The Charities Governance Code: New Compliance Reporting in 2021

PUBLISHED: 20th November 2020

Charities registered in Ireland will be required to submit their first report on compliance with the Charities Governance Code in 2021.

In 2018 the Charities Regulator in Ireland launched the Charities Governance Code (the Code).  2020 is the first year that registered charities should comply with the Code.  

From 2021, charities will be required to submit a report on their compliance with the Code with their Annual Report.

Requirement for Compliance Report from 2021

Under the Charities Act 2009, every registered charity in Ireland is required to submit an Annual Report to the Charities Regulator within ten months of the charity’s financial year-end.  From 2021, charities will be required to submit a declaration in relation to compliance with the Code with their Annual Report.

A charity will be required to declare if, at the time of filing its Annual Report: 

1. If the charity is fully compliant with the Code (Declaration A).
2. If the charity is partially compliant with the Charities Governance Code.  It can provide an explanation as to why it is not fully compliant (Declaration B).
3. If the charity has not begun to implement the Code.  An explanation can be provided as to why it is not in compliance with the Code (Declaration C).

What will be Displayed on the Register of Charities?

It is envisaged that whether or not the compliance status of a charity will only appear on the Register of Charities will depend on the declaration that has been submitted.

1. Fully compliant with the Code (Declaration A):  will be publicly displayed on the Register from the date that the Annual Report is filed.
2. Partially compliant with the Code (Declaration B):  will not be publicly visible on the Register unless a charity specifically requests that it is shown with the reason(s) for partial compliance.  This gives charities an opportunity to explain why they are not fully compliant with the Code and to highlight that they are close to resolving any compliance issues.
3. Has not begun to implement the Code (Declaration C):  will not be visible on the Register.

It is expected that charities will be able to update their compliance status following the submission of their Annual Report in 2021 so that charities do not have to wait until their 2022 Annual Report to have their fully-compliant status reflected on the Register.

Monitoring

The Charities Regulator will be monitoring compliance with the Code and the explanations provided for partial or non-compliance.  This will enable the Regulator to identify common reasons for non-compliance and provide further guidance to charities.  The emphasis will be on providing advice and guidance in relation to meeting the standards set out in the Code.

Importance of Minute Taking

To demonstrate compliance with the Code, all charities must complete a Compliance Record Form and update it every year.  The form does not need to be submitted to the Charities Regulator, but the Regulator may request it at any time.

The minimum expected of all charities is to discuss and agree at board meetings how they will meet the standards of the Code and to document their decisions in the minutes.  The Compliance Record Form should record the actions taken to meet each standard of the Code and all minutes of meetings relevant to each standard of the Code.  

It is very important that the Company Secretary of a charity has the skills and resources to take accurate minutes, maintain a record of all meetings held, matters discussed, decisions taken, and actions agreed.

For more information on the role of the secretary in a charity, please refer to our article Charities in Ireland: The Role of a Company Secretary or contact with one of our Company Secretaries.

Conclusion

Considering the new declarations of compliance to be submitted to the Charities Regulator commencing in 2021, charities should ensure that their records of meetings are in good order and reflect that the standards of the Code are being addressed by the Board of Trustees and/or Directors.

LK Shields has a team of dedicated Company Secretaries with a wide range of experience in the charities and non-profit sector in Ireland.  If you would like assistance with any of the matters discussed in this article, please contact us.