March 23, 2026 Reframing Governance: What the 2025 Charity Governance Code Signals for Boards
The 2025 Charity Governance Code (the “Code”) arrives at a moment when many boards are under pressure. Funding models are shifting, expectations of transparency are growing, and trustees are being asked to demonstrate leadership in far more visible ways.
In its most significant refresh since 2017, the new Code does not radically rewrite the responsibilities of charity trustees, but it does reset the tone. It places far greater emphasis on behaviours, values, accountability and processes that underpin effective governance across charities of all sizes, rather than the accumulation of policies or procedural checklists.
In addition to reflecting on how decisions are made and resources managed, the Code also encourages charities to consider how ethics, inclusion and culture are embedded in everyday governance. For the organisations we advise at Elemental CoSec, the shift is significant because it aligns more closely with how good governance actually works in practice.
Structure of the Code
A key structural change is the shift to a single unified Code, replacing the previous separate versions for different‑sized charities and creating one framework applicable to all.
A key structural change in the new Code is the shift to a single unified Code, replacing the previous separate versions for large and small‑sized charities and creating one framework applicable to all.
The Code is based on eight principles, built on the new ‘Foundation’ principle, which sets a baseline expectation that trustees understand their legal duties, commit to ongoing learning, prioritise the charity’s mission and are well-informed and engaged in their roles. The other principles are: Organisational purpose; Leadership; Ethics and culture; Decision making; Managing resources and risks; Equity, diversity and inclusion (EDI); and Board effectiveness. Each principle has outcomes, behaviours, and suggested policy, processes and practice, along with suggestions regarding evidence and assurance, which make the Code easier to navigate and apply.
The Code provides a voluntary framework, encouraging charities to adopt the ‘apply-or-explain’ approach, i.e., to adopt the Code flexibly, applying the recommended practices where relevant or explaining the deviations from the Code in their annual reports. This approach allows for adaptability based on the size and complexity of a charity.
The Code focuses on the fact that governance should not be seen as merely a compliance exercise but as a dynamic framework that supports purpose-driven, strategic leadership.
Moving Governance Away from Paperwork
Perhaps the most notable evolution in the Code is its focus on behaviours. Across all eight principles, trustees are encouraged to approach their role with curiosity, openness, constructive challenge and ethical leadership. This shift recognises that governance is relational and not just procedural.
Many charities have accumulated a large suite of governance documentation over the years but these documents often serve as reference material rather than living tools. A board may have a conflict of interest policy, for example, but the real test is whether trustees feel able to challenge each other when conflicts emerge in practice and how these conflicts are handled transparently.
The new emphasis on behaviours encourages boards to concentrate less on the volume of documentation and more on culture. In our experience, the boards that struggle most are rarely those that lack formal policies. They are the ones where trustees find it difficult to ask basic questions, where disagreement is avoided because it feels uncomfortable, or where assumptions go untested and unchallenged because no one wants to be the person who slows the meeting down. The Code is pushing boards towards more thoughtful, confident and collaborative governance, and to use the Code as a living tool which is adapted as the organisation grows or faces new challenges.
Putting Purpose Back at the Centre of Strategy
While purpose has always been fundamental to charity law, the Code encourages trustees to engage with it far more dynamically and to ensure that their behaviours align with the charity’s purpose and values. It prompts boards to look beyond their historic activities, to examine whether programmes continue to deliver genuine public benefit and to test their assumptions about what beneficiaries need today. This is a timely reminder as many organisations are facing changing patterns of demand or the challenge of maintaining impact with limited resources.
For some of the charities we support, purpose‑led governance has become a practical anchor during difficult decisions. One arts charity, facing significant financial strain, recently used a structured review of its purpose to determine which of its long‑running programmes genuinely aligned with its objectives. The result was a refocused strategy that both reduced expenditure and strengthened its impact reporting. The new Code encourages this kind of reflective, evidence‑based approach. It recommends that from time to time, the board should reflect on the charitable purposes of the charity to see if they need updating and to check that the organisation’s activities are in line with them.
Leadership and Culture as Governance Priorities
The revised Code puts enhanced focus on leadership than the previous iterations. The effectiveness of a charity often hinges on the working relationship between trustees, the chair and, where applicable, the CEO and senior staff. The Code encourages boards to reflect honestly on role clarity, trustee behaviour and the dynamics around the board table. This is an area that many boards quietly struggle with. Trustees may also be volunteers in a charity and it is important that they have clarity in the difference in their accountabilities in both roles and are given structured feedback. The board, led by the chair, needs the space to lead, create an environment in which people can contribute effectively, and provide senior staff with effective support and challenge.
