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A Code for Sports Governance

Tier 1

Learn more about the requirements of the minimum level of mandatory governance requirements.

Introducing Tier 1

Tier 1 represents the minimum level of mandatory governance requirements in the Code. The requirements in this Tier seek to ensure the protection of public funding through good governance processes, without being unreasonably onerous.

UK Sport and Sport England will generally require an organisation to meet Tier 1 of the Code if they are receiving an investment which meets the following criteria:

  • it is granted on a one-off basis (for example, for a specific project which has a fixed end date); and  
  • the total amount of funding is typically between £10,0001 and £250,000.

Tier 1 of the Code may also apply to organisations at the start of what could become a longer-term partnership. Where further investment follows and the level of funding increases to a higher threshold or the type of relationship the organisation builds with UK Sport or Sport England becomes longer term, then organisations that were initially required to comply with Tier 1 may be required to progress to become compliant with Tier 2 or Tier 3 of the Code.

 

1For organisations receiving less than £10,000, Sport England and UK Sport will carry out standard due diligence checks.

Tier 1 Requirements
The list of Requirements for Tier 1 can be found below, categorised by Principle. The wording of each Requirement and the Code Commentary can be accessed by clicking the blue and/or red dropdown arrows displayed next to each section.
Principle 1: Structure
Requirement 1 - The organisation is properly constituted, has a clear purpose and, if membership-based, is inclusive and accessible. 

Why is it important?

Organisations that are set up with an appropriate structure can make decisions about their activity more effectively. That’s why it’s important to consider carefully the most suitable legal format for your organisation, taking into account the pros and cons of the various possible options. When the organisation has a clear purpose, it helps people understand what you are trying to achieve and ensures everyone can work together towards your goals. If your organisation has members, you should try to make it open and accessible so that a wide range of people can benefit from the services it provides.

There are three parts to this Requirement:

1. Properly constituted

Properly constituted means that there is a formal framework in place for your organisation to make decisions effectively. This may relate to your legal status. Organisations can take many forms, including a charity, company, social enterprise, association, community amateur sports club and others.
You do not need to set up your organisation as a company or a charity to meet this Requirement. The organisation could be an  An unincorporated association is an organisation that does not have a separate legal identitiy or structure and consists of a group of people coming together to run the activity. The process by which an unincorporated organisation becomes a company is known as incorporation.association, for example.

Whatever organisational type you are (or choose to adopt if you are just setting your organisation up or looking to change its legal form), you will likely already have some formal documentation which sets out your legal status. If you’re an unincorporated association, this might be your   A formal document setting out why the organisation exists and what it seeks to do. The governing document will explain who controls the organisation, how it operates and the governing committee that is responsible for it.
For unincorporated organisations, the governing document may be known as the constitution, statutes or rules/ regulations. If the organisation has the legal form of a company or an incorporated charity, it will be called the articles of association or constitution
, or if you’re a company or an incorporated charity, this would be your  The governing document of a company. This is a legal document which sets out the constitution.This is often referred to as the  A formal document setting out why the organisation exists and what it seeks to do. The governing document will explain who controls the organisation, how it operates and the governing committee that is responsible for it.
For unincorporated organisations, the governing document may be known as the constitution, statutes or rules/ regulations. If the organisation has the legal form of a company or an incorporated charity, it will be called the articles of association or constitution
.

The governing document will set out:

  • Why your organisation exists and the area of work it’s involved with (its objectives)
  • Who has overall control of your organisation and is responsible for making sure it’s doing what it was set up to do (they might be called the  The group of people with overall responsibility for governing the organisation and overseeing and controlling its management.
    Various other terms may be used including board, board of directors, board of governors, trustees and management committee.
    , trustees, directors, governors or  A formal way for the governing committee (often known as a board) to make and document an action or decision.members)
  • How they make decisions
  • Other rules around how the organisation operates.

Many organisations choose to set up as a company, or a charitable company, as it separates the organisation as an entity from the individuals involved. This is known as  The process by which a new or existing organisation becomes a company is known as incorporation. This can also include registration with the Charity Commission as a charitable incorporated organisation.
An unincorporated association is an organisation that does not have a separate legal structure and consists of a group of people coming together to run the activity.
Whether incorporated or unincorporated, there are significant legal implications for the organisation and those who run it. The governing committee should consider the organisation’s legal status carefully.
. As a company it will be able, for example, to enter into contracts in its own name and the responsibilities of the organisation will belong to the company instead of the individuals involved. The company structure brings practical advantages. If something goes wrong, as long as those involved in the management of the company have behaved correctly, it will be the company not the individuals who will be liable. Even if the company becomes insolvent, personal financial  The exposure or level of responsibility for an organisation or individual resulting from a course of action, particularly if something goes wrong.
Types of potential liability include:
• Financial, such as debts resulting from failure to meet contractual payments
• Legal, such as the liability for negligence
• Liabilities related to sporting responsibilities such as breach of obligations in respect of safeguarding.
will be limited. While you do not need to be set up as a company to comply with this Requirement, if you are not incorporated as a company then you should carefully consider the risks you may face without being incorporated, particularly in relation to personal liability.

If you have chosen to set up as a company, you will probably have opted for the form of a company limited by guarantee, which is the preferred type for sport organisations. There is another format known as a company limited by shares but it is used more for commercial companies. If you are thinking of either setting up or changing your organisation to a company, make sure you choose the right structure for your needs.

If you change your organisation’s status to a company, the new governing document will be your articles of association. It’s important to make sure that you merge your old constitution into the new articles to keep everything consistent and to only have one governing document.

You can set the foundation for your organisation to be well governed by setting up in the most appropriate way and having a well thought through, robust governing document. Experience suggests that well governed organisations are more likely to achieve their objectives.

2. Clear purpose

Having a clear purpose means that your organisation understands what it is trying to achieve and is focused on how you are going to get there. If you are being considered for funding by Sport England and/or UK Sport, then it is likely that your purpose fits with Sport England and/or UK Sport’s investment objectives.

When there is a clear purpose that everyone in your organisation understands, it can:

  • Aid decision-making
  • Improve the experience of your customers or participants
  • Create a sense of belonging and shared understanding
  • Make recruiting staff and volunteers easier
  • Help organisations be inclusive by reaching out to under-represented groups.

3. Inclusive and accessible membership

This section only applies to membership organisations.

The idea of inclusive and accessible membership is that your organisation actively tries to include all parts of the community in its work. More specifically, a wide and diverse range of people should access and benefit from the services your organisation provides. To be inclusive you should actively reach out to under-represented groups, and be able to show people how you are doing that.

If you have a clear reason for limiting access, for example, because your organisation exists solely to benefit a particular group in the community, you should be prepared to explain this. Think about the information you provide to potential members to ensure those who are unlikely to be eligible understand why.

Organisations that are truly inclusive take the time to consider carefully who their community and membership are, who they want it to be, and the best ways to communicate with them. Thinking seriously about diversity and accessibility means going beyond basic steps to achieve funding. Organisations should understand the needs of their audience and adapt to them.

Ways to evidence

You may need to provide evidence to demonstrate that you meet this Requirement – some examples are provided below. You are not expected to have or to supply everything listed below. Equally, the lists do not include every possible option of evidence which you may use against this Requirement. The lists are there to help you understand what type of evidence you could consider providing against this Requirement.

Evidencing being properly constituted

To evidence this part of the Requirement you could provide any of the following:

  •  A formal document setting out why the organisation exists and what it seeks to do. The governing document will explain who controls the organisation, how it operates and the governing committee that is responsible for it.
    For unincorporated organisations, the governing document may be known as the constitution, statutes or rules/ regulations. If the organisation has the legal form of a company or an incorporated charity, it will be called the articles of association or constitution
  •  The governing document of a company. This is a legal document which sets out the constitution.
  • Club rules and regulations

If you are constituted differently and you are in conversation with Sport England and/or UK Sport about funding, then just supply the evidence you do have which can show you are properly constituted.

