organisations in the community, voluntary and charity sector to improve their governance practice. The Corporate Governance Association of Ireland (CGAI), Arthur Cox (Solicitor) and Sheila Cahill Consulting worked with these organisations as part of the Working Group to develop this Code. Governance Code: All 3 Organisation Types - 8 More information on all of the members of the Working Group can be found in Section 7. The organisations in the Working Group worked together and met every month from Autumn 2009 through to end 2011. Sub-groups were formed to deal with specific aspects of the work between meetings. The project was not funded and the members of the working group gave their time and commitment on a voluntary basis in the belief that the outcome would be beneficial for all. The organisations involved in the Working Group share the responsibility for guarding the standards in this Code. They have a written agreement on this. They have committed to reviewing the Code within three years in light of the experience organisations have in adopting it. 1.7 Acknowledgements In 2009 Dóchas and the Corporate Governance Association of Ireland (CGAI) published a ‘Code of Good Governance for Development NGOs’. (NGO stands for non-governmental organisation.) The Wheel’s view was that a similar Code could be very useful for the broader Community, Voluntary and Charitable Sector in Ireland. The Corporate Governance Association of Ireland supported this idea. There followed consultation with members by The Wheel and also by Carmichael Centre for Voluntary Groups respectively, about the interest in adapting the ‘Dóchas /CGAI Code’ for the broader CVC Sector. After a positive response, a coalition of eleven organisations was invited to form the Working Group to progress developing a Governance Code for the CVC Sector. Governance Code: All 3 Organisation Types - 9 Early on in the process the Working Group decided to take a different approach to that followed in the Dóchas/CGAI Code. This was based on their study of:  Materials produced in the UK from a review of the Governance Code for the Voluntary Sector. The UK Code (which was very similar to the Dóchas/CGAI Code for Development NGOs here in Ireland) had been used in the UK for over five years;  The Report on Proportionate Governance for Voluntary Groups in the UK, produced by Mike Hudson, Director of Compass Partnership (www.compasspartnership.co.uk), and;  Materials produced by Sheila Cahill and The Carmichael Centre’s training and support service on standards of governance for small community, voluntary and charitable organisations. The Working Group would like to thank all of the above for sharing their work. The CGAI team involved in the development of this Code were:  Alan McDonnell (Chairman)  Jim Corbett  Dermod Dwyer  Conall Lavery  Liam Marnane  Tom Quinn. The Working Group would also like to thank all the groups and individuals in each of their organisations who have contributed. In particular, we thank Sheila Cahill for her work on producing the early text for the Code and its suggested actions. We also thank Femi Atoyebi who has worked with The Wheel, supporting the Working Group and the project - initially as a volunteer for several months. Governance Code: All 3 Organisation Types - 10 The National Adult Literacy Agency (NALA) kindly provided an initial edit of the Governance Code using plain English guidelines. This was to help users better understand and use it. For more information on all plain English guidelines go to NALA’s plain English website: www.simplyput.ie The Wheel supported and managed the project, including the development of the website www.governancecode.ie. It will continue to provide an administrative home for the Code and the Working Group. Governance Code: All 3 Organisation Types - 11 2. How to Use this Code Once your organisation has made a decision to adopt, and ultimately comply with this Code, there is a clear set of steps, outlined below, to follow. The Working Group invites all organisations which decide that they wish to adopt the Governance Code and work towards compliance with it to contact us at info@governancecode.ie. We will maintain a publicly available list of the organisations that are ‘on the code-adoption journey’ to act as an incentive and inspiration to others. Step 1 Read the Code. It is in three parts: 1. The five principles underpinning the standard and their sub- principles; 2. The definitions of the different organisational types; 3. The list of implementation actions for each of the principles and sub- principles for a particular organisational type. We have also included an ‘Explanation of Terms’ to explain specialist words and roles in this Code. Step 2 Identify your Organisational Type from the three categories provided. Step 3  Read the guidelines and actions for your own Organisational Type.  Fill in the appropriate checklist for your Organisational type. (You can download the checklists from the website homepage).  Identify the actions you think you need to take to comply with each principle. Governance Code: All 3 Organisation Types - 12  Rank the actions and do them in a timeframe that is reasonable for your organisation. (We are aware that completion of the identified actions and thus, compliance with the Code may take several months or sometimes even longer, depending on the level of change required in the organisation.) If your board believes that the organisation then complies with the Governance Code, and has made a decision about this that is minuted at a board meeting, then proceed to Step 4. Step 4  Sign the one-page ‘Governance Code Principles Statement’ and display publicly, e.g. office wall, on website.  State in your public materials: “We confirm that our organisation complies with The Governance Code for the Community, Voluntary and Charitable Sector in Ireland”. (Please do not use the logo or any graphics from www.governancecode.ie).  If you have chosen not to implement certain implementation actions but still believe that you comply with the Code, explain in the same place, as the public statement, which actions you are not doing and why you are not doing them. Providing the explanation means you comply with the overall Code. Step 5 Email a copy of the signed one-page ‘Governance Code Principles Statement’ to info@governancecode.ie along with the date when the board made the decision that the organisation is compliant with the Code. When we get this information, the Working Group will add your organisation’s name to the publicly available Register of Compliance with the Code, available on www.governancecode.ie (note that every organisation’s name will only remain on the Register of Compliance for 13 months because an annual recommitment to the Code is one of the actions required to live up to its principles.) Governance Code: All 3 Organisation Types - 13 Step 6 Conduct a review of the organisation’s compliance with the Code within a year. Ensure that this review is done by, or approved by the board. Then contact info@governancecode.ie to tell us of the board’s renewed decision about the organisation’s compliance with the Code so that your organisation’s name can remain on the Register of Compliance. Repeat this ‘step 6’ annually. Governance Code: All 3 Organisation Types - 14 3. The Code: Principles of Good Governance We, ______________________ (the governing body), of _______________________ (name of organisation) commit to: Principle 1. Leading our organisation. We do this by: 1.1 Agreeing our vision, purpose and values and making sure that they remain relevant; 1.2 Developing, resourcing, monitoring and evaluating a plan to make sure that our organisation achieves its stated purpose; 1.3 Managing, supporting and holding to account staff, volunteers and all who act on behalf of the organisation. Principle 2. Exercising control over our organisation. We do this by: 2.1 Identifying and complying with all relevant legal and regulatory requirements; 2.2 Making sure there are appropriate internal financial and management controls; 2.3 Identifying major risks for our organisation and deciding ways of managing the risks. Principle 3. Being transparent and accountable. We do this by: 3.1 Identifying those who have a legitimate interest in the work of our organisation (stakeholders) and making sure there is regular and effective communication with them about our organisation; 3.2 Responding to stakeholders’ questions or views about the work of our organisation and how we run it; Governance Code: All 3 Organisation Types - 15 3.3 Encouraging and enabling the engagement of those who benefit from our organisation in the planning and decision-making of the organisation. Principle 4. Working effectively. We do this by: 4.1 Making sure that our governing body, individual board members, committees, staff and volunteers understand their:  role,  legal duties, and  delegated responsibility for decision-making; 4.2 Making sure that as a board we exercise our collective responsibility through board meetings that are efficient and effective; 4.3 Making sure that there is suitable board recruitment, development and retirement processes in place. Principle 5. Behaving with integrity. We do this by: 5.1 Being honest, fair and independent; 5.2 Understanding, declaring and managing conflicts of interest and conflicts of loyalties; 5.3 Protecting and promoting our organisation’s reputation. We confirm that our organisation is committed to the standards outlined in these principles. We commit to reviewing our organisational practice against the recommended actions for each principle every year. _______________________ _________________________ Chairperson of Board Secretary of the Board [Date] [Date] Governance Code: All 3 Organisation Types - 16 4. The Code: Organisational Types The Code caters for three types of organisations. All organisations should be able to find the type which is most appropriate to them. 1. Type A organisations 2. Type B organisations 3. Type C organisations Below is a description of each of these three types of organisations. You have to decide which description best matches your organisation. Follow the guideline actions for the type of organisation you believe you are. If you feel that none of these definitions describes your organisation, choose the type that comes the closest and follow the guidelines for that particular type. 1. Type A organisations These groups are run by volunteers and do not employ staff. The members of the board are therefore responsible for:  Overseeing the work of the organisation (governance);  Organising the daily work (management), and;  Carrying out the work of the organisation (operations). Many such groups operate on less than €10,000 a year although some may have a larger income. They may or may not have a CHY number. Type A groups are usually not incorporated but some may be required to do so by funders. All-volunteer groups that are ‘limited companies’ should strive to meet the governance requirements of ‘Type B’ organisations (except those actions relating to staff, which clearly do not apply). Some examples of Type A organisations include: Governance Code: All 3 Organisation Types - 17  A local community group which organises visits to older people living alone in rural areas;  A bowling club run by volunteers which maintains the bowling league for the area and organises two special events per year;  An after-schools / homework club for children from the local school. 