The cultural expectations of trusteeship have also been clarified. Ethical considerations, how an organisation handles concerns, manages differences in opinions on the board and how openly it talks about governance are now more explicitly embedded within the Code. Many organisations still feel exposed when discussing failures or complaints but the sector is moving gradually towards greater openness. The Code reflects this shift, urging boards to view transparency not as a compliance obligation but as part of a healthy organisational culture.
From a practical perspective, culture is often the element that requires the most sustained attention but is not that easy to measure. Embedding the desired organisational culture and practices, which align with a charity’s values, needs active stewardship throughout the year. It should support safeguarding and whistleblowing and provide clear ways for stakeholders to raise concerns. Trustees are urged to conduct due diligence on partners, address power imbalances, remain transparent about failures and stay aware of how the charity is perceived, sharing cultural expectations widely across the organisation. Trustees who spend time meeting staff, seeing services first‑hand or holding informal conversations with volunteers often develop a far deeper understanding of the organisation’s realities. For some of the clients we advise, these small behavioural habits have had more impact on governance effectiveness than any formal review.
Decision Making and Risk with More Maturity
The sections on decision making and risk management have noticeably matured in the new Code. Many boards still struggle with ineffective delegation, unclear escalation routes, or board papers that are either of unsuitable length or do not contain the right information to facilitate comprehensive discussion on key issues. The new Code asks boards to think more critically about the information they receive and the decisions they reserve for themselves. It reinforces the idea that trustees cannot simply rely on volume; they must focus on clarity, relevance and comprehension.
In a number of organisations we work with, transforming board packs has been a catalyst for better governance. Providing trustees with a more focused set of financial dashboards, for example, has helped one social care charity move from reactive cost‑cutting to more strategic resource planning. The Code’s encouragement for trustees to ask questions, challenge analysis, and acknowledge the limits of their expertise supports exactly this kind of shift.
Risk management also receives more practical attention. Instead of treating the risk register as a static document updated at set intervals, the Code pushes trustees to review major and emerging risks regularly and embed risk thinking into strategic discussions. This includes people risk, reputational risk and the sustainability of funding models. For charities navigating a complex operating environment, this integrated approach can make governance discussions far more grounded.
EDI as a Long‑Term Governance Responsibility
Equity, diversity and inclusion is now treated not as an aspiration but as a structural governance responsibility. The revised Code expects boards to articulate why EDI matters in their context, set clear EDI aims and ensure progress through dedicated plans that are realistic for their resources but still meaningful. It recognises that boards with limited demographic diversity can still foster inclusive cultures, practices and behaviours by listening, learning and adapting their ways of working. Many trustees find this area personally sensitive, but the Code positions EDI as part of the board’s long‑term development rather than an annual exercise.
For several Elemental clients, the starting point has been surprisingly simple: asking whose voices are missing from discussions and how the board can bring those perspectives in. Sometimes this means structured stakeholder conversations, or a shift in recruitment practices or acknowledging that the board currently lacks the lived experience it requires. What matters, and what the Code reinforces, is intentionality.
A Moment for Reflection rather than Reinvention
The Code gives boards an opportunity to pause, consider how well their current practices support their charities’ purpose and decide where genuine improvement is needed. The Code’s apply‑or‑explain approach respects organisational diversity. But the direction of travel is clear: governance is becoming more relational, more reflective and more transparent.
For many of the organisations we support, the most valuable step is simply carving out the time for trustees to reflect on how they work together; ensuring that a purpose-led, long-term strategy is in place, which underpins the charity’s work to bring about positive impact; and to commit to finding answers where trustees are limited in their knowledge and experience. Policies will always matter, but the heart of governance lies in people, judgment, and shared purpose. The new Code provides a thoughtful framework through which charity boards can strengthen that foundation.
How Can We help
The Code brings a sharper focus on behaviours, accountability and continuous improvement – areas where practical, expert support can make a real difference. Elemental helps charity boards navigate these expectations with confidence by offering structured, accessible learning tailored to the realities of modern charity governance.
We provide:
- Training on trustees’ core duties, ensuring boards understand their legal responsibilities and behavioural expectations under the new Code.
- Specialist governance training, including ethics, culture, risk oversight and decision‑making, aligned with the Code’s eight principles.
- Bespoke programmes for boards and committees, adapted to your charity’s size, mission and governance maturity.
- Induction and refresher training, helping both new and experienced trustees embed good practice and respond to evolving standards.
- Gap Analysis against the new Code with recommended actions and assistance in embedding any improvements.
Our experienced governance professionals work across not‑for‑profit, financial services and other sectors, enabling us to design training that is practical, relevant and immediately actionable. Contact us if you’d like to explore how tailored support can strengthen your board’s effectiveness, embed the Code’s expectations and lead to lasting positive impact.