Evidencing having clear purpose

To evidence this part of the Requirement you could provide any of the following:

  • Constitution/articles of association/club rules and regulations which formally state your organisation’s objectives and purpose
  •  A management tool that explains how the organisation will work towards its overall mission during a period of time, such as three or four years. The strategic plan identifies high-level goals and divides them into measurable targets, allocating responsibility in each area.
    Organisations often produce an operational plan, which sets out the activity for a 12-month period that will contribute to achieving the objectives in the strategic plan.
    The governing committee has overall responsibility for the strategic plan but it is important to consult members and stakeholders in preparing it
    which sets out your purpose, maybe in the form of a vision or mission statement
  •  A report that the organisation produces bringing together a summary of its activity over a 12-month period. The report is intended to be a useful resource for members and other stakeholders.
    Typical contents include:
    • Reports from the leadership
    • A summary of the main achievements of the organisation
    • Updates on different areas of activity linked to the strategic plan
    • Governance changes, such as any changes in the membership of the governing committee
    • Key decisions taken
    • Financial reports.
    Organisations may print copies of annual reports but they are frequently now only available in electronic format.
    which shows a purpose and how you have worked towards it
  • Website which describes your purpose
  • Any publication from your organisation which sets out a purpose for what your organisation is doing

Evidencing an inclusive and accessible membership

To evidence this part of the Requirement you could provide any of the following:

  • Club rules/articles of association/constitution or other governing document. This document will clearly show that the membership of your organisation is accessible and open to all (or all who fit within the group your organisation serves)
  • Membership policy which shows an inclusive and open approach to membership
  • Membership application information which evidences an open and inclusive approach
  • A membership section on your website which describes the ways in which membership is inclusive and accessible
  • Examples of how the design of your website is inclusive and accessible

Support Tools

Here are some links to useful websites for more detailed guidance or good practice examples and templates. If you use an example or template, make sure that you have researched what is right for your organisation and amend and adapt it appropriately.

Sport England
Club Matters (Sport England free resource aimed at clubs with a wealth of guidance)

- Guidance on legal structures
- Guidance on different structures
- Workshops, including on legal structures
- Online module on different organisation structures – log-in required but log-in is free

External Support tools

- Charity Commission – how to choose a structure
- Charity Commission – report on what makes an effective membership charity

National Council for Voluntary Organisations (NCVO) – free resources (although some parts of NCVO’s resources are only for paying members)

- Writing a constitution
- Legal forms for non-profits
- Guidance on membership

Requirement 2 - The governing committee meets regularly, and decision-making is recorded

Why is it important?

Your  The group of people with overall responsibility for governing the organisation and overseeing and controlling its management.
Various other terms may be used including board, board of directors, board of governors, trustees and management committee.
is the group of people that has overall responsibility for governing the organisation and overseeing its management. You might call it, for example, the board, the trustees, or simply the committee. The governing committee should hold meetings regularly and maintain a record of the decisions taken. That way, they can discuss crucial matters promptly and keep track of what is agreed.

There are two parts to this Requirement:

1. Meeting regularly

The aim of meeting regularly is so that the governing committee can consider important topics and make decisions at the right time.

You should hold at least four governing committee meetings per year and agree the dates in advance. When deciding the timetable, consider times and dates that are practical for the  A person who has responsibility for governing the organisation and overseeing and controlling its management as a member of the governing committee. Various other terms may be used including director, governor, trustees, governing committee members, management or executive committee members and board members.. Doing so helps ensure you take decisions which are inclusive and enable individuals from different backgrounds to contribute fully. For instance, more people may be able to attend meetings in the evening. Many organisations can hold meetings in person, online or by phone. You may need to check what is permitted in the organisation’s  A formal document setting out why the organisation exists and what it seeks to do. The governing document will explain who controls the organisation, how it operates and the governing committee that is responsible for it.
For unincorporated organisations, the governing document may be known as the constitution, statutes or rules/ regulations. If the organisation has the legal form of a company or an incorporated charity, it will be called the articles of association or constitution
for a meeting to be valid. Scheduling meetings to fit with calendar commitments such as the end of the organisation’s financial year may also be something to consider.

Formal committee meetings are a time to talk about the big, strategic issues and decisions for the organisation. You can take care of day-to-day work separately.

2. Recording decisions

Recording decisions means keeping a formal record of decisions the governing committee makes and who takes part in the meetings. Keeping a record can help everyone agree on what was decided and prevent arguments.

You should prepare a written record of each governing committee meeting, including who participated, any decisions made, important points raised and who is responsible for putting decisions into action.

In order for governing committee decisions to be valid, a minimum number of committee members should take part in the meeting. The governing document will generally state this minimum number, which is known as a  A fixed number or percentage of the governing committee who must participate in a meeting to make valid any decisions that are taken. Only those who are entitled to attend and vote are counted. When not enough people participate in the meeting, it is said to be inquorate and decisions made are not valid. The quorum will usually be stated in the governing document and terms of reference for committees. For example, the quorum for a committee may be 50% +1 of the committee members who are entitled to participate..

At each meeting the governing committee should check and approve the written record of the previous meeting, usually known as  A formal, written record of a meeting detailing as a minimum the key decisions taken and actions agreed, as well as who attended the meeting., to make sure they are correct.

If you are a membership organisation you may want to publish the minutes or a summary of the meeting to provide members with information about decisions made.

Ways to evidence

You may need to provide evidence to demonstrate that you meet this Requirement – some examples are provided below. You are not expected to have or to supply everything listed below. Equally, the lists do not include every possible option of evidence which you may use against this Requirement. The lists are there to help you understand what type of evidence you could consider providing against this Requirement.

Evidencing meeting regularly

To evidence this part of the Requirement you could provide any of the following:

  • The governing document, if it states that the governing committee will meet regularly
  • Four consecutive agendas or sets of  A formal, written record of a meeting detailing as a minimum the key decisions taken and actions agreed, as well as who attended the meeting.
  • A meeting schedule showing regular meetings throughout the year
  • A governance statement listing several meetings that have taken place
  • Written confirmation from a governing committee member that your organisation holds regular meetings.

Evidencing recording decisions

To evidence this part of the Requirement you could provide any of the following:

  • The  A formal document setting out why the organisation exists and what it seeks to do. The governing document will explain who controls the organisation, how it operates and the governing committee that is responsible for it.
    For unincorporated organisations, the governing document may be known as the constitution, statutes or rules/ regulations. If the organisation has the legal form of a company or an incorporated charity, it will be called the articles of association or constitution
    , if it states that the governing committee should keep records of meetings
  • Minutes of meetings
  • Action logs from meetings
  • The governing document or terms of reference stating the quorum for valid decision-making
  • Written confirmation from a governing committee member that the committee produces minutes
  • Annual attendance log at meetings

Support Tools

Here are some links to useful websites for more detailed guidance or good practice examples and templates. If you use an example or template, make sure that you have researched what is right for your organisation and amend and adapt it appropriately.

Sport England
 Club Matters is a free Sport England resource offering clubs a wealth of guidance. It can be accessed here: www.sportenglandclubmatters.co.uk(Sport England free resource aimed at clubs with a wealth of guidance

- Club planning and structures
- Good Governance (online module): log-in required (log-in is free)

 NGB stands for National Governing Body. A sport may have a recognised NGB which plays a significant role in setting the rules and regulations for participation in the sport. A list of recognised NGB can be found here: www.sportengland.org/how-we-can-help/national-governing-bodies?section=the_recognition_process(NGB) support for those sports clubs that have NGB/ Development officer assistance

- Active partnerships – support available

External Support tools

- Sports Governance Academy – meetings and decision-making (registration required but is free)
- Charity Commission – charity meetings: making decisions and voting
- Charity Commission – charities and meetings
- Locality.org – national membership network for community organisations – download the good governance PowerPoint presentation from their resources page
- NCVO – templates available for members (subscription needed)

Principle 2: People
Requirement 3 – The organisation seeks to ensure diverse viewpoints are considered and that its decision-making groups have the skills and diversity needed to operate effectively

Why is it important?

Evidence suggests that organisations whose decision-making groups are diverse are stronger, more resilient and more responsive to the needs of their participants.

Decision-making groups should reflect not only the range of participants you work with and, ideally, the wider local community, but also take into account potential new audiences and different skills. People at all levels in an organisation make decisions and there can be several different decision-making groups. For example, there may be a  The group of people with overall responsibility for governing the organisation and overseeing and controlling its management.
Various other terms may be used including board, board of directors, board of governors, trustees and management committee.
, A group of people with collective expertise who the organisation appoints to work together for a defined purpose, contributing to the overall work of the organisation. For example, a sports organisation may have an audit committee with terms of reference that give it authority to oversee financial reporting.
Sub-committees often include a mix of governing committee members and independent members who have specific expertise in the subject matter. Sub-committees generally have terms of reference and report to the governing committee.
, staff and volunteer project groups.

Diversity is not limited to the nine  These are defined by a law: the Equality Act 2010. It is against the law to discriminate against someone because of:
• Age
• Disability
• Gender reassignment
• Marriage and civil partnership
• Pregnancy and maternity
• Race
• Religion or belief
• Sex
• Sexual orientation.
defined by the Equality Act 2010, which are age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation. By seeking diverse viewpoints you can make sure that people with different skills and backgrounds, including a wide range of lived, regional and socio-economic experiences, contribute to decision-making, which can result in better conversations.

