Glossary

A glossary for the Charity Governance Code

Accountability

Accountability is the unavoidable duty to explain the ways in which an individual or group has carried out, or caused to be carried out, the obligations placed upon them by law, a governing body or constitutional document. While the discharge of these activities/obligations may be delegated to others, the obligation to account for (ie remain accountable for) the actions cannot be delegated.

Accountable

Accountability is the unavoidable duty to explain the ways in which an individual or group has carried out, or caused to be carried out, the obligations placed upon them by law, a governing body or constitutional document. While the discharge of these activities/obligations may be delegated to others, the obligation to account for (ie remain accountable for) the actions cannot be delegated.

Annual accounts

A financial report presented by the trustees of a charity to its members (and where required the Charity Commission) each year. This document will follow the Statement of Recommended Practice for charities.

Appraisal

A formal assessment of the performance over a set time frame.

Assets

An item of property owned by an organisation, regarded as having value and available to meet debts, commitments, or legacies. Assets include tangible (for example, land, property etc) and intangible items, such as reputation.

Assurance

A positive declaration intended to give confidence.

Assure

To state positively and dispel any doubts.

Audit

An official inspection of a company or organisation’s accounts by an independent body.

Beneficiary

A person who derives advantage from the activities of the charity.

Board

A group of elected or appointed individuals who are collectively responsible for the governance and strategic direction of an organisation, and who have legal liability.

Board Evaluation, Board Review

The periodic review to assess the performance of the board (and individual directors) either by itself (self-assessment) or by a third party, and indicate where improvements can be made. The chair should report to the board on the results and the board should then report the result to the members in the annual report.

Budget

A plan, expressed in financial terms, proposed by the organisation, senior management team or board, for the purpose of carrying out, for a specific period, any or all of the functions of the organisation.

Chair

Person presiding over a meeting and who ensures procedures are followed, sums up arguments, and provides leadership to the board/committee.

Charity

The Charities Act states that a charity is an institution which is for the public benefit and is established for charitable purposes only.

Charity trustee

See Trustee

Code

A set of conventions or principles governing behaviour in a given sphere.

Committee

A group of individuals who receive and consider reports from a third party and present the findings to a superior body. All committees should have appropriate and up-to-date terms of reference that are approved and reviewed by the board.

Compliance

The act of obeying an order or rule. Regulatory compliance describes the goal that organisations aspire to achieve in their efforts to ensure that they are aware of and take steps to comply with relevant laws, polices, and regulations

Conflict of interest

The basic principle regarding all trustees, is that they should not receive any benefits over and above those that are available to other beneficiaries and should not influence decisions that have a direct impact upon them. Trustees should be alert to all the circumstances where a conflict could arise.

Constitution

A charity's governing document is any document which sets out the charity's purposes and, usually, how it is to be administered. It may be a trust deed, constitution, memorandum and articles of association, conveyance, will, Royal Charter, Scheme of the Commission, or other formal document.

Consultation

The action or process of formally consulting or discussing.

Contractor

A person or company that undertakes a contract to do a job or perform a service.

Culture

The ideas, customs, and social behaviour of a particular people, society, or organisation

Delegation

Grant of authority by one party to another for agreed purpose(s). Under the legal concept of vicarious liability, the delegator remains responsible for the delegate's acts or omissions in carrying out the purpose of the delegation.

Disclosure

The action of making information known – generally, in the annual report or on the website. Examples include the activities and strategy of the charity, board composition, financial statements and so on.

Dissolution

The process of formally closing a charity or organisation.

Diversity

Diversity is about recognising, respecting and valuing people’s differences, and enabling them to contribute and realise their full potential within an inclusive culture. Among items to be considered in this context are gender, ethnicity, social and cultural background and characteristics.

Escalate

To pass a topic of concern or interest upwards in the decision-making chain.

Essential Trustee

The Essential Trustee is a key piece of the Charity Commission’s guidance for trustees. It offers clarity over legal duties, what trustees must and should do. It is available through the Charity Commissions website.

Ethics, ethical

Standards of morality and conduct of either an individual or organisation Ethos - The characteristic spirit of a culture, era, or community (or organisation) as manifested in its attitudes and aspirations.

Goals

The object of an ambition or effort; an aim or desired result.

Governance

(Corporate) governance is the system by which companies are directed and controlled. Governance Statement - A governance statement is an overview of the processes by which an organisation is directed. Typically, it is aimed at members and stakeholders in the interest of transparency, a concept that implies that stakeholders should know how the organisation is being run. Further, a governance statement is to ensure accountability of those in charge.

Governing document

See Constitution

Impact

A marked effect or influence.

Impartial

Treating all topics or people equally.

Independent

Free from outside control; not subject to another's authority or influence. See also ‘conflict of interest’

Induction

Process of initial training for new members of staff or the board. The objective of induction is to inform the new member such that he or she can become as effective as possible in their new role as soon as possible.

Legitimate

Able to be defended with logic or justification; valid.

