Charity Governance Code 2025: A Practical Self-Assessment Guide for Small Charities

The Charity Governance Code was refreshed in November 2025. It now has eight principles (up from seven), a unified format for all charity sizes, and a new recommendation on AI and technology policies. If your charity has not reviewed the Code since the 2017 version, the 2025 update is a good reason to do a full self-assessment.

This guide breaks down each principle with practical self-assessment questions aimed at small charities — the ones run by volunteer trustees who meet quarterly and manage everything in shared folders.

How the Code works: "apply or explain"

The Charity Governance Code is not a legal requirement. No regulator will fine you for not following it. But the Charity Commission references it in guidance, grant funders increasingly ask about governance standards, and — most importantly — it helps boards identify blind spots before they become problems.

The approach is "apply or explain": for each principle, your board either demonstrates how it applies the principle, or explains why it has chosen a different approach given its circumstances. A small charity with three trustees and no staff will apply the principles very differently from a national charity with a paid CEO and 50 employees. Both are valid.

The eight principles

1. Foundation

What it means: Your charity has a clear legal basis, an appropriate legal form, and a governing document that is fit for purpose.

Self-assessment questions for small charities:

• When did your board last review the governing document (constitution, trust deed, or articles)?
• Does your governing document reflect how your charity actually operates today?
• Are all trustees aware of the charity's objects and powers?
• Is your charity registered with the correct regulator for its legal form?

Common gap: Many small charities have not updated their governing document in 10+ years. If your charity has changed what it does, who it serves, or how it raises funds, the governing document may need updating. The Charity Commission publishes guidance on amending governing documents.

2. Organisational Purpose

What it means: Your charity has a clear mission, a strategy for achieving it, and a way to measure whether it is making a difference.

Self-assessment questions:

• Can every trustee state the charity's purpose in one sentence?
• Do you have a written strategy or plan, even a simple one?
• How do you measure impact — and do you report on it to stakeholders?
• When did you last review whether the charity's activities still align with its purpose?

Practical tip: A strategy does not need to be a 30-page document. For a small charity, a one-page plan covering objectives, activities, success measures, and a review date is sufficient.

3. Leadership

What it means: The board provides effective leadership, with a clear division between governance (the board) and management (staff or volunteers who deliver services).

Self-assessment questions:

• Does your chair lead meetings effectively and ensure all trustees contribute?
• Is there a clear distinction between what the board decides and what staff/volunteers decide?
• If you have no staff, does the board distinguish between its governance role and its operational role?
• Do you have a succession plan for the chair and other key roles?

Common gap for small charities: When trustees are also the people running activities, the governance/management boundary blurs. The chair runs the jumble sale AND chairs the board meeting. Acknowledge this and agree which decisions need a board vote versus which the chair or treasurer can make independently.

4. Ethics and Culture

What it means: The board sets and models the values, behaviours, and culture of the organisation.

Self-assessment questions:

• Does your charity have a written set of values or a code of conduct for trustees?
• How do you handle disagreements within the board?
• Do trustees feel comfortable raising concerns?
• New in 2025: Does your charity have a policy on the use of technology and AI tools?

The AI policy point: The 2025 Code specifically recommends that charities consider how they use AI and technology. For a small charity, this does not require a lengthy policy — a brief statement covering what tools you use, how you handle personal data in them, and who approves new tools is sufficient.

5. Decision Making

What it means: The board makes informed, transparent decisions that are properly documented.

Self-assessment questions:

• Do your board meeting minutes record the key points of discussion, not just the decisions?
• Do trustees receive papers in advance with enough time to read them?
• How do you handle decisions between meetings (email votes, written resolutions)?
• Are conflicts of interest declared and recorded at every meeting?

Practical tip: Keep a standing item at the start of every trustee meeting: "Declaration of interests." Record it in the minutes even when no one declares anything. This creates a clean audit trail.

6. Managing Resources and Risks

What it means: The board ensures the charity's resources (money, people, reputation) are managed responsibly and risks are identified and addressed.

Self-assessment questions:

• Does your charity have a reserves policy, and is it reviewed annually?
• Do you maintain a risk register, even a simple one?
• Are your financial controls adequate — authorisation limits, dual signatures, bank reconciliation?
• Do you have adequate insurance for your activities?

Common gap: Small charities often skip the risk register because it sounds corporate. A risk register for a village charity might have five entries: loss of key volunteer, safeguarding incident, financial loss/fraud, reputational damage from a complaint, and loss of venue. Each with a simple likelihood/impact rating and a one-line mitigation. That is sufficient.

7. Equity, Diversity and Inclusion

What it means: The board actively considers EDI in its governance, leadership, and service delivery.

Self-assessment questions:

• Does your board reflect the diversity of the community you serve?
• Have you discussed EDI as a board, even informally?
• Are there barriers to becoming a trustee at your charity (meeting times, location, jargon)?
• Do your services reach the people who need them most?

New in 2025: EDI is now a standalone principle (previously embedded within other principles). For small charities, this is about awareness and intent rather than formal EDI programmes. Start by asking whether your board composition and meeting practices exclude potential trustees.

8. Board Effectiveness

What it means: The board has the right mix of skills, invests in trustee development, and reviews its own performance.

Self-assessment questions:

• Do you have a skills audit showing what expertise your board has and what gaps exist?
• Do new trustees receive an induction?
• When did the board last review its own effectiveness?
• Do trustees have access to relevant training or development?

Practical tip: Trustee induction does not need to be a formal programme. A 30-minute conversation with the chair covering the governing document, latest accounts, key policies, and upcoming priorities is a good start. Follow up with the Charity Commission's trustee guidance.

Running your self-assessment

The most effective approach is to work through the principles together at a board meeting or away day. Allocate 10-15 minutes per principle:

1. Read the principle and its expected outcomes
2. Discuss how your charity currently applies it
3. Identify gaps or areas for improvement
4. Agree 1-2 specific actions per principle
5. Set a date to review progress

You do not need to score yourself against every sub-point. Focus on the areas where your board identifies the biggest gaps between what the Code expects and what your charity actually does.

Use our free Governance Code Self-Assessment tool to work through each principle interactively and generate a summary for your board records.

For a broader view of all your compliance obligations, see our charity compliance checklist for 2026.

FAQ

Is the Charity Governance Code mandatory? No. The Code is voluntary. However, the Charity Commission references it in guidance, and some funders ask about governance standards in grant applications. Following the Code demonstrates good practice.

What are the principles of the Charity Governance Code? The 2025 Code has eight principles: Foundation, Organisational Purpose, Leadership, Ethics and Culture, Decision Making, Managing Resources and Risks, Equity Diversity and Inclusion, and Board Effectiveness.

What is "apply or explain" in charity governance? Each charity assesses itself against the Code's principles. Where it follows a principle, it "applies" it. Where it takes a different approach, it "explains" why. Both are acceptable — the point is thoughtful self-assessment, not box-ticking.

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This guide applies to charities registered in England and Wales. The Charity Governance Code is published by an independent steering group and applies to all registered charities regardless of size. This is general guidance, not legal advice.

Sources

• Charity Governance Code 2025
• Charity trustee: what's involved — GOV.UK
• How to make changes to your charity's governing document — GOV.UK