It’s important to make sure that diverse viewpoints feed into decision-making at your organisation. So, beyond ensuring that the membership of your  The group of people with overall responsibility for governing the organisation and overseeing and controlling its management.
Various other terms may be used including board, board of directors, board of governors, trustees and management committee.
 is diverse, think about other ways of capturing a range of views from the various groups of people you work with. This might be through surveys, informal groups or forums for example. When recruiting new people to your decision-making group, you should consider your organisation’s current challenges and opportunities as well as future ambitions. For example, think about whether your organisation will need some different skills and experience five years from now. Remember that soft or people skills are needed just as much as technical or professional skills.

Advertise vacancies on different platforms and networks to reach a broad range of people and, particularly, to find people with the skills and experience you are looking for. Also, think about how to make your adverts appealing, and how to communicate that you actively want to attract people from different backgrounds and with different experiences. Be careful not to put people off by over-stating the skills/experience you are looking for. For example, don’t ask for experience of your sport or of sitting on a similar committee if these aren’t really necessary. Challenge your norms to ensure that they promote equality and inclusion.

In order to accommodate volunteers from different generations, social backgrounds and cultures, you might need to take a flexible approach to roles and tasks. For example, you could consider:

  • Breaking roles down into smaller tasks so that people with less time but the right skills can get involved
  • Changing the timing and/or location of meetings so that people are not excluded (for example, shift workers or care givers).

Ways to evidence

You may need to provide evidence to demonstrate that you meet this Requirement – some examples are provided below. You are not expected to have or to supply everything listed below. Equally, the lists do not include every possible option of evidence which you may use against this Requirement. The lists are there to help you understand what type of evidence you could consider providing against this Requirement.

To evidence this Requirement you could provide any of the following:

  • Board skills matrix (a document which sets out the skills, experience, and diversity you would like and/or have on your committee currently)
  • Recruitment policy which references consideration of skills and diversity of individuals
  •  A formal, written record of a meeting detailing as a minimum the key decisions taken and actions agreed, as well as who attended the meeting. of a discussion where the organisation (for example, the governing committee) considered how to improve diversity and inclusion
  • Written confirmation from a representative of the  The group of people with overall responsibility for governing the organisation and overseeing and controlling its management.
    Various other terms may be used including board, board of directors, board of governors, trustees and management committee.
    that your organisation considers the skills and diversity required of its committee members, and how it does this
  • Organisation and role chart (including A group of people with collective expertise who the organisation appoints to work together for a defined purpose, contributing to the overall work of the organisation. For example, a sports organisation may have an audit committee with terms of reference that give it authority to oversee financial reporting.
    Sub-committees often include a mix of governing committee members and independent members who have specific expertise in the subject matter. Sub-committees generally have terms of reference and report to the governing committee.
    ) which outlines roles and responsibilities to show diverse involvement in decision-making
  • Evidence of a recruitment advertisement or a role description with references to equality, diversity and inclusion, and diversity of skills.
  • Showing evidence and examples of policies being put into practice will be important. A Sport England or UK Sport assessor may contact you in order to help form a view about whether your organisation is genuinely committed to diversity and inclusion

Support Tools
Here are some links to useful websites for more detailed guidance or good practice examples and templates. If you use an example or template, make sure that you have researched what is right for your organisation and amend and adapt it appropriately.

Sport England
 Club Matters is a free Sport England resource offering clubs a wealth of guidance. It can be accessed here: www.sportenglandclubmatters.co.uk(Sport England free resource aimed at clubs with a wealth of guidance)

- Roles and responsibilities

External Support tools

- Blog post on board composition in the post-Covid-19 environment

 NCVO stands for the National Council for Voluntary Organisations and is the umbrella body for the voluntary and community sector in England. It is a registered charity and works to support the voluntary and community sector by providing advice and resources, which can be accessed here: www.ncvo.org.uk – free resource (although some parts of NCVO’s resources are only for paying members)

- Recruitment guidance
- Equality and Human Rights Commission –  These are defined by a law: the Equality Act 2010. It is against the law to discriminate against someone because of:
• Age
• Disability
• Gender reassignment
• Marriage and civil partnership
• Pregnancy and maternity
• Race
• Religion or belief
• Sex
• Sexual orientation.

- Getting on Board (a trustee recruitment charity)
- How to recruit trustees (including their free guide, and ability to advertise with them)
- Lists of free places to advertise (including for particular skills)
- Free resources (including template adverts, role descriptions, interview questions)
- Reach Volunteering – Guidance on how to recruit trustees and diversify your governing committee

Requirement 4 - Committee members are subject to regular election and ideally should serve no more than nine years

Why is it important?

It’s natural for the situation of an organisation to change over time. That means you may need different skills and experience among the leadership. You should therefore ensure that there are regular opportunities to refresh the membership of the  The group of people with overall responsibility for governing the organisation and overseeing and controlling its management.
Various other terms may be used including board, board of directors, board of governors, trustees and management committee.
. By electing people for a set period of time, the organisation can be responsive to its members, adapt to changing circumstances and ensure it has the right people with the right skills at the right time.

There are two parts to the Requirement:

1. Regular elections

Most organisations will need to have regular elections for elected governing committee positions. A relatively common approach is to have a three-year term for each role or to have one-third of your governing committee needing to stand for re-election each year.

While it’s important to refresh the governing committee regularly, you also want to avoid all  A person who has responsibility for governing the organisation and overseeing and controlling its management as a member of the governing committee. Various other terms may be used including director, governor, trustees, governing committee members, management or executive committee members and board members.reaching the end of their maximum term at the same time. To ensure continuity, you could separate elections into different years. For example, on a committee with nine members, elections could take place for three of the roles each year. Having  Terms of service for members of the governing committee that do not all end at the same time so that the organisation is less likely to have a lot of change in its leadership in one go. For example, on a committee with nine members where each serves for three years, the terms of three members could end each year.
An organisation may have both term limits and staggered terms with the aim of balancing the need for renewal of leadership with a degree of continuity.
like this reduces the   An uncertain event that could impact the achievement of the organisation’s objectives. Risks are often divided into categories and types.

There are two broad categories:
• Strategic/organisational – risks that impact on the organisation’s strategy or sustainability, such as loss of a major income stream
• Operational – risks involving a specific area of activity, such as a serious injury to a participant.

Types of risk include:
• Financial, such as the cancellation of an event resulting in loss of expected income
• Legal, such as the organisation breaching a commercial contract
• Reputational, such as failure to deliver services to an adequate standard, resulting in criticism by members on social media
• Political, such as a change in Lottery funding policies.


Specific risks frequently cover more than one category and type. For example, cancellation of an event may be a financial, legal and reputational risk.
of the organisation seeing a lot of change in its leadership in one go.

The   A formal document setting out why the organisation exists and what it seeks to do. The governing document will explain who controls the organisation, how it operates and the governing committee that is responsible for it.
For unincorporated organisations, the governing document may be known as the constitution, statutes or rules/ regulations. If the organisation has the legal form of a company or an incorporated charity, it will be called the articles of association or constitution
should explain how the organisation appoints the governing committee and how elections take place. In many cases, only some of the committee members are elected. If you do not hold elections due to the way your organisation is set up, you should still make sure you review the leadership roles regularly. You may need to speak with UK Sport or Sport England about what to do and how this Requirement will apply to your organisation.

Most sport organisations that have members will hold a meeting of the members each year, usually referred to as the general meeting or, in the case of a company, the annual  A formal meeting of the members or stakeholders of an organisation. If it is held on an annual basis it may be referred to as the annual meeting or annual general meeting. The governing document should explain arrangements for a general meeting.
Such meetings provide an opportunity for dialogue between the governing committee and the members/stakeholders. It is also usually the meeting where votes on proposals for changes to the governing document and election of candidates to the governing committee take place.
In the case of companies and incorporated charities, there are legal Requirements associated with the general meeting, such as how the organisation should inform members that the meeting is taking place.
. Your organisation’s members will nominate candidates and vote at the meeting. Nominated candidates should have an equal opportunity to present themselves. Secret voting is preferable when there is competition for roles. You may need to make special arrangements if the election takes place with many or all participants online.

The level of participation by members in general meetings varies considerably from one organisation to another. Make sure the meeting is easy and convenient to attend so that as many of your members as possible vote in the elections.

Elections can put individuals and the organisation under pressure. Having a clear, written process may help reassure people that the vote is fair and honest. If you use an online voting system, make sure you test it carefully in advance.

2. Maximum service of nine years

It’s desirable for organisations to have changes among the governing committee members from time to time. That way, new people with different ideas can come in and authority does not remain with a small group of individuals.

Consider setting a maximum period of time that an individual can be a member of the governing committee. Although this part of the Requirement is desirable rather than essential, it’s recommended that organisations should limit the maximum number of years that an individual can serve on the governing committee to nine years in total. You might restrict each person to three terms of three years, for example.