Liability

The state of being legally responsible for something (see also ‘vicarious liability’)

Member

For a charitable company, a member is essentially a guarantor in a company limited by guarantee (CLG). Members of unincorporated associations usually become so by agreeing to abide by the bye-laws. In general, people usually become members when their name is entered in the register of members which is a formal document required of companies and other organisations. For CLG membership is limited to the subscribers to the Memorandum and to those who are admitted to membership under the rules set out in the Articles. Members under the charity definition can be the same as that for charitable companies, but they may also operate a membership or supporters scheme which provides certain benefits. Members of a charity have the right to vote and to receive information on the running of the charity.

Merger

A combination of two or more things, especially organisations, into one.

Mitigate

Make (something bad) less severe, serious, or painful.

Monitoring

Monitoring involves organisations setting up overview and scrutiny committees. Their purpose is to hold the executive to account and also to support the organisation in terms of policy development and contribute to the organisations’ leadership role through scrutiny of the organisations’ services and actions.

Officer

Person who holds a position of authority, command, or trust. Trustees and the chief executive are officers, for example.

Ongoing requirement

A requirement that continues to exist or develop.

Outcomes

The way something turns out; a consequence. Examples would be better health among the target group, or preserving a habitat.

Output

The amount of something produced. An example would be the number of people using a community service.

Oversight

The action of overseeing something.

Parent charity 

A charity that owns another organisation through governance arrangements.

Policy

see Conflict of interest

Probity

The quality of having strong moral principles; honesty and decency.

Procedures

Chronological sequence of actions. Established or specified method of dealing with or processing a particular issue or process.

Proportionate

(or proportional) correct or suitable in size, amount, or degree when considered in relation to something else

Prudence

Care, caution, and good judgment, as well as wisdom in looking ahead.

Public benefit

Benefit to the public, a requirement of charitable status. Creating a positive impact from work and benefiting a sufficiently wide group in society. Also central to Community Interest Companies and various other types of organisation.

Purposes

A charity’s ‘purpose’ is what it is set up to achieve. A charitable purpose is one that: – falls within one or more of 13 descriptions of purposes listed in the Charities Act – is for the public benefit (the ‘public benefit requirement’)

Recruitment

Action and process of enlisting people.

Register of interests

A register kept of the interests and perceived interests of trustees; the register records interests which could potentially influence official duties.

Regulator

The Charity Commission for England and Wales is the non-ministerial government department that regulates registered charities in England and Wales and maintains the Central Register of Charities.

Regulatory compliance, requirement

Regulatory compliance describes the goal that organisations endeavour to achieve in their efforts to ensure that they are aware of and take steps to comply with relevant laws, polices, and regulations.

Remuneration

Payment for work or services.

Reporting

Give an account of. For charities, this can include the annual report and information put on the website or communicated in other ways.

Reputation

The beliefs or opinions that are generally held about someone or something. If a charity has a good reputation, it is more likely to obtain funding and donations.

Reserves

Financial resources or commodities not needed for immediate use but available if and when required.

Review

A formal assessment of something with the intention of instituting change if necessary.

Risk

A situation where someone or something valued is exposed to danger, harm, or loss.

Risk management

The analysis and management of risk. Involves the identification and assessment of risk, the decision whether to accept, guard against, prevent or insure against the occurrence and the process of implementing such decisions.

Risk-averse

Disinclined or reluctant to take risks.

Role description

A broad, general, and written statement of a specific job. It generally includes details of duties, purpose, responsibilities, scope, and working conditions of a job along with the job's title, and the name or designation of the person.

SORP

Statement of Recommended Practice which outlines how charities must account for their finances.

Safeguard

Protect from harm or damage with appropriate measure(s).

Service user

Generally 'service user' means anyone who is a patient or other user of health and / or social services, but the concept extends to the beneficiaries of charities.

Skills audit

A process for measuring and recording the skills of an individual or group. The purpose is to identify the skills and knowledge that the organisation requires, as well as the skills and knowledge that the organisation currently has.

Stakeholder

A person with an interest or concern in something.

Strategy, strategic

A plan of action designed to achieve a long-term or overall aim.

Subsidiary

An organisation or company controlled by a holding organisation or company.

Sustainable

Able to continue over a period of time.

Terms of reference

The scope and limitations of an activity or group.

Trustee

Charity trustees has the same meaning as in s.177 of the 2011Act, that is, the persons having the general control and management of the administration of a charity, regardless of what they are called. For instance, in the case of an unincorporated association the management committee are its charity trustees, and in the case of a charitable company it is the directors who are the charity trustees. Trustees are legally liable for the charity.

Values

Principles or standards of behaviour; one's judgement of what is important in life.

Viability

Ability to work successfully.

Vicarious liability

Vicarious liability refers to a situation where someone is held responsible for the actions or omissions of another person. In a workplace context, an employer can be liable for the acts or omissions of its employees, provided it can be shown that they took place in the course of their employment.

Vice Chair

An honouree officer position taken by a trustee which deputises and assists the chair of the organisation.

Voluntary organisation

A group of individuals who enter into an agreement, usually as volunteers, to form a body (or organisation) to accomplish a purpose.

Volunteer

A person who works for an organisation without being paid.

Whistle-blowing

Action by which a person associated with an organisation (usually an employee) reports any wrongdoing to an external source.