2. Type B organisations These organisations usually employ a small number of staff and many may have a single member of staff. While the most senior (or only) member of staff may have a title such as manager, coordinator or administrator, the people who sit on the board will still have some management and operations responsibilities as well as their governance/oversight role. Annual income may vary considerably from one organisation to the next in this category and many organisations may receive grants from statutory bodies and/or trusts and foundations. A ‘Type B’ organisation tends to be incorporated, and may have a CHY number. Some examples of Type B organisations include:  A support group for people with a specific medical condition that employs an administrator to respond to information requests, produce a newsletter and maintain the accounts;  A local community centre that employs a coordinator and a number of part-time staff. The coordinator supervises the work of the staff and brings management decisions to the board. Any organisation in this category entering into service level agreements with Government departments or statutory agencies should aim to meet the governance requirements and actions of ‘Type C organisations’. Governance Code: All 3 Organisation Types - 18 3. Type C organisations The main characteristics of these organisations are that the people who sit on the board focus solely on their governance/oversight role, delegating management and operational duties to the staff. There is a clear division between the governance role of the board and the management role of staff. These organisations tend to employ more than 10 members of staff and may often have hundreds of staff that in turn, may require a structure based on functional or geographic departments. It is most likely that ‘Type C’ organisations will be incorporated and may have a CHY number, but this is not always the case. Some examples of Type C organisations include:  A national organisation working with homeless people that employs a CEO, a senior management team and over 100 front- line staff delivering a range of services;  An umbrella group of service providing organisations that employs a CEO with several staff reporting to him/her. Although a small organisation in terms of size, the CEO takes a high level of management responsibility in line with the organisation’s strategic plan leaving the board members to focus on governance/oversight. Governance Code: All 3 Organisation Types - 19 5. The Code: Implementation Guidelines and Actions We hope that these guidelines will help your organisation act in line with the principles of good governance. Before you start, remember to inform us at info@governancecode.ie that you are now embarking ‘on the journey’ towards adoption of, and compliance with, the Code, so that we can add this information to the publicly available information we provide. Next steps:  Read through the actions for your Organisational Type.  Assess your organisation’s performance on the actions using the Checklist provided on the website.  Rank the actions that remain to be done in order of priority assigning responsibility and a deadline in each case.  Work through the outstanding actions until all actions have been done. Remember, that it may take many months for all of the outstanding actions to be completed, so do not get disheartened by this. After this, your organisation can state that it complies with The Governance Code for the Community, Voluntary and Charitable Sector in Ireland. This should be communicated on all public materials. A typical place for this type of public information would be on your website and/or in your annual report/accounts and/or in the reception area of your office. Remember to email a copy of the signed one-page ‘Governance Code Principles Statement’ to info@governancecode.ie along with the date when the board made the decision that the organisation is compliant with the Code. When we get this information, the Working Group will add your Governance Code: All 3 Organisation Types - 20 organisation’s name to the publicly available Register of Compliance with the Code, available on www.governancecode.ie. Note that this statement is only valid for one year. In adopting the Governance Code, organisations are making a commitment to review their compliance with it every year. If you cannot implement certain implementation actions it is still possible to comply with the Code. You will need to explain, wherever you make your public statement of compliance, which actions are not being done and why you are not doing them. The act of providing the explanation means you comply with the overall Code. How often should a review be done? Every year your organisation has to check to see that it is following the Governance Code. At this time you should also check that your organisational type is still the same. If it has changed follow the guidelines for this new organisational type. Your organisation should make a board decision annually about compliance with the Code. Once made, this decision should be communicated to the Working Group at info@governancecode.ie so that we can maintain your organisation’s name on the publicly available Register of Compliance on www.governancecode.ie Notes To make it easier to read the implementation actions, we have used the words ‘board’ and ‘board member’ instead of ‘governing body’ and ‘member of the governing board’. If your organisation is not a company limited by guarantee it will not have board members. In this case, the words will refer to the governing body, committee core group or relevant structure. The actions stay the same. Governance Code: All 3 Organisation Types - 21 Actions that do not apply for particular organisations are shaded grey in the following grids. Governance Code: All 3 Organisation Types - 22 Principle 1. Leading Type A Type B Type C our organisation. 1.1 Agreeing our 1.1 (a) 1.1 (a) 1.1 (a) vision, purpose and Agree the purpose of your Develop and agree a Agree a strategic plan for values and making group. written statement organisation. The plan should sure that they outlining the include clear statements of its remain relevant. Discuss how the group organisation’s purpose, vision, purpose, mission, values, wants to achieve its mission and values. aims and objectives. purpose and how it wants to work. 1.1 (b) 1.1 (b) 1.1 (b) Make sure 1.1(a) is in line Make sure 1.1(a) is Make sure 1.1(a) is reflected in with the written reflected in the governing the governing document of the constitution. document of the organisation (for example, organisation (for memorandum and articles of example, memorandum association, deed or trust and and articles of association constitution). or deed of trust and constitution). 1.1 (c) 1.1 (c) 1.1 (c) Review at least every three Review at least every Review at least every three years to make sure that three years to make sure years to make sure that the the organisation is still the organisation is still organisation is still relevant. relevant. relevant. Governance Code: All 3 Organisation Types - 23 Principle. Type A Type B Type C 1.1 continued 1.1 (d) 1.1 (d) 1.1 (d) Develop and agree written Work with staff to develop Review and agree written policy policies where necessary. and agree written policy statements, where necessary, at Review at least every three statements where least every three years. necessary. years. Review at least every three years. Governance Code: All 3 Organisation Types - 24 Principle. Type A Type B Type C 1.2 Developing, 1.2 (a) 1.2 (a) 1.2 (a) resourcing, Agree and write down a Work with staff to develop Agree a strategic plan for the monitoring and yearly work plan. This and agree a yearly work organisation that includes: evaluating a plan to plan should have: plan that sets out: make sure that our  operational plans; organisation  most important  aims;  budget; achieves its stated actions;  objectives; purpose.  key performance  timelines to achieve  timelines; indicators, and; these actions;  targets;  timelines.  the breakdown of the budget, and;  a budget, and;  a description of how  funding plan. the money will be raised. 1.2 (b) 1.2 (b) 1.2 (b) Agree who is going to take Agree board and staff Agree role of board in making responsibility for the roles around: sure that there are enough actions to carry out the resources to implement the  fundraising activities; plan. strategic plan.  funding applications, and;  contact with funders. Governance Code: All 3 Organisation Types - 25 Principle. Type A Type B Type C 1.2 continued 1.2 (c) 1.2 (c) 1.2 (c) Review the plan once a Make sure there is a Make sure there is a monitoring year. monitoring and evaluation and evaluation system in place. system in place. Have a discussion about what went well and what could be improved before agreeing a new work plan. 1.2 (d) 1.2 (d) 1.2 (d) Not a requirement for this Ask manager to report Receive report from CEO on category. progress compared with progress compared with agreed objectives to board on a key performance indicators. regular basis. 1.2 (e) Not a requirement 1.2 (e) Not a requirement 1.2 (e) for this category. for this category. Make sure the discussion of strategic issues is a regular item on the board agenda. Governance Code: All 3 Organisation Types - 26 Principle. Type A Type B Type C 1.3 Managing, 1.3 (a) 1.2 (a) 1.3(a) supporting and Set realistic goals. Make sure contracts and Give responsibility for the holding to account employment policies are implementation of board- staff, volunteers Divide up the work and in place and that they approved human resource and all who act on review progress of agreed cover: policies and employment behalf of the actions at the next contracts to Chief Executive organisation. meeting.  recruitment; Officer (CEO).  induction;  supervision;  appraisals;  grievance; and,  disciplinary procedures. 1.3 (b) 1.3 (b) 1.3 (b) Chair makes sure that Make sure: Make sure: individual board members  formal arrangements  formal arrangements are set report to the board on are set up for the up for the ongoing work that they carry out ongoing supervision supervision and development for the organisation. and development of of staff; and, staff, and,  formal arrangements are set  staff appraisals are up for the supervision and carried out at least development of the CEO. This once a year. should include a yearly or twice-yearly appraisal. Governance Code: All 3 Organisation Types - 27 Principle. Type A Type B Type C 1.3 continued 1.3 (c) 1.3 (c) 1.3 (c) Where volunteers are If involving volunteers, Give responsibility for developing involved outside the board put a volunteer policy in the volunteer policy to the CEO. make sure their role and place. This policy should who they have to answer cover: to is clear.  recruitment;  induction;  support;  supervision, and;  what happens if problems arise. 1.3 (d) 1.3 (d) 1.3 (d) Not a requirement for this Make sure staff have up Delegate responsibility for job category. to date job descriptions. descriptions and staff supervision to CEO. 1.3 (e) 1.3 (e) 1.3 (e) Not a requirement for this Not a requirement for this  Agree job description of CEO; category. category.  Set yearly performance expectations of CEO;  Agree ways for CEO to report to the board. Governance Code: All 3 Organisation Types - 28 Principle 2. Type A Type B Type C Exercising control over our organisation. 2.1 Identifying and 2.1 (a) 2.1 (a) 2.1 (a) complying with all Decide if the group’s Decide if the Agree policies, procedures and relevant legal and current legal form is organisation’s current reporting mechanisms to make regulatory appropriate. For example, legal form is appropriate. sure there is compliance with all requirements. is your group: relevant legal and regulatory For example, is your requirements.  an unincorporated group, association;  an unincorporated  a company limited association; by guarantee;  a company limited  a trust, or; by guarantee;  a friendly society.  a trust, or; Comply with the relevant  a friendly society. requirements. Comply with the relevant If you decide to become a requirements. company limited by guarantee, you should follow the Implementation Guidelines for Type B Organisations. Governance Code: All 3 Organisation Types - 29 Principle. Type A Type B Type C 2.1 continued 2.1 (b) 2.1 (b) 2.1 (b) If the group is not a If the organisation is a company If the organisation is a company limited by limited by guarantee, appoint a company limited by guarantee, guarantee, make sure board member to act as appoint a board member to act that someone is Company Secretary. as Company Secretary. appointed (usually A non-board member, and possibly A non board member, including a called a Secretary) to a member of staff, but ideally not member of staff, but not the keep track of the the Manager, may be considered Manager, may be considered for group’s records, for the Company Secretary role. the Company Secretary role. This meeting minutes, This is because one of the two main is because one of the two main membership and so roles of the Company Secretary isroles of the Company Secretary is on. to act as one of the ‘custodians of to act as one of the ‘custodians of governance’ within the governance’ within the organisation. If the Manager is the organisation. If the Manager is the Company Secretary then one of theCompany Secretary then one of necessary checks and balances the necessary checks and which ensure best practice in balances which ensure best governance is removed. practice in governance is A member of staff may assist the removed. Company Secretary in carrying A member of staff may assist out duties. However, the the Company Secretary in Company Secretary is carrying out duties. However, responsible for making sure that the Company Secretary is the duties associated with the responsible for making sure role are carried out. that the duties associated with the role are carried out. See Guidance Note on this point (available on website). See Guidance Note on this point (available on website). Governance Code: All 3 Organisation Types - 30 Principle. Type A Type B Type C 2.1 continued 2.1 (c) 2.1 (c) 2.1 (c) Decide if the group If the organisation is a Receive reports on legal and should have a charity charity, make sure charity regulatory compliance. number. registration is in place and Make sure that any issues that that regulatory requirements If yes, register with the have been identified are dealt are being met. Revenue with. Commissioners and comply with the relevant requirements. 2.1 (d) 2.1 (d) 2.1 (d) Consider the health Make sure there is a Safety Make sure there is a Safety and safety aspects of Statement. This should also Statement. This should also activities. identify the person identify the person responsible responsible for health and for health and safety in the Put a plan in place to deal with any safety in the organisation. organisation. problems. Ask this person to report on Receive reports on any health health and safety matters and safety matters that arise. that arise. Governance Code: All 3 Organisation Types - 31 Principle. Type A Type B Type C 2.1 continued 2.1 (e) 2.1 (e) 2.1 (e) Be aware of the nine Make sure policies regarding: Make sure policies regarding: grounds of  employment;  employment; discrimination.  equality and;  equality and; Make sure activities are as accessible as  data protection  data protection possible. are in place. are in place. 2.1 (f) 2.1 (f) 2.1 (f)  Keep contact  Keep contact details of  Keep contact details of details of beneficiaries with their beneficiaries with their beneficiaries with permission in a safe permission in a safe place. their permission place.  Do not give their details to in a safe place.  Do not give their someone outside the  Do not give their details to someone organisation. details to outside the  Do not keep unnecessary someone outside organisation. personal information. the group.  Do not keep  Make sure you comply with  Do not keep unnecessary personal data protection legislation. unnecessary information. personal  Make sure you comply information. with data protection  Make sure you legislation. comply with data protection legislation. Governance Code: All 3 Organisation Types - 32 Principle. Type A Type B Type C 2.1 continued 2.1 (g) 2.1 (g) 2.1 (g) Comply with other law Make sure other policies are Make sure other policies are in that applies to activities in place to comply with other place to comply with other of group (for example, relevant law (for example, relevant law (for example, child child protection or food child protection or food protection or food safety). safety). safety). 2.1 (h) 2.1 (h) 2.1 (h) Make sure that you Make sure that you comply Make sure that you comply with comply with the terms with the terms and conditions the terms and conditions of and conditions of public of public or private grants public or private grants received, or private grants received, including including governance received, including governance requirements. requirements. governance requirements. Governance Code: All 3 Organisation Types - 33 Principle. Type A Type B Type C 2.2 Making sure 2.2 (a) 2.2 (a) 2.2 (a) there are Monitor income and Monitor income and Oversee income, expenditure, appropriate internal expenditure against the expenditure against cash-flow and investments. financial and budget on a regular basis. budget and cash-flow management each quarter or more controls. often. 2.2 (b) 2.2 (b) 2.2 (b) Draw up a yearly report of Produce yearly accounts Sign off on yearly audited income and expenditure. (audited or independently accounts. examined as appropriate). Sign off on these. 2.2(c) 2.2(c) 2.2(c) Agree and put in place Agree and put in place Agree and put in place appropriate financial appropriate financial appropriate financial management procedures. management procedures, management procedures, systems and controls. systems and controls. 