Try to find a balance between allowing a chance for new people to be elected or appointed, while retaining committed volunteers. You could have a discussion about setting  A restriction on the length of time that an individual can serve in one or multiple non-staff roles within an organisation, whether elected or appointed. The aim is to ensure that people with different ideas can come into the organisation from time to time and that authority does not remain with a small group of individuals.

The organisation may define a term as two, three or four years and restrict the number of times an individual can be re-elected. For example, the organisation may limit governing committee members to serve no more than three terms of three years – this would equate to a total of nine years and so nine years would be the term limit
, even if you decide it’s not the right choice for the organisation at the moment. Keep checking from time to time that you are taking the right approach for your organisation.

Small organisations can find it difficult to recruit new governing committee members. Look carefully at how you can help people already involved in your organisation get ready to become governing committee members in the future. They may benefit from training or opportunities to gain more experience.

When you have vacant governing committee positions, the language you use to describe the role and where you place the notice can have a big effect. You may want to look at guidance on how best to attract a diverse range of possible candidates. (See also Requirement 3 on the need for diverse viewpoints.)

An important task for the governing committee is to make sure the organisation will be stable and still have the skills it needs when people leave. This is known as  A management exercise intended to ensure the organisation will be stable and still have the skills it needs when people at a senior level leave. Organisations should identify and develop potential future leaders. Plans should cover cases where an individual is due to finish their final term on the governing committee or will retire soon but also what happens if somebody leaves unexpectedly.
For example, an organisation should work out who would cover the functions of the chief executive if they leave. Typically, succession planning includes both the immediate response, such as identifying others internally who would take on the work on a temporary basis, as well as the longerterm approach. In this case, the organisation might search for a replacement through open recruitment.
. Sometimes you may know that an individual will finish their final term on the committee or plans to retire soon. On other occasions, a committee member moves away or leaves unexpectedly.

You should be ready to cover gaps quickly, when needed. For example, work out who would lead the organisation if the  The chair is the person who provides leadership for the organisation. This will usually be the person who leads the governing committee meetings. The chair’s primary role is to ensure that the governing committee effectively fulfils its function of governing the organisation and overseeing its management. The chair is elected or appointed as set out in the organisation’s governing document. In addition to chairing meetings of the governing committee, they will also often:
• Act as a channel of communication between the governing committee and staff
• Act as a figurehead for the organisation
• Ensure the governing committee’s decisions are implemented
• Lead on the development of the governing committee.
leaves. You may have a deputy chair already, or perhaps two people would take on different parts of the chair’s role. Later, you can also bring in new recruits but that tends to take time.

Planning further ahead, it’s a good idea to do what you can to develop the next generation of committee members. That can help the organisation continue to work effectively long into the future.

Ways to evidence
You may need to provide evidence to demonstrate that you meet this Requirement – some examples are provided below. You are not expected to have or to supply everything listed below. Equally, the lists do not include every possible option of evidence which you may use against this Requirement. The lists are there to help you understand what type of evidence you could consider providing against this Requirement.

Evidencing regular elections

To evidence this part of the Requirement you could provide any of the following:

  •  A formal document setting out why the organisation exists and what it seeks to do. The governing document will explain who controls the organisation, how it operates and the governing committee that is responsible for it.
    For unincorporated organisations, the governing document may be known as the constitution, statutes or rules/ regulations. If the organisation has the legal form of a company or an incorporated charity, it will be called the articles of association or constitution
    – sections on election of governing  A person who has responsibility for governing the organisation and overseeing and controlling its management as a member of the governing committee. Various other terms may be used including director, governor, trustees, governing committee members, management or executive committee members and board members.
  • Governing committee terms of reference
  • Governing committee recruitment policy
  •  A formal meeting of the members or stakeholders of an organisation. If it is held on an annual basis it may be referred to as the annual meeting or annual general meeting. The governing document should explain arrangements for a general meeting.
    Such meetings provide an opportunity for dialogue between the governing committee and the members/stakeholders. It is also usually the meeting where votes on proposals for changes to the governing document and election of candidates to the governing committee take place.
    In the case of companies and incorporated charities, there are legal Requirements associated with the general meeting, such as how the organisation should inform members that the meeting is taking place.
    /Annual General Meeting agenda and  A formal, written record of a meeting detailing as a minimum the key decisions taken and actions agreed, as well as who attended the meeting.showing elections taking place

Evidencing maximum service of nine years

(note that this part of the Requirement is optional)

To evidence this part of the Requirement you could provide any of the following:

  • Governing document – section on governing committee
  • Governing committee terms of reference
  • Governing committee recruitment policy
  • General meeting/Annual General Meeting agenda and minutes showing elections taking place

Support Tools
Here are some links to useful websites for more detailed guidance or good practice examples and templates. If you use an example or template, make sure that you have researched what is right for your organisation and amend and adapt it appropriately.

Sport England
 Club Matters is a free Sport England resource offering clubs a wealth of guidance. It can be accessed here: www.sportenglandclubmatters.co.uk(Sport England free resource aimed at clubs with a wealth of guidance)

- Planning & Governance
- Constitution guidelines (under templates and guides)

External Support tools

- NCVO – recruiting volunteers
- Sports Governance Academy – Questions for sports bodies – Tier 3 – Principle 2 – People (registration required but is free)
- Charity Commission – charity meetings: making decisions and voting
- Association of Summer Olympic International Federations (ASOIF) – suggested components of electoral rules and processes for international federation

Principle 3: Communication
Requirement 5 - The organisation shares information on its governance, structure, activities and financial position to enable stakeholders to have a good understanding of them

Why is it important?

By sharing information, the organisation enables   Individuals, groups or entities that have an interest in the activity of the organisation and are affected by it, or can affect it themselves. Typical examples of stakeholders for a sports organisation include:
• Participants
• Members
• Volunteers
• Staff
• Funders
• Local authorities, and many others.
to know it better. Stakeholders are people or entities that have an interest in the activity of the organisation and are affected by it. For example, they include members, participants, funders and so on. It’s important that they understand why the organisation exists, what it’s trying to do, how it functions and the results it produces.

Providing information in a transparent way helps make the organisation accountable to its stakeholders. People who know your organisation well can communicate more effectively with it and may be more likely to want to get involved.

There are many ways you can do this:

  • Your website

Many organisations find their website is the most straightforward way to share information.

You’ll probably have some basic details and important documents that change only rarely, which you can publish on the organisation’s website. For example, you could provide:

  •   A formal document setting out why the organisation exists and what it seeks to do. The governing document will explain who controls the organisation, how it operates and the governing committee that is responsible for it.
    For unincorporated organisations, the governing document may be known as the constitution, statutes or rules/ regulations. If the organisation has the legal form of a company or an incorporated charity, it will be called the articles of association or constitution
  • Strategy
  • Details of governing  A person who has responsibility for governing the organisation and overseeing and controlling its management as a member of the governing committee. Various other terms may be used including director, governor, trustees, governing committee members, management or executive committee members and board members.
  • Policies.

You can also add information that you produce each year, such as:

  • Financial accounts
  • An  A report that the organisation produces bringing together a summary of its activity over a 12-month period. The report is intended to be a useful resource for members and other stakeholders.
    Typical contents include:
    • Reports from the leadership
    • A summary of the main achievements of the organisation
    • Updates on different areas of activity linked to the strategic plan
    • Governance changes, such as any changes in the membership of the governing committee
    • Key decisions taken
    • Financial reports.
    Organisations may print copies of annual reports but they are frequently now only available in electronic format.
  • Details of any major governance changes

Beyond that, share news about decisions the organisation takes, such as in governing committee meetings. You may want to distribute some documents which are not published on the website to your members and participants by email or online.

  • Social media

Your organisation may also have social media channels, where you can provide day-to-day news about your activities and reach a wider audience. Using social media can be a practical way to exchange and connect but there are also risks, which you should consider carefully.

  • General meetings

It’s a good idea to hold some sort of  A formal meeting of the members or stakeholders of an organisation. If it is held on an annual basis it may be referred to as the annual meeting or annual general meeting. The governing document should explain arrangements for a general meeting.
Such meetings provide an opportunity for dialogue between the governing committee and the members/stakeholders. It is also usually the meeting where votes on proposals for changes to the governing document and election of candidates to the governing committee take place.
In the case of companies and incorporated charities, there are legal Requirements associated with the general meeting, such as how the organisation should inform members that the meeting is taking place.
on at least an annual basis, even if your governing document does not require it. A meeting offers a chance to communicate. You can present an update to your members and participants and also let them have their say so that they know their voices are being heard.

  • Advertising for new volunteers or staff

If you’re recruiting new volunteers or staff, you should advertise the roles openly and in the right way to reach a diverse range of candidates.

  • Sharing information with new volunteers, staff, participants or members

When people become involved with the organisation for the first time, make sure that they receive the information they need. For governing committee members, staff and volunteers, think about their induction, including any training they should have and provide packs of key documents. Consider what information will be helpful for new participants and members. Let them know where they can find out more.

Take care to give accurate and honest information about the organisation. In both written and spoken communications, use language that makes sense to people who aren’t experts in what you do.

Effective discussion with stakeholders means not only providing information but also listening and responding. Useful feedback may come in a formal way, such as in meetings or in written form but it can also be in everyday conversations. From time to time you may find it helpful to ask members, participants or other stakeholders for their views, perhaps via a survey.

Sharing information about the organisation is an essential task that takes time and effort. Remember that more is not always better. Keep stakeholders properly informed but try not to overwhelm them.

Ways to evidence
You may need to provide evidence to demonstrate that you meet this Requirement – some examples are provided below. You are not expected to have or to supply everything listed below. Equally, the lists do not include every possible option of evidence which you may use against this Requirement. The lists are there to help you understand what type of evidence you could consider providing against this Requirement.

To evidence this Requirement you could provide any of the following:

  • Organisation website – basic information, important documents, governing  A person who has responsibility for governing the organisation and overseeing and controlling its management as a member of the governing committee. Various other terms may be used including director, governor, trustees, governing committee members, management or executive committee members and board members., decisions made, news and so on
  • Organisation social media channels and pages – regular updates and links to the website
  • Annual meeting papers and  A formal, written record of a meeting detailing as a minimum the key decisions taken and actions agreed, as well as who attended the meeting.
  •  A report that the organisation produces bringing together a summary of its activity over a 12-month period. The report is intended to be a useful resource for members and other stakeholders.
    Typical contents include:
    • Reports from the leadership
    • A summary of the main achievements of the organisation
    • Updates on different areas of activity linked to the strategic plan
    • Governance changes, such as any changes in the membership of the governing committee
    • Key decisions taken
    • Financial reports.
    Organisations may print copies of annual reports but they are frequently now only available in electronic format.
    and financial accounts
  • Newsletters
  • Noticeboards
  • Role descriptions for volunteer or staff positions, advertised appropriately
  • Written statement about the organisation’s approach to sharing information (for example, a commitment to transparency with documents and important information published on the website)

Support Tools
Here are some links to useful websites for more detailed guidance or good practice examples and templates. If you use an example or template, make sure that you have researched what is right for your organisation and amend and adapt it appropriately.

 NGB stands for National Governing Body. A sport may have a recognised NGB which plays a significant role in setting the rules and regulations for participation in the sport. A list of recognised NGB can be found here: www.sportengland.org/how-we-can-help/national-governing-bodies?section=the_recognition_process support for those sports clubs that have NGB/Development officer assistance

External Support tools
Sports Governance Academy – (registration required but is free)

- Questions for sports bodies
- NCVO Knowhow – how to run a transparent organisation

Principle 4: Standards and Conduct
Requirement 6 – Conflicts of interest are recognised, managed by the chair and recorded. At least three of the people on the governing committee are neither related to, nor cohabiting with, other committee members.

Why is it important?

A  A conflict of interest occurs in an organisation when:
• An individual has a personal interest; and
• That personal interest conflicts with the interests of the sport or the organisation.
The personal interest could cover a wide range of circumstances including commercial, financial and sporting interests. It includes not only interests of an individual active in the organisation but also those of their family, close connections and businesses in which they are involved.
It is common for conflicts of interest to exist in a sports organisation. Having conflicts of interest present is not an issue as long as the conflicts of interest can be and are managed appropriately. The organisation should manage conflicts of interest so that they do not improperly influence decision-making
is a situation where a person is in a position to gain personal benefit from actions or decisions they make in their official capacity. If an organisation does not manage conflicts of interest, there is a   An uncertain event that could impact the achievement of the organisation’s objectives. Risks are often divided into categories and types.

There are two broad categories:
• Strategic/organisational – risks that impact on the organisation’s strategy or sustainability, such as loss of a major income stream
• Operational – risks involving a specific area of activity, such as a serious injury to a participant.

Types of risk include:
• Financial, such as the cancellation of an event resulting in loss of expected income
• Legal, such as the organisation breaching a commercial contract
• Reputational, such as failure to deliver services to an adequate standard, resulting in criticism by members on social media
• Political, such as a change in Lottery funding policies.


Specific risks frequently cover more than one category and type. For example, cancellation of an event may be a financial, legal and reputational risk.
that someone will not choose the best decision for the organisation because a different choice is better for them personally. Having conflicts of interest is ok as long as they are managed appropriately.

There are two parts to this Requirement:

1. Recognising, managing and recording conflicts of interest

A conflict of interest happens in a sport organisation when:

  • An individual has a personal interest; and
  • That personal interest may conflict with the interests of the sport or organisation.

The personal interest could cover a wide range of circumstances including commercial, financial and sporting interests. It includes not only interests of the governing  A person who has responsibility for governing the organisation and overseeing and controlling its management as a member of the governing committee. Various other terms may be used including director, governor, trustees, governing committee members, management or executive committee members and board members.themselves (or whoever it is in the organisation) but also those of their family, close connections and businesses in which they are involved.

For example:

  • A governing committee member’s son or daughter might be an elite competitor. If the governing committee member is involved in making a decision about selection for a team from a group that included their son or daughter, they would have a conflict of interest
  • A governing committee member might be a director of a company which has tendered to supply services to the sport organisation. If the individual is involved in making a decision about which company to appoint, they would have a conflict of interest.

If you ignore a conflict of interest, the danger is that either the individual will follow their personal interest when they are supposed to be making a decision in the best interests of the organisation or that   Individuals, groups or entities that have an interest in the activity of the organisation and are affected by it, or can affect it themselves. Typical examples of stakeholders for a sports organisation include:
• Participants
• Members
• Volunteers
• Staff
• Funders
• Local authorities, and many others.
will question the validity of the decision due to unmanaged  A conflict of interest occurs in an organisation when:
• An individual has a personal interest; and
• That personal interest conflicts with the interests of the sport or the organisation.
The personal interest could cover a wide range of circumstances including commercial, financial and sporting interests. It includes not only interests of an individual active in the organisation but also those of their family, close connections and businesses in which they are involved.
It is common for conflicts of interest to exist in a sports organisation. Having conflicts of interest present is not an issue as long as the conflicts of interest can be and are managed appropriately. The organisation should manage conflicts of interest so that they do not improperly influence decision-making
. By managing the conflict correctly, you can prevent these issues. Personal interests and conflicts will inevitably arise – it is how you deal with them that counts.

Most conflicts of interest are easy to spot. But it can help new members if you give them some guidance when they join the  The group of people with overall responsibility for governing the organisation and overseeing and controlling its management.
Various other terms may be used including board, board of directors, board of governors, trustees and management committee.
to be sure that they understand the importance of the issue and to help them to recognise when a conflict might arise. Your  The chair is the person who provides leadership for the organisation. This will usually be the person who leads the governing committee meetings. The chair’s primary role is to ensure that the governing committee effectively fulfils its function of governing the organisation and overseeing its management. The chair is elected or appointed as set out in the organisation’s governing document. In addition to chairing meetings of the governing committee, they will also often:
• Act as a channel of communication between the governing committee and staff
• Act as a figurehead for the organisation
• Ensure the governing committee’s decisions are implemented
• Lead on the development of the governing committee.
is usually responsible for managing conflicts and can also offer advice.

A useful way to manage conflicts is for each person to fill in a form on joining the governing committee. They list on the form all their personal interests which they think might conflict with the best interests of the organisation in future decisions. You can also use the form to provide guidance and to give some practical examples. Members should update the form on an annual basis, or when there are important changes. Larger organisations should retain an electronic version of all the information as a register of interests to assist monitoring.

Your chair will then be able to oversee management of conflicts of interest. They can offer advice if there is any uncertainty and make sure that members do not vote on any decision where there is a conflict. In most such cases they will also exclude the member from the discussion process.

The form is intended to help highlight potential conflicts in advance. In addition, it’s a good idea to include an agenda item on conflicts of interest at the start of every meeting. That way you can remind committee members of any conflicts of interest which have already been declared but may be particularly relevant in relation to specific agenda items. They will also have the chance to raise any new conflicts. Make a record in the meeting  A formal, written record of a meeting detailing as a minimum the key decisions taken and actions agreed, as well as who attended the meeting.of any conflicts that members declare and how they are handled.

Sport organisations that are companies or charities should also be aware of the company or charity law requirements relating to conflicts of interest.

2. At least three of the people on the governing committee are neither related to, nor cohabiting with, other committee members

People who are related to each other or who live together can often share similar interests and similar opinions. They may not be aware of the similarity of their views, but it is a common tendency and can undermine the balance of the decision-making process.