2.2 (d) 2.2 (d) 2.2 (d) Not a requirement for this Agree spending limits for Agree level of financial authority category. the manager. given to CEO, finance sub- committee and senior staff. Governance Code: All 3 Organisation Types - 34 Principle. Type A Type B Type C 2.2 continued 2.2 (e) 2.2 (e) 2.2 (e) Not a requirement for Not a requirement for this Appoint an audit committee of this category. category. three or more directors. The chair of the organisation’s board can be an audit committee member but cannot chair the audit committee. At least one of this committee should have recent and relevant financial experience. Have written terms of reference that describe the role of the committee and its responsibilities. The terms of reference should be available on your website. Include specific terms of reference for: Monitoring and review:  of the accuracy of the financial statements of the organisation;  announcements about the organisation’s financial performance and financial controls; Governance Code: All 3 Organisation Types - 35 Principle. Type A Type B Type C 2.2(e) continued  control and risk management systems;  the effectiveness of the organisation’s internal audit role;  the external auditor’s independence and the effectiveness of the audit process;  arrangements by which staff of the organisation may, in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters. (The audit committee should make sure that there are arrangements for independent investigation of such matters and for appropriate follow-up action). Governance Code: All 3 Organisation Types - 36 Principle. Type A Type B Type C 2.2(e) continued Approval:  approving the terms of engagement of the external auditor. Recommendations:  making recommendations to the board about the appointment, pay and conditions of the external auditor. The board then puts these recommendations to the members for their approval in a general meeting. The organisation’s annual report should include a description of the audit committee’s work. Governance Code: All 3 Organisation Types - 37 Principle. Type A Type B Type C 2.3 Identifying 2.3 (a) 2.3 (a) 2.3 (a) major risks for our Think about problems that With the manager, Do a full risk assessment each organisation and may arise, and the risks develop a risk year. This will involve: deciding ways of that may be needed to management policy and managing the risks.  identifying and achieve the organisation’s risk management plan for understanding the risks aims. the year. This should facing the organisation; identify the plan to deal Agree a yearly plan for with each risk identified.  assessing and mitigating dealing with major risks. Review and up date plan the risks to ensure they For example: each year. are within the organisation’s risk appetite  garda vetting for as set by the board. and; volunteers if they work with children or  ensure the processes, vulnerable adults; accountability and resources are in place to  doing regular back- manage the organisation’s ups of your database exposure to risk. or mailing list; and,  monitoring the plans which have been put in place to pay back a bank loan. Governance Code: All 3 Organisation Types - 38 Principle. Type A Type B Type C 2.3 continued 2.3 (b) 2.3 (b) 2.3 (b) Take out appropriate Take out appropriate Delegate the responsibility of insurance for example, insurance for example, making sure there are public liability insurance or public liability, buildings appropriate levels of insurance buildings insurance. and employers insurance. and other risk treatments in place. Receive report each year. 2.3 (c) 2.3 (c) 2.3 (c) If group owns property or If the organisation owns If the organisation owns any assets make sure that property or any assets property or any assets make legal ownership is in the make sure that legal sure that legal ownership is name of the group and ownership is in the name clearly in the name of the that the community of the organisation and organisation and that the interest is protected if the that the community community interest is protected group closes. interest is protected if the if the organisation ceases to organisation ceases to exist. Take legal advice if exist. necessary. Take legal advice if necessary. Take legal advice if necessary. 2.3 (d) 2.3 (d) 2.3 (d) Not a requirement for this Not a requirement for this Delegate the responsibility of category. category. developing, testing and updating continuity plans to the CEO. These plans will help to minimise disruption of services in a crisis. Governance Code: All 3 Organisation Types - 39 Principle 3. Being Type A Type B Type C transparent and accountable. 3.1 Identifying 3.1 (a) 3.1 (a) 3.1 (a) those who have a Decide who you need to Identify your key legitimate interest Identify your key stakeholders communicate with and stakeholders and decide in the work of our and make sure there is a how you will do that taking how the organisation will organisation strategy in place for into account your time and communicate with them. (stakeholders) and communicating with them financial resources. making sure there appropriately. is regular and effective 3.1 (b) 3.1 (b) 3.1 (b) communication Appoint an agreed Appoint an agreed Appoint an agreed spokesperson with them about spokesperson for the spokesperson for the for the organisation. our organisation. group. organisation. Governance Code: All 3 Organisation Types - 40 Principle. Type A Type B Type C 3.1 continued 3.1 (c) 3.1 (c) 3.1 (c) Produce a yearly activity Produce a yearly activity Ensure that the organisation’s report. report. annual report and accounts are widely available and easy to Make it widely available Make it widely available access on the organisation’s (for example, on your as possible (for example, website and elsewhere. website if you have one). on the organisation’s website). The annual report should identify the:  chair;  the deputy chair (where there is one);  the CEO and;  any other members of the board and the chairs of subcommittees. It should also set out the number of meetings of the board and its committees and individual attendance by directors. Governance Code: All 3 Organisation Types - 41 Principle. Type A Type B Type C 3.1 continued 3.1 (d) 3.1 (d) 3.1 (d) Meet the reporting Meet the reporting Receive report from CEO on requirements of any funder requirements of any compliance with reporting or relevant regulator. funder and the relevant requirements of relevant regulator (for example, regulators and funders. Companies Registration Office or the Charity Regulator, if appropriate). 3.1 (e) 3.1 (e) 3.1 (e) Hold an annual meeting of Make sure that the annual Make sure the AGM is held in line members and anyone else meeting is held in line with the governing document. who may be interested and with your governing Ensure that there is a report on the activities of document. Consider communications strategy in the year. other ways in which place. members and beneficiaries can be kept informed, such as a newsletter or through your website. Governance Code: All 3 Organisation Types - 42 Principle. Type A Type B Type C 3.1 continued 3.1 (f) 3.1 (f) 3.1 (f) State publicly that you State publicly that you State publicly that you comply comply with the comply with the with the Governance Code, Governance Code, making Governance Code, making making sure: sure: sure: 1) Your organisation’s board of 1) Your organisation’s 1) Your organisation’s directors signs and displays board of directors signs board of directors the one-page document and displays the one- signs and displays the outlining the five principles of page document one-page document the Code. This document outlining the five outlining the five should be displayed publicly: principles of the Code. principles of the Code.  on your website; This document should This document should be displayed publicly: be displayed publicly:  in your annual report;  on your website;  on your website;  in your reception area.  in your annual report  in your annual and; report; 2) Your organisation is working  in your reception  in your reception on the relevant actions to put area. area. these principles in place (use the Checklist, available on www.governancecode.ie). Where 2) Your organisation is 2) Your organisation is you are not as yet working on working on the relevant working on the relevant required actions, explain why. actions to put these actions to put these principles in place (use the principles in place (use Checklist, available on the Checklist, available on www.governancecode.ie). www.governancecode.ie). Where you are not as yet Where you are not as yet working on required working on required actions, explain why. actions, explain why. Governance Code: All 3 Organisation Types - 43 Principle. Type A Type B Type C 3.1 continued 3.1 (f) continued 3.1 (f) continued As a result of both action As a result of both action points above, insert the points above, insert the following statement into the following statement into the Directors report (or other Directors report (or other relevant place) in your relevant place) in your audited audited accounts: accounts: “We comply with the “We comply with the Governance Code for Governance Code for community, voluntary and community, voluntary and charitable organisations in charitable organisations in Ireland. We reviewed our Ireland. We reviewed our organisation’s compliance organisation’s compliance with with the principles in the the principles in the Code on Code on [provide date]. We [provide date]. We based this based this review on an review on an assessment of assessment of our our organisational practice organisational practice against the recommended against the recommended actions for each principle. Our actions for each principle. review sets out actions and Our review sets out actions completion dates for any and completion dates for issues that the assessment any issues that the identifies need to be assessment identifies need addressed.” to be addressed.” Governance Code: All 3 Organisation Types - 44 Principle. Type A Type B Type C 3.1 continued 3.1 (g) 3.1 (g) 3.1 (g) Not a requirement for this Not a requirement for this Make sure all the codes and category. category. standards of practice to which the organisation subscribes are publicly stated and are available. 3.2 Responding to 3.2 (a) 3.2 (a) 3.2 (a) stakeholders’ Use the annual meeting to Use the annual meeting Make sure the AGM is run so questions or views listen to people’s views to listen to the views of that it allows beneficiaries to about the work of about the work of the beneficiaries about the express their views about the our organisation organisation. work of the organisation. work of the organisation. and how we run it. 3.2 (b) 3.2 (b) 3.2 (b) Put a clear system in place Put a clear system in Make sure there is a clear for dealing with place for dealing with method whereby stakeholders correspondence, feedback correspondence, feedback can communicate with the and complaints to the and complaints to the organisation throughout the organisation. organisation. year. 3.2 (c) 3.2 (c) 3.2 (c) Not a requirement for this Not a requirement for this Receive yearly reports on category. category. complaints received, and action taken, to make sure that the complaints system is working. Governance Code: All 3 Organisation Types - 45 Principle. Type A Type B Type C 3.2 continued 3.2 (d) 3.2 (d) 3.2 (d) Not a requirement for this Not a requirement for Monitor key stakeholders’ views category. this category. on the organisation’s reputation and take remedial action when necessary. 3.3 Encouraging and 3.3 (a) 3.3 (a) 3.3 (a) enabling the Actively seek feedback from Actively seek feedback Make sure that your beneficiaries engagement of those the beneficiaries of your from the beneficiaries are consulted during the who benefit from our group. (This could be done of your organisation. strategic planning process. organisation in the regularly on a word of planning and mouth basis, or you may decision-making of want to do something more the organisation. formal such as a yearly survey.) 3.3 (b) 3.3 (b) 3.3 (b) Use the annual meeting to Consult with Make sure beneficiaries are consult with your beneficiaries if involved appropriately in beneficiaries if you are significant changes to decision-making processes. planning to make significant the organisation are changes to the way that you being planned. do things. Governance Code: All 3 Organisation Types - 46 Principle 4. Working Type A Type B Type C effectively. 4.1 Making sure 4.1 (a) 4.1 (a) 4.1 (a) that our governing Make sure that all board Make sure that all board Make sure the board induction body, individual members and sub- members and sub- process includes an overview of board members, committee members (if committee members (if the role of the board and committees, staff any) understand and are any) understand and are individual board members, the and volunteers familiar with the familiar with the Governance Code and the understand their: Governance Code and the Governance Code and the organisation’s governing  role, constitution. organisation’s governing document. documents.  legal duties and  delegated responsibility for decision-making. Governance Code: All 3 Organisation Types - 47 Principle. Type A Type B Type C 4.1 continued 4.1 (b) 4.1 (b) 4.1 (b) Make sure that board Make sure that board Make sure that board members members understand that members understand that understand that they have a they have a duty to act they have a duty to act duty to act independently in a independently in a independently in a personal capacity in promoting personal capacity in personal capacity in the aims of the organisation in promoting the aims of the promoting the aims of the line with its governing organisation in line with its organisation in line with document. While board members governing document. its governing document. may be nominated by a While board members may While board members particular group, they must not be nominated by a may be nominated by a act as a representative of that particular group, they particular group, they group in acting as a board must not act as a must not act as a member. representative of that representative of that Board members must at all group in acting as a board group in acting as a board times respect board member. member. confidentiality. Board members must at all Board members must at times respect board all times respect board confidentiality. confidentiality. Governance Code: All 3 Organisation Types - 48 Principle. Type A Type B Type C 4.1 continued 4.1 (c) 4.1 (c) 4.1 (c) Identify a chair, secretary Agree and document the Appoint a sub-committee with a and treasurer for the group roles of the officers and governance remit to do a yearly and decide when and how ordinary board members review of: the positions will be and the terms of  board roles; rotated. reference for any sub- committees.  the terms of reference and;  membership of sub- committees. 4.1 (d) 4.1 (d) 4.1 (d) Decide and record how Agree and write up a Make sure there is a copy of the decisions will be taken at process for decision- schedule of matters reserved to meetings and between making between the board in the board meetings if necessary. meetings. Agree the handbook. decisions that can be delegated and the decisions that must be taken by the board. Make sure that this is in line with the governing document and get advice if not. Governance Code: All 3 Organisation Types - 49 Principle. Type A Type B Type C 4.1 continued 4.1 (e) 4.1 (e) 4.1 (e) Not a requirement for this Clarify the differences Make sure there is a written category. between the statement of the division of responsibilities of the responsibilities between the board and the manager. chair and CEO including the CEO’s delegated authorities. 4.1 (f) 4.1 (f) 41 (f) Not a requirement for this Make sure that board Make sure that board members category. members do not interfere do not interfere in duties in duties delegated to properly delegated to staff but staff but should hold staff should hold staff to account to account through the through the CEO. CEO. 4.1 (g) 4.1 (g) 4.1 (g) Not a requirement for this Not a requirement for this Make sure newly appointed category. category. board members, sign a code of conduct and terms of reference setting out their ‘fiduciary duties’. These are the legal duty of one party to act in the best interests of another. These duties relate mainly to assets, property, statutory obligations and the organisation’s expectations of board members. Governance Code: All 3 Organisation Types - 50 Principle. Type A Type B Type C 4.2 Making sure 4.2 (a) 4.2 (a) 4.2 (a) that as a board we Have regular meetings Make sure that the board Make sure that the board meets exercise our with sufficient notice. meets regularly and in regularly and in line with your collective line with your governing governing document. responsibility document. through board meetings that are 4.2 (b) 4.2 (b) 4.2 (b) efficient and Have an agenda for each The chair with the The chair and CEO agree the effective. meeting. manager or secretary sets agenda of board meetings. the agenda of board meetings. 4.2 (c) 4.2 (c) 4.2 (c) Take minutes and agree Agenda and minutes of Agenda, minutes of last meeting them at the next meeting. last meeting to be sent and reports or papers outlining before meeting. proposals to be sent before meeting in an accurate, timely and clear manner. Governance Code: All 3 Organisation Types - 51 Principle. Type A Type B Type C 4.2 continued 4.2 (d) 4.2 (d) 4.2 (d) Start and finish meetings Start and finish meetings The chair is responsible for on time. on time. Chair is ensuring: responsible for: Chair keeps order at  board meetings run to time; meetings, encourages  keeping order at  enough time is allowed for participation and ensures meetings, discussion; that decisions are made. encouraging maximum  maximum participation; participation and;  adequate information is  ensuring that available and; decisions are made  decisions are made and and implemented. implemented. 4.2 (e) 4.2 (e) 4.2 (e) Not a requirement for this Make sure board minutes Make sure board minutes follow category. follow standard practice, standard practice, for example, for example, advice advice sheets from the Office of sheets from the Office of the Director of Corporate the Director of Corporate Enforcement. Enforcement. Governance Code: All 3 Organisation Types - 52 Principle. Type A Type B Type C 4.2 continued 4.2 (f) 4.2 (f) 4.2 (f) Not a requirement for this Not a requirement for this Make sure individual board category. category. members have reasonable access to independent professional advice (for example, financial or legal advice) where they think it necessary to fulfil their responsibilities. 4.3 Making sure 4.3 (a) 4.3 (a) 4.3 (a) that there is Take time once a year to Take time once a year to Agree a yearly board review suitable board identify ways in which the review the way that the process. recruitment, working of the board could board works and identify development and This process will include a review be improved. improvements. retirement of: processes in place.  the board;  the performance of the chair;  the performance of individual board members;  the sub-committees’ performance, structure, size, make up and;  adequacy of information for board meetings. The Company Secretary to make sure that any changes agreed are in line with the governing document. Governance Code: All 3 Organisation Types - 53 Principle. Type A Type B Type C 4.3 continued 4.3 (b) 4.3 (b) 4.3 (b) Take time once a year to Review the skills, Agree a strategy for board discuss who might be attributes and experience recruitment which: interested in joining the that are needed on the  meets the need for a mix of board and who might want board each year. skills and experience; to leave. Decide how you will  promotes equal opportunities Agree who you would like develop existing board and diversity at board level, to invite onto the board, members or recruit new and; bearing in mind the need members to meet these for a mix of skills and needs.  is in line with the governing diversity in terms of document. Select new board background and Consider the extent to which members according to the experience. (Make sure your board is made up of rules laid out in your that you follow your own member representatives, governing document and rules about election to the beneficiaries or external the need to promote board as laid out in your representatives and what the equal opportunities and constitution.) best mix is. diversity at board level. Consider the extent to Consider the extent to which your board is made which your board is made up of member up of member representatives, representatives, beneficiaries or external beneficiaries or external representatives and what representatives and what the best mix is. the best mix is. Governance Code: All 3 Organisation Types - 54 Principle. Type A Type B Type C 4.3 continued 4.3 (c) 4.3 (c) 4.3 (c) Welcome new board Welcome new board Agree and put a comprehensive members, explain the work members, explain the induction programme in place for of the board and its work of the board and its new board members. committees and help them committees and help Make sure new members to get involved. them to get involved. develop a clear understanding of Make sure they have a Make sure new board their roles and responsibilities copy of the constitution members are given a including compliance with the and this Governance Code. copy of the governing principles of this Governance document, yearly work Code. plan, policy positions, Agree a skills development recent board minutes and programme to fill gaps in the this Governance Code. new board member’s competencies that may be needed for their role. 4.3 (d) 4.3 (d) 4.3 (d) Not a requirement for this Provide appropriate Provide appropriate training for category. training for board board members. members. Governance Code: All 3 Organisation Types - 55 Principle 5. Type A Type B Type C Behaving with integrity. 5.1 Being honest, 5.1 (a) 5.1 (a) 5.1 (a) fair and Make sure the chair leads Make sure the chair leads Make sure the chair leads the independent. the board in developing an the board in developing board in developing an ethical ethical culture in line with an ethical culture in line culture in line with the values of the values of the with the values of the the organisation. organisation. organisation. 5.1 (b) 5.1 (b) 5.1 (b) Develop and agree a code Develop and agree a code Develop and agree a code of of conduct for board of conduct for board conduct for board members that members. members that outlines outlines the expected standards the expected standards of of behaviour and what happens behaviour and what if they are not met. happens if they are not met. 5.1 (c) 5.1 (c) 5.1 (c) Make sure the code of Make sure the code of Make sure the code of conduct conduct gives clear conduct gives clear gives clear guidelines on the guidelines on the receipt of guidelines on the receipt receipt of gifts or hospitality by gifts or hospitality by of gifts or hospitality by board members. board members. board members. Governance Code: All 3 Organisation Types - 56 Principle. Type A Type B Type C 5.1 continued 5.1 (d) 5.1 (d) 5.1 (d) Make sure all board Make sure all board Make sure all board members members sign a members sign a sign a commitment to follow the commitment to the code. commitment to follow the code on appointment. code on appointment. 5.1 (e) 5.1 (e) 5.1 (e) Review your code of Review your code of Review your code each year to conduct at least every conduct each year. ensure it meets developing three years. ethical standards expected by stakeholders and society. 5.1 (f) 5.1 (f) 5.1 (f) Be fair by consistently Be fair by consistently Be fair by consistently applying applying the same ethical applying the same ethical the same ethical standards to standards to every person standards to every person every person and situation and situation. and situation. Governance Code: All 3 Organisation Types - 57 Principle. Type A Type B Type C 5.2 Understanding, 5.2 (a) 5.2 (a) Hold a discussion 5.2 (a) Hold a discussion declaring and Hold a discussion about the about the issues of ‘conflict about the issues of ‘conflict of managing conflicts issues of ‘conflict of interest’ of interest’ and ‘conflict of interest’ and ‘conflict of of interest and loyalty.’ loyalty.’ and ‘conflict of loyalty.’ conflicts of Develop a policy on each of Develop a policy on each of Develop a policy on each of loyalties. these. these. these. 5.2 (b) 5.2 (b) 5.2 (b) Each board member and Each board member and Each board member and anyone else present must anyone else present must anyone else present must tell tell the board if they believe tell the board if they the board if they believe they they have a conflict of believe they have a conflict have a conflict of interest on a interest on a matter to be of interest on a matter to matter to be decided at the decided on at a meeting. be decided at the meeting. meeting. Unless the board Unless the board decides Unless the board decides decides otherwise, they must otherwise, they must leave otherwise, they must leave leave when the board is when the board is when the board is discussing or deciding on that discussing or deciding on discussing or deciding on matter. The person concerned that matter. The person that matter. The person should be told what decision concerned should be told concerned should be told was reached. what decision was reached. what decision was reached. Conflicts of interest must be Conflicts of interest must be Conflicts of interest must recorded in the minutes. recorded in the minutes. be recorded in the Conflicts of loyalty may be minutes. Conflicts of loyalty may be serious enough to be conflicts serious enough to be Conflicts of loyalty may be of interest. conflicts of interest. serious enough to be conflicts of interest. Governance Code: All 3 Organisation Types - 58 Principle. Type A Type B Type C 5.2 continued 5.2 (c) 5.2 (c) 5.2 (c) Not a requirement for this Establish a register of Establish a register of category. directors’ interests. Update directors’ interests. Update it it each year. each year. Board members must Board members must notify notify the board of any the board of any relevant relevant changes in their changes in their interests interests when they when they happen. These happen. These should be should be recorded in the recorded in the register. register. 5.2 (d) 5.2 (d) 5.2 (d) Not a requirement for this Not a requirement for this Make sure the board induction category. category. process includes information and policies about conflicts of interest and conflicts of loyalty. Governance Code: All 3 Organisation Types - 59 Principle. Type A Type B Type C 5.3 Protecting and 5.3 (a) 5.3 (a) 5.3 (a) promoting our Make sure all board Make sure all board Make sure all board members organisation’s members understand their members understand understand their responsibility to reputation. responsibility to act as their responsibility to act act as champions for the champions for the group as champions for the organisation by promoting its by promoting its work and organisation by promoting work and reputation. reputation. its work and reputation. 5.3 (b) 5.3 (b) 5.3 (b) Make sure the code of Make sure the code of Make sure the code of conduct conduct makes it clear that conduct makes it clear makes it clear that each board each board member has a that each board member member has a duty not to do duty not to do anything has a duty not to do anything that may damage the that may damage the anything that may reputation of the organisation. reputation of the group. damage the reputation of the organisation. 5.3 (c) 5.3 (c) 5.3 (c) Make sure the code of Make sure the code of Make sure the code of conduct conduct clarifies that board conduct clarifies that clarifies that board members members have a duty to board members have a have a duty to maintain the maintain the confidentiality duty to maintain the confidentiality of board of board meetings. confidentiality of board meetings. meetings. Governance Code: All 3 Organisation Types - 60 Principle. Type A Type B Type C 5.3 continued 5.3 (d) 5.3 (d) 5.3 (d) Not a requirement for this Not a requirement for this Make sure the safeguarding category. category. and promoting of the organisation’s reputation is dealt with in the communications and risk management strategies. Governance Code: All 3 Organisation Types - 61 6. Explanation of terms The following explanation of terms is how they are understood and used in the Governance Code for Community, Voluntary and Charitable Organisations in Ireland. Accountable: Answerable to. Annual Report: This is a document setting out the yearly operational and financial activities of an organisation. Annual General Meeting (AGM): The yearly meeting of the members of an organisation. Its purpose is to:  Approve the previous year’s financial statements;  Confirm appointments to the governing body;  Make decisions in which the members must be involved, and;  Confirm the appointment of a person to review the annual accounts (in the case of a company, the auditor). By law companies limited by guarantee must have an AGM. Annual work plan: This is a schedule of tasks for the coming year. It gives details of the resources to accomplish these tasks. Articles of association: In a company limited by guarantee the articles of association set out the members’ rights, directors’ power and how the organisation makes decisions. (This is one of the two formal governing documents which are used to set up a company limited by guarantee. The second is the Memorandum of Association). Assets: Money or other valuables (for example, premises) belonging to an individual or a business. Governance Code: All 3 Organisation Types - 62 Beneficiaries: This is the group of people, animals or causes (such as buildings, climate, democracy), which an organisation has been set up to help, support, preserve or advance. Board: See governing body. Board handbook: This is an information guide for board members on how a board works. Board induction process: This is a process which aims to familiarise a new board member with the organisation. CEO (chief executive officer): The person responsible for managing the activities of an organisation. This person reports to the governing body and this is usually a paid position. This person may be known by other names such as:  Managing director;  Manager;  Coordinator and sometimes;  Director (which is not to be confused with those people who are members of the board of directors of the organisation). Chair: The person who leads the governing body. Code of conduct: A document setting out expected standards of behaviour of members of an organisation and the procedures in place if these standards are not met. Communications strategy: The method by which information about an organisation is communicated both internally and externally. Company limited by guarantee (also called a company limited by guarantee without a share capital): This is a type of legal entity Governance Code: All 3 Organisation Types - 63 normally chosen by voluntary organisations, charities and community groups because:  It is a distinct legal entity and in law is considered to be separate to its members or board members;  It is a democratic structure; the company is controlled by the members who elect the Management Committee, usually known as the Board of Directors;  Members cannot benefit from any profits made;  Each board member's liability is limited to a nominal sum which they guarantee to pay if the company has debts on winding up. Company secretary: This is a person appointed by the directors of a company who is responsible for making sure that the company complies with company law. This person is not necessarily the same person who carries out the secretarial duties (for example takes the minutes) or has the title of Honorary Secretary within a particular organisation. It is a role that may be held by a corporate entity for example, an accounting or law firm. Comply: To act in line with the Code of Governance. ‘Comply or explain’: This is an approach used in corporate governance. Rather than setting out strict rules, organisations are expected to use a principles-based code or explain publicly why they are not implementing it. Conflict of interest: A conflict of interest arises when your private interests compete with your professional duties. A conflict of interest may arise, for example, if a board member influences the awarding of a contract to a company owned by a family member. It is legal to award a contract to the best qualified company, even if that company is owned by a relative, but the board member themself could not be part of the Governance Code: All 3 Organisation Types - 64 decision making process. This would be a conflict of interest, because their own family would benefit financially from his position. A conflict of interest can also happen in relation to connections the board member might have that are unrelated to family connections, but to do with others with whom he/she may have a business connection. Conflict of Loyalty: arises where a board member may be involved in board decisions and may be (or perceived to be) potentially influenced by considerations other than the best interests of the organisation. This might happen when the board member has come onto the board as a nominee of a particular group e.g. members in a particular county, a funding body, beneficiaries or staff. This situation may possibly cause the board member to think that they should act in the interests of the grouping that nominated them. However, in all cases, regardless of how they got onto the board of directors, all board members should act in the interests solely of the organisation on whose board that they sit, rather than acting in the interests of the grouping that nominated them. Conflicts of loyalty may be sufficiently serious to amount to conflicts of interest. Constitution: This is a document that sets out the basic rules for governance (see also governing document). Continuity plans: This is a plan to determine how the company will be maintained in the future. Corporate governance: See governance. Data protection policy: A policy that reflects data protection rules and applies them to the systems of the organisation so that they comply with the relevant Data Protection law. Governance Code: All 3 Organisation Types - 65 Delegate: To give another person the authority to do work and/or to take decisions on your behalf. Delegated authority: This happens when the governing body authorises the CEO or manager to take a decision on their behalf to facilitate efficient management or administration. It can also happen between a CEO or Manager and other staff. Director: A member of the board of directors of a company limited by guarantee. Employment policy: This policy sets out an organisation’s guidelines on the employment of individuals. The guidelines on recruitment, induction, supervision and appraisals and the grievance and disciplinary procedures may be in one or more documents. Equality policy: A document setting out the steps an organisation is taking to make sure that it is following the principle of equality. When developing policy, organisations need to take the nine grounds of discrimination and equality legislation into account. Financial management procedure or system: The procedure or system in place for managing and controlling the financial resources of an organisation. Governance: Governance refers to how an organisation is run, directed and controlled. Good governance means an organisation will design and put in place policies and procedures that will make sure the organisation runs effectively. Governing body: The appointed representatives responsible for making sure that the organisation is run in line with the governing document. Governance Code: All 3 Organisation Types - 66  In the case of a company – the board of directors;  In the case of a trust – the trustees;  In the case of a club – the committee. Depending on the nature of the organisation the governing body may be called other names such as:  The board of directors;  The council;  The governors;  The management committee or;  The national council. Employees are not normally members of the governing body. Governance code: A set of guidelines setting out the systems and processes involved in steering an organisation. Governing document: The founding document of an organisation that sets out its basic rules.  In the case of a company – the memorandum and articles of association;  In the case of a trust – the trust deed;  In the case of a club – the constitution, the charter, the regulations, the rules or the statutes.  In the case of a friendly society – the rules. Health and safety policy: A document setting out the health and safety procedures in an organisation. Incorporated: means that a group is established as a separate legal entity, usually as a company limited by guarantee, but also can be as a cooperative or friendly society. Governance Code: All 3 Organisation Types - 67 Internal audit function: An internal audit is an organisation’s self- examination. It analyzes the activities, processes and procedures of a business. This audit identifies weak links in an organisation’s systems as well as opportunities for improvement. It also acts as a feedback mechanism for the management and board. It is an independent process within an organisation. The audit committee report to the board. It is important to make sure that there is clarity about the:  Purpose;  Authority;  Activities;  Responsibility and performance of the internal audit function between board, audit committee, CEO and senior management. Key performance indicator: This is a measurement of the degree of progress towards an organisation’s aims and objectives. Legal entity: An individual or organisation which is permitted by law to enter into a contract, and be sued if it fails to meet its contractual obligations. Manager: The person with direct responsibility for managing the various resources of an organisation. Memorandum: The memorandum gives details of:  A company’s name;  Its Objects; Governance Code: All 3 Organisation Types - 68  The limits of the members’ liability if the company has to be wound up. (This is one of the two formal governing documents which are used to set up a company limited by guarantee. The second is the Articles of Association). Mission: The main aim of a group, an organisation or a person. Also called ‘purpose’. Mission statement: a written statement of the mission. Nine grounds of discrimination: Under the Employment Equality Act 1998 and the Equality Act 2004 there are nine legal grounds of discrimination. They are: 1. Gender; 2. Marital status; 3. Family status; 4. Sexual orientation; 5. Religion; 6. Age; 7. Race; 8. Disability; and, 9. Membership of the Travelling community. Objects: the objects of an organisation describe the reason for the organisation’s existence. Performance review: This is a process where the effectiveness of the board, the chair and individual board members is formally considered. Staff should also have performance reviews. These should be done every year. Governance Code: All 3 Organisation Types - 69 Property: That which is legally owned by an individual or entity. Policy: A course of action proposed or adopted by an organisation or person. Purpose: The main aim of a group, an organisation or a person. What the organisation seeks to do. Also called ‘mission’. Register of directors’ interests: A list of the interests and loyalties of the directors which may conflict with the interests of the organisation. Risk: A risk is the potential that a chosen course of action or activity (including no action) will lead to an undesirable outcome. Risk appetite: The level of risk that an organisation is willing to accept. Risk assessment: The overall process of evaluating the likelihood and consequence of risk to the organisation. Risk management policy: A policy setting out how the risks which have been identified by the risk assessment procedure will be managed and controlled. Schedule of matters reserved for the board: This is a list of the decisions that only a board can make and which cannot be delegated. Shadow director: This