To ensure balance in decision-making, at a minimum, at least three of your governing committee members should be unrelated and not cohabiting. One way to monitor that the committee meets the Requirement is to include a statement at the end of the conflict of interest form asking each member to confirm their status.

Sometimes this part of the Requirement may prove challenging. In that case you can speak with UK Sport or Sport England about what to do and how this Requirement may apply to your organisation.

Ways to evidence
You may need to provide evidence to demonstrate that you meet this Requirement – some examples are provided below. You are not expected to have or to supply everything listed below. Equally, the lists do not include every possible option of evidence which you may use against this Requirement. The lists are there to help you understand what type of evidence you could consider providing against this Requirement.

Evidencing recognising, managing and recording  A conflict of interest occurs in an organisation when:
• An individual has a personal interest; and
• That personal interest conflicts with the interests of the sport or the organisation.
The personal interest could cover a wide range of circumstances including commercial, financial and sporting interests. It includes not only interests of an individual active in the organisation but also those of their family, close connections and businesses in which they are involved.
It is common for conflicts of interest to exist in a sports organisation. Having conflicts of interest present is not an issue as long as the conflicts of interest can be and are managed appropriately. The organisation should manage conflicts of interest so that they do not improperly influence decision-making

To evidence this part of the Requirement you could provide any of the following:

  • Declaration of interest form including an explanation of what is covered and allowing known interests to be declared
  • Register of interests which lists in one place all interests that have been declared
  • Standing item for conflicts of interest on governing committee agenda
  • Your   A formal document setting out why the organisation exists and what it seeks to do. The governing document will explain who controls the organisation, how it operates and the governing committee that is responsible for it.
    For unincorporated organisations, the governing document may be known as the constitution, statutes or rules/ regulations. If the organisation has the legal form of a company or an incorporated charity, it will be called the articles of association or constitution
    which should include clauses regarding conflicts of interest. These should include recognising conflicts of interest, recording them, and management and oversight of the process by the  The chair is the person who provides leadership for the organisation. This will usually be the person who leads the governing committee meetings. The chair’s primary role is to ensure that the governing committee effectively fulfils its function of governing the organisation and overseeing its management. The chair is elected or appointed as set out in the organisation’s governing document. In addition to chairing meetings of the governing committee, they will also often:
    • Act as a channel of communication between the governing committee and staff
    • Act as a figurehead for the organisation
    • Ensure the governing committee’s decisions are implemented
    • Lead on the development of the governing committee.
  • Conflicts of interest policy which covers all three elements – recognising, recording and management by the chair
  • Other documents which contain a conflicts of interest policy that covers all three elements – recognising, recording and management by the chair, for example a board handbook
  •  A formal, written record of a meeting detailing as a minimum the key decisions taken and actions agreed, as well as who attended the meeting.of committee meetings which show conflicts are declared and managed

Evidencing at least three people unrelated and non-cohabiting

To evidence this part of the Requirement you could provide any of the following:

  • Additional statement on declaration of interest form
  • Written confirmation from a trustee/director/ A person who has responsibility for governing the organisation and overseeing and controlling its management as a member of the governing committee. Various other terms may be used including director, governor, trustees, governing committee members, management or executive committee members and board members.that at least three of the people on the committee are unrelated and non-cohabiting

Support Tools

Here are some links to useful websites for more detailed guidance or good practice examples and templates. If you use an example or template, make sure that you have researched what is right for your organisation and amend and adapt it appropriately.

External Support tools

- Sport and Recreation Alliance guidance – conflict of interest policy
- Charity Commission – conflicts of interest: guidance for charity trustees
- Sports Governance Academy – conflicts of interest guidance (registration required but is free)

Principle 5: Policies and Processes

Requirement 7 - The organisation ensures appropriate financial procedures and practices are in place and as a minimum can evidence:
a) appropriate oversight of financial planning;
b) financial decision-making and processing is not managed by one person alone; and
c) accounts which are independently scrutinised

Why is it important?

Any organisation which receives money from other people or organisations to deliver certain objectives must ensure they use the funds for the purpose intended. Money obtained from membership subscriptions, external investment or payment for delivering services must be managed appropriately.

This Requirement covers how your organisation manages finances and the financial procedures and practices that need to be in place.

There are three parts to this Requirement:

1. Appropriate oversight of financial planning

Having appropriate oversight will give confidence in the financial security and sustainability of your organisation. It will demonstrate that you have the ability to manage money and keep the organisation going in the future.

Exactly how you carry out oversight of financial planning will depend to a great extent on the size and capacity of your organisation. The  The group of people with overall responsibility for governing the organisation and overseeing and controlling its management.
Various other terms may be used including board, board of directors, board of governors, trustees and management committee.
may be fully responsible for budgeting and monitoring finances. However, in larger organisations, it is usual for a A group of people with collective expertise who the organisation appoints to work together for a defined purpose, contributing to the overall work of the organisation. For example, a sports organisation may have an audit committee with terms of reference that give it authority to oversee financial reporting.
Sub-committees often include a mix of governing committee members and independent members who have specific expertise in the subject matter. Sub-committees generally have terms of reference and report to the governing committee.
to take a first look at the detail of financial matters and then report back to the governing committee. The subcommittee can provide a helpful, focused assessment of the financial situation.

You will need to adopt a set of financial procedures stating how you manage financial matters. It might be as simple as a few pages explaining how you pay suppliers, how people charge expenses, plus who has authority in each case. In a large organisation with substantial resources, you might have quite a few practices and procedures.

2. Financial decision-making and processing is not managed by one person alone

An important aspect of managing your finances in an appropriate way is to ensure that more than one person is involved in making financial decisions and processing transactions. This measure will not only help you guard against mistakes or, in the worst case, maladministration or even fraud, but it may also protect the individuals involved.

As an example, consider an organisation which takes payment for competition entries in cash. At the end of each day, the cash is counted and checked against the recorded entries. Imagine that one person handles the cash alone and that the figures do not add up. The organisation will have lost out and there will inevitably be concerns about the actions of that one person. If, however, two people are involved the risks are reduced because each can check the other’s work. If a problem does arise it may be easier to trace the error and correct it.

It’s a good idea to separate tasks not only for any cash transactions, but also when committing your organisation to expenditure, authorising a payment, making payments and so on. One individual should not have the ability to commit your organisation to expenditure and then authorise and pay that expenditure alone.

3. Accounts which are independently scrutinised

Your organisation should prepare accounts at a minimum on an annual basis to:

  • Provide a snapshot of your organisation’s financial position on a set date at the end of your financial period, which is known as the  A report providing a snapshot of your organisation’s financial position on a set date, usually at the end of your financial year. The balance sheet is one component of the annual accounts.
  • Give details of the income and expenditure over that period and whether it results in a profit or a loss, which is called the  A report providing details of the income and expenditure for the organisation over a period, usually one financial year, and whether that results in a profit or a loss. Also referred to as a profit and loss account. The profit and loss statement is one component of the annual accounts..

You can supplement these with  Financial statements that the organisation prepares several times per year to provide a snapshot of its financial position at a point in time. The governing committee, audit committee and senior staff may use management accounts to inform decision-making.every three months to help your  The group of people with overall responsibility for governing the organisation and overseeing and controlling its management.
Various other terms may be used including board, board of directors, board of governors, trustees and management committee.
see how the finances are progressing.

You should get someone who is  A person is independent if they are free from any close connection to the organisation and if, from the perspective of an objective outsider, they would be viewed as independent. A person may still be deemed to be independent even if they are a member of the organisation and/or play the sport. Examples of a ‘close connection’ include:
A. they are or have within the last four years been actively involved in the organisation’s affairs, for example as a representative of a specific interest group within the organisation such as a sporting discipline, a region or a home country
B. they are or have within the last four years been an employee of the organisation
C. they have close family ties with any of the organisation’s directors or senior employees.
of the person responsible for finance in the organisation and has not been involved in preparing the accounts to review them. That person should ideally be an accountant or a person with business experience who is familiar with accounts. It could be another member of your governing committee or a completely independent person. Larger organisations will appoint an accountancy firm to carry out a formal  An examination of the organisation’s annual accounts that a qualified external person carries out, independent of the organisation.
For incorporated companies and charities, there are minimum thresholds above which carrying out an external audit is a legal Requirement. Official guidance is available here:
Companies – www.gov.uk/annual-accounts/microentitiessmall-and-dormant-companies
Charities - www.gov.uk/government/publications/charity-reporting-and-accounting-the-essentials-november-2016-cc15d
For smaller organisations, an independent examination of the accounts should take place.
.

If your organisation is a company or charity, you will have specific legal obligations in relation to preparation, scrutiny and filing of the accounts. Companies House and the Charity Commission set thresholds which define requirements for the form of independent scrutiny needed for your accounts.

If you are a relatively new organisation, this part of the Requirement may prove challenging. In that case, you can speak with UK Sport or Sport England about what to do and how this Requirement may apply to your organisation.

Ways to evidence

You may need to provide evidence to demonstrate that you meet this Requirement – some examples are provided below. You are not expected to have or to supply everything listed below. Equally, the lists do not include every possible option of evidence which you may use against this Requirement. The lists are there to help you understand what type of evidence you could consider providing against this Requirement.

If the organisation is so new that there are not yet any financial statements, then Sport England or UK Sport can consider other ways you can meet the Requirement. As noted above, if this is the case then speak with Sport England or UK Sport about what to do and how this Requirement may be interpreted and applied to your organisation.

Evidencing appropriate oversight of financial planning

To evidence this part of the Requirement you could provide any of the following:

  • Financial procedures document or manual
  • Delegated authority statement
  • Meeting  A formal, written record of a meeting detailing as a minimum the key decisions taken and actions agreed, as well as who attended the meeting. showing governing committee discussions of the organisation’s finances, demonstrating their oversight role
  • Finance committee  A formal written document that defines the purpose and structures of a governing committee, sub-committee, meeting, project or similar group set up to accomplish a shared goal.

    Terms of reference typically include:
    • What has to be achieved
    • Who will take part in it, what their roles and responsibilities are
    • How it will be achieved – any resource or financial plans
    • How the group feeds into other groups, for example, if it is for a sub-committee, how does the sub-committee report up to the governing committee? How does the governing committee feed back to the sub-committee ?
    • How often will they meet? If a project, is there an end date?
    • Any risks to consider
    • How you will know if it’s successful
    • How often you’ll review the effectiveness of the group and its terms of reference
     and meeting minutes
  •  A financial plan estimating the organisation’s income and expenditure for a period of time, such as a financial year or funding cycle. In setting a budget the organisation can estimate the financial forecast if it takes a certain course of action.forecast and financial planning documents prepared for the governing committee (or minutes showing governing committee discussions of these)
  • Income/expenditure forecast
  • Cash management policy
  • Expenses policy
  • Reserves policy
  • The relevant sections of your  A formal document setting out why the organisation exists and what it seeks to do. The governing document will explain who controls the organisation, how it operates and the governing committee that is responsible for it.
    For unincorporated organisations, the governing document may be known as the constitution, statutes or rules/ regulations. If the organisation has the legal form of a company or an incorporated charity, it will be called the articles of association or constitution
     which deals with financial matters, appointment of a treasurer, banking and so on.

Evidencing financial decision-making and processing is not managed by one person alone

To evidence this part of the Requirement you could provide any of the following:

  • Financial procedures document or manual which shows that the person who processes financial transactions mustn’t be the same person who makes financial decisions or authorises expenditure
  • Delegated authority statement
  • A screen shot from your online banking showing two-person authorisation
  • A copy of a blank cheque showing space for two signatories.

Evidencing accounts are prepared and independently scrutinised

To evidence this part of the Requirement you could provide any of the following:

  • Accounts signed by  A person is independent if they are free from any close connection to the organisation and if, from the perspective of an objective outsider, they would be viewed as independent. A person may still be deemed to be independent even if they are a member of the organisation and/or play the sport. Examples of a ‘close connection’ include:
    A. they are or have within the last four years been actively involved in the organisation’s affairs, for example as a representative of a specific interest group within the organisation such as a sporting discipline, a region or a home country
    B. they are or have within the last four years been an employee of the organisation
    C. they have close family ties with any of the organisation’s directors or senior employees.
    scrutineer
  • CV or a statement of scrutineer’s qualifications/experience
  • Minutes of a governance committee meeting showing approval of the  A report setting out the financial situation of the organisation at the end of the financial year. The annual accounts include as a minimum a balance sheet, a profit and loss statement and notes listing significant accounting policies. For larger organisations the accounts will be much more extensive. Larger, incorporated organisations will undergo an external audit of the annual accounts. For smaller organisations an independent examination of the accounts should take place. Accounts that the organisation has prepared but which have not had any external review are described as unaudited.

Support Tools
Here are some links to useful websites for more detailed guidance or good practice examples and templates. If you use an example or template, make sure that you have researched what is right for your organisation and amend and adapt it appropriately.

Sport England
 Club Matters is a free Sport England resource offering clubs a wealth of guidance. It can be accessed here: www.sportenglandclubmatters.co.uk (Sport England resource aimed at clubs with a wealth of guidance)

- Getting organised with your finances

External Support tools

- Companies House – company accounts guidance
- Companies House – preparing accounts for a private limited company

Please note that HMRC and Companies House administer a joint system which is very helpful when compiling the accounts and submitting a tax return for a small company.

- Charity Commission – charity reporting and accounting: the essentials
- Sports Governance Academy – financial control (registration required but is free)

Requirement 8 - The organisation assesses and manages organisational risks and liabilities appropriately

Why is it important?

A successful sport organisation will not only have a clear purpose, but will also have thought through:

  • What could go wrong to stop it achieving its aims, which is known as   An uncertain event that could impact the achievement of the organisation’s objectives. Risks are often divided into categories and types.

    There are two broad categories:
    • Strategic/organisational – risks that impact on the organisation’s strategy or sustainability, such as loss of a major income stream
    • Operational – risks involving a specific area of activity, such as a serious injury to a participant.

    Types of risk include:
    • Financial, such as the cancellation of an event resulting in loss of expected income
    • Legal, such as the organisation breaching a commercial contract
    • Reputational, such as failure to deliver services to an adequate standard, resulting in criticism by members on social media
    • Political, such as a change in Lottery funding policies.


    Specific risks frequently cover more than one category and type. For example, cancellation of an event may be a financial, legal and reputational risk.
  • What the consequences could be if things go wrong, generally known as  The exposure or level of responsibility for an organisation or individual resulting from a course of action, particularly if something goes wrong.
    Types of potential liability include:
    • Financial, such as debts resulting from failure to meet contractual payments
    • Legal, such as the liability for negligence
    • Liabilities related to sporting responsibilities such as breach of obligations in respect of safeguarding.
    .

Anticipating what could go wrong and considering the consequences will put you in a better position to be able to take steps to avoid the problem, or at least to minimise its impact. When there are big risks that are difficult to control you can be realistic about what you are planning and decide in advance if you should go ahead. You can then move forward confidently knowing that you have thought through your plans and are able to deliver them.

There are two parts to this Requirement:

1. Organisational risk management

You may well be familiar with carrying out risk assessments for events or activities using a standard template, such as for health and safety, and thinking through the potential impact if things go wrong. This form of risk assessment is very focused on issues that could arise for a specific event or activity.

The Code Requirement is more strategic, but the basic approach is the same, namely working out what could go wrong and how to reduce the possibility of such outcomes. Managing organisational risks means that you take a real step back and look at issues relating to the organisation’s plans and its long-term sustainability. This high-level process is usually referred to as ‘organisational’ or ‘strategic’ risk management.

Organisational risk management involves three basic steps:

  • Identify what could stop you achieving your aims
  • Work out what you can do to reduce or control that risk
  • Regularly review to check if the risks have changed and to assess how well you are managing to control them.

Most sport organisations carry out this process using a  A tool for managing risk. It is usually set out in the form of a table that includes:
• Identification of risks, divided into categories
• Evaluation of likelihood and impact of each risk
• Prioritisation
• Mitigation
• Responsibility
• Time period
. Consider what high level risks could stop your organisation from achieving its purposes and record them in the table. You should also include any steps to take to reduce or control the risks, the name of the person responsible for monitoring the risk and updates on progress in controlling it. The  The group of people with overall responsibility for governing the organisation and overseeing and controlling its management.
Various other terms may be used including board, board of directors, board of governors, trustees and management committee.
should receive and review updates of the register regularly, for example every three months, and carry out a full review each year.

In the risk management exercise, think about the wide range of risks which could stop you achieving your aims. You should reflect not only on your sport targets, such as increasing participation or competitive success, but also the potential for failures in managing the wider responsibilities of a sport organisation, including your duties to volunteers and participants.

As an example, assuming that your organisation will have important  Action taken to prevent people involved in the activity of the organisation suffering from any form of harm, harassment, bullying, abuse and neglect. responsibilities, you might record in the register:

  • Risk - Failure to meet safeguarding responsibilities leading to harm to individuals (and reputational damage to the organisation)
  • Mitigation/Control – Have in place safeguarding policies and procedures setting out what steps the organisation takes to protect children, young people and adults. Policies should explain how the organisation deals with concerns raised, any codes of conduct, safe recruitment, supervision rules, educate.
  • Owner – Safeguarding lead.
  • Review - Annual review by governing committee with monitoring of changes in risk or control every three months.