is a person who, although not officially a member of the board, instructs other directors on what to do and those directors follow their instructions. Individuals who act in this way have the same liability as properly appointed directors. A shadow director could be the Governance Code: All 3 Organisation Types - 70 paid CEO, if it can be shown that they are effectively in control of the board. Another example of a shadow director might be the founder of the organisation, who is no longer on the board, but who effectively still exerts significant influence over the board and the direction of the organisation. Stakeholder: A person or group with an interest (a stake) in the actions or policies of an organisation, which means they may affect the actions or policies and/or be affected by them. Key stakeholders might include:  Members;  Beneficiaries;  Funders;  Staff;  Volunteers;  The general public, and;  Regulators. Statement of the division of responsibilities: This is a statement which sets out the responsibilities of the chair and the CEO. This document should include the CEO’s delegated authority. Strategic issues: These are matters concerned with the delivery of the overall mission, values and objectives of an organisation’s strategy. Strategic plan: This is a document setting out an organisation’s mission, vision, values, aims and objectives for the medium to long term and how these will be achieved. Terms of reference: A set of guidelines setting out the function of a grouping such as the board, a committee or a sub-committee. The terms Governance Code: All 3 Organisation Types - 71 provide information on purpose, goals, main activities and calendar. Terms of reference are often agreed at the start of an activity, for example, a project or the work of a third party committee. Trust: A Trust is a legal entity which charities sometimes use to structure their organisation. Its governing document is called the ‘Deed of Trust’ and the members of its governance body are called Trustees. Trustee: In the sense of the Charities Act 2009, is a person who sits on the governing board of any charitable organisation, regardless of how it is legally made up so it includes, for example, members of the board of a company limited by guarantee, members of the management committee of an unincorporated association. Unincorporated Association: This is a legal form used by a large number of community, voluntary, charity organisations, clubs and associations. Most such organisations start up as an unincorporated association with a constitution and rules. Some organisations subsequently decide to change to the more structured form of being a company limited by guarantee. Vision: The view of the preferred future as held by a particular group of people or an organisation. Volunteer policy: A policy dealing with the recruitment, induction, support and supervision of volunteers and setting out the procedures for implementing the policy and dealing with problems, if they arise. Governance Code: All 3 Organisation Types - 72 7. About the Organisations Involved The following organisations all came together to develop this Governance Code as a result of their shared aim of improving governance practice across the community, voluntary and charity sector in Ireland. The result of improved governance practice will be better outcomes for the people that organisations in the sector serve. All of the following organisations have a track record in standing for, supporting and promoting high standards of governance in the sector. Boardmatch Ireland Boardmatch Ireland supports the development of the community and voluntary sector (the not-for-profit sector) by strengthening boards and management committees. Boardmatch Ireland provides a web-based matching service where people can register their interest in volunteering on not-for-profit boards. These candidates are then matched, based on location, skills and preferred area of interest, to not-for-profit organisations who have also registered their board opportunities. Boardmatch Ireland also provides bespoke supports to boards of not-for-profit organisations through its Training and Executive Search services. www.boardmatchireland.ie Business in the Community Ireland Since it was set up in 2000, the mission of Business in the Community Ireland (BITCI) has been to harness the power of Irish business to maximise its positive impact on all its stakeholders. It is a non-profit organisation specialising in advice and guidance to leading companies on corporate responsibility and corporate community involvement. A business driven network, with major social initiatives, BITCI’s membership is drawn from Ireland’s most progressive companies. BITCI has the unique expertise to train and Governance Code: All 3 Organisation Types - 73 develop capacity on corporate responsibility within organisations; to improve their companies’ reputation, competitiveness and profitability through communicating their social, environmental and community management impacts. www.bitc.ie Carmichael Centre for Voluntary Groups Carmichael Centre is the first and largest shared services centre for the community and voluntary sector in Ireland. Each year we support 47 resident member charities located within the Centre in Dublin 7, 100's of associate members located throughout Ireland, 1000's of volunteers, boards members, managers and staff who avail of training, information, organisational supports and meeting facilities. Every day, we are committed to delivering services that help to build stronger charities nationwide. www.carmichaelcentre.ie Clann Credo The Social Investment Fund has a simple goal: to support people and assist in the building of stronger communities. It supports community businesses, voluntary organisations, social enterprises and charities by providing accessible loan finance. If loan finance can help, it wants to put money to work where it can make a real difference. Since its establishment 15 years ago, Clann Credo’s mission has been to use finance exclusively for social purposes. www.clanncredo.ie The Disability Federation of Ireland Disability Federation of Ireland (DFI) is the national support organisation for voluntary disability organisations in Ireland who provide services to people with disabilities and disabling conditions. We work to ensure that Irish society is fully inclusive of people with disabilities and disabling conditions so that they can exercise fully their civil, social and human rights. There are 127 organisations Governance Code: All 3 Organisation Types - 74 within membership or as associates in DFI. www.disability- federation.ie ICTR ICTR is a membership organisation of charities, focused on creating a policy climate in which philanthropy can thrive - through a combination of taxation and regulatory reform. Since the ICTR was formed in 1991, we have organised a number of campaigns to optimise tax effective giving, reduce the tax burden on the sector, and ensure regulation is appropriate to the needs of Irish charities. www.ictr.ie Volunteer Ireland Volunteer Ireland is the national volunteer development agency and a representative body and support agency for all local Volunteer Centres in Ireland. Volunteer Ireland’s vision is for an Irish society in which everyone who wants to, has access to meaningful volunteering opportunities and where the contribution of volunteering is valued and recognised as an intrinsic component of active citizenship. Volunteer Ireland work to inspire, promote, support and celebrate voluntary activity in Ireland and abroad. The Wheel The Wheel is Ireland’s representative and support umbrella group for community, voluntary and charity organisations. We represent their shared interests to Government and other decision-makers; we help them get things done; and, we help to foster a better public understanding of the contribution that the community and voluntary sector makes to Irish life. We are a ‘one stop shop’ for and about the charity sector in Ireland. www.wheel.ie Governance Code: All 3 Organisation Types - 75 The Corporate Governance Association of Ireland (CGAI) The CGAI is a professional association of members certified in corporate governance post-graduate studies. It provides its members with continuous professional development programmes and other resources to enable them to keep abreast of this continually evolving subject. It seeks to promote best practice in governance across the commercial, public and voluntary sectors by developing Codes of Good Governance in partnership with like- minded organisations as well as providing qualified candidates for board positions. www.cgai.ie Sheila Cahill Consulting Sheila Cahill founded and runs this training and consultancy business based in Limerick, Ireland. She specialises in governance training for boards and management committees and helping organisations to develop their own monitoring and evaluation systems. Sheila has worked for over twenty years in the community and voluntary sector, focusing on organisational capacity building since 1995. www.sheilacahill.ie Arthur Cox Arthur Cox is one of Ireland’s leading law firms with over 300 lawyers, including more than 100 partners. It is an “all-island” law firm, with full-service offices in Dublin and Belfast, as well as offices in London and New York. Arthur Cox has a long history of involvement in the community and voluntary sector in general, and with charities in particular. The firm advises on changes to legal structures/re-organisations, the role of trustees/directors and governance issues, applications to the Commissioners of Charitable Donations and Bequests for Ireland, tax advice including applications for tax exemptions all asset types and drafting and negotiating security documentation, the acquisition, disposal and Governance Code: All 3 Organisation Types - 76 maintenance of property; licence applications and fundraising queries. www.arthurcox.com Governance Code: All 3 Organisation Types - 77