2. Management of liabilities

Some of the risks that you identify in the register could lead to substantial  The exposure or level of responsibility for an organisation or individual resulting from a course of action, particularly if something goes wrong.
Types of potential liability include:
• Financial, such as debts resulting from failure to meet contractual payments
• Legal, such as the liability for negligence
• Liabilities related to sporting responsibilities such as breach of obligations in respect of safeguarding.
if you don’t reduce or control them properly. Failures could impact not only your organisation but also potentially the individuals involved.

As a sport organisation you will need to consider, for example:

  • Financial liability – where you fail to make contractual payments or fail to meet financial liabilities
  • Liability if your organisation falls below civil standards expected of you, such as in a case of negligence
  • Your responsibilities under specific sport-related regulations, such as safeguarding.

The way that the organisation is set up can have major implications on the impact of such liability. For instance, in the case of a company, it will be the company itself which will bear responsibility for commercial and financial liabilities, not the individuals involved (unless there is misconduct).
In contrast, individuals can be liable for potential costs if the sport organisation lacks a formal legal structure. When a group of people come together to run the activity, it is known as an  An unincorporated association is an organisation that does not have a separate legal identitiy or structure and consists of a group of people coming together to run the activity. The process by which an unincorporated organisation becomes a company is known as incorporation.association.

It’s important that you keep liabilities under review using the organisational  A tool for managing risk. It is usually set out in the form of a table that includes:
• Identification of risks, divided into categories
• Evaluation of likelihood and impact of each risk
• Prioritisation
• Mitigation
• Responsibility
• Time period
to inform you. All those involved in the management of your organisation should have an understanding not only of its key legal and financial obligations but also of the additional responsibilities that apply in sport. Appropriate practices and procedures should be in place to manage these responsibilities. You should also seek to obtain insurance against liabilities where possible.

If the organisation has not been set up as a company until now, be aware of the impact in terms of liabilities. It’s worth thinking about the pros and cons of the organisation’s legal status on a fairly regular basis. (See also Requirement 1 on being properly constituted.)

Ways to evidence

You may need to provide evidence to demonstrate that you meet this Requirement – some examples are provided below. You are not expected to have or to supply everything listed below. Equally, the lists do not include every possible option of evidence which you may use against this Requirement. The lists are there to help you understand what type of evidence you could consider providing against this Requirement.

Organisational risk management

To evidence this part of the Requirement you could provide any of the following:

  •  A tool for managing risk. It is usually set out in the form of a table that includes:
    • Identification of risks, divided into categories
    • Evaluation of likelihood and impact of each risk
    • Prioritisation
    • Mitigation
    • Responsibility
    • Time period
  •  An uncertain event that could impact the achievement of the organisation’s objectives. Risks are often divided into categories and types.
    There are two broad categories:
    • Strategic/organisational – risks that impact on the organisation’s strategy or sustainability, such as loss of a major income stream
    • Operational – risks involving a specific area of activity, such as a serious injury to a participant.
    Types of risk include:
    • Financial, such as the cancellation of an event resulting in loss of expected income
    • Legal, such as the organisation breaching a commercial contract
    • Reputational, such as failure to deliver services to an adequate standard, resulting in criticism by members on social media
    • Political, such as a change in Lottery funding policies.
    Specific risks frequently cover more than one category and type. For example, cancellation of an event may be a financial, legal and reputational risk.
    management strategy
  • Board minutes which include evidence of a discussion about risk management.

Management of liabilities

To evidence this part of the Requirement you could provide any of the following:

  • Evidence of a formal discussion of potential liabilities by the governance committee on an annual basis
  • Insurance policies
  • If  An unincorporated association is an organisation that does not have a separate legal identitiy or structure and consists of a group of people coming together to run the activity. The process by which an unincorporated organisation becomes a company is known as incorporation., then evidence of consideration of your organisation’s structure and potential to  Incorporation - the process by which a new or existing organisation becomes a company is known as incorporation. This can also include registration with the Charity Commission as a charitable incorporated organisation.
    An unincorporated association is an organisation that does not have a separate legal structure and consists of a group of people coming together to run the activity.
    Whether incorporated or unincorporated, there are significant legal implications for the organisation and those who run it. The governing committee should consider the organisation’s legal status carefully.
    .

In addition, there may be evidence which relates specifically to your organisation and its management of risks and liabilities. These might include:

  • Policies relating to core sporting responsibilities, including  Action taken to prevent people involved in the activity of the organisation suffering from any form of harm, harassment, bullying, abuse and neglect.
  • Register of contracts
  • Structure/community share
  • Governance committee minutes discussing potential risks
  • Financial policies
  • Evidence of  A management exercise intended to ensure the organisation will be stable and still have the skills it needs when people at a senior level leave. Organisations should identify and develop potential future leaders. Plans should cover cases where an individual is due to finish their final term on the governing committee or will retire soon but also what happens if somebody leaves unexpectedly.
    For example, an organisation should work out who would cover the functions of the chief executive if they leave. Typically, succession planning includes both the immediate response, such as identifying others internally who would take on the work on a temporary basis, as well as the longerterm approach. In this case, the organisation might search for a replacement through open recruitment.
  • Evidence of appropriate health, safety and risk training and development plans for staff and volunteers

Support Tools
Here are some links to useful websites for more detailed guidance or good practice examples and templates. If you use an example or template, make sure that you have researched what is right for your organisation and amend and adapt it appropriately.

Sport England
 Club Matters is a free Sport England resource offering clubs a wealth of guidance. It can be accessed here: www.sportenglandclubmatters.co.uk (Sport England resource aimed at clubs with a wealth of guidance)

- Example risk register and risk management policy

External Support tools

- Sport and Recreation Alliance – risk management guidance
- Charity Commission – charities and risk management
- Child Protection in Sport Unit – sample codes of conduct
- Ann Craft Trust –  Action taken to prevent people involved in the activity of the organisation suffering from any form of harm, harassment, bullying, abuse and neglect.resources
- Sports Governance Academy – risk management and control (registration required but is free

Definitions

The following are definitions of key terms which are used in this Code.

Affiliation

In the specific case of a sports organisation, affiliation is a formal connection or association between an individual or organisation and another individual or organisation. For example, a sports club may be affiliated to the relevant national governing body in the sport. The affiliation involves a combination of rights and obligations. The club may have a right to participate in a competition that the national governing body organises. In return, the club has to follow the rules of the national governing body.

Annual Accounts

A report setting out the financial situation of the organisation at the end of the financial year. The annual accounts include as a minimum a   A report providing a snapshot of your organisation’s financial position on a set date, usually at the end of your financial year. The balance sheet is one component of the annual accounts. , a   A report providing details of the income and expenditure for the organisation over a period, usually one financial year, and whether that results in a profit or a loss. Also referred to as a profit and loss account. The profit and loss statement is one component of the annual accounts. and notes listing significant accounting policies. For larger organisations the accounts will be much more extensive. Larger, incorporated organisations will undergo an   An examination of the organisation’s annual accounts that a qualified external person carries out, independent of the organisation.  
 
For incorporated companies and charities, there are minimum thresholds above which carrying out an external audit is a legal Requirement. Official guidance is available here:   
 
Companies – www.gov.uk/annual-accounts/microentitiessmall-and-dormant-companies   
 
Charities – www.gov.uk/government/publications/charity-reporting-and-accounting-the-essentials-november-2016-cc15d
 
For smaller organisations, an independent examination of the accounts should take place.
of the annual accounts. For smaller organisations an   A defined review of the accuracy of an organisation’s accounts carried out by an independent person or company, covering specific matters only. An independent examination usually costs less than an external audit. It is adequate for a smaller organisation below specific thresholds.

Official guidance is available here:

Companies – www.gov.uk/annual-accounts/microentitiessmall-and-dormant-companies

Charities – www.gov.uk/government/publications/charity-reporting-and-accounting-the-essentials-november-2016-cc15d
should take place. Accounts that the organisation has prepared but which have not had any external review are described as unaudited.

Annual Report

A report that the organisation produces bringing together a summary of its activity over a 12-month period. The report is intended to be a useful resource for members and other   Individuals, groups or entities that have an interest in the activity of the organisation and are affected by it, or can affect it themselves. Typical examples of stakeholders for a sports organisation include:
• Participants
• Members
• Volunteers
• Staff
• Funders
• Local authorities, and many others.
.

Typical contents include:

  • Reports from the leadership
  • A summary of the main achievements of the organisation
  • Updates on different areas of activity linked to the A management tool that explains how the organisation will work towards its overall mission during a period of time, such as three or four years. The strategic plan identifies high-level goals and divides them into measurable targets, allocating responsibility in each area.
    Organisations often produce an operational plan, which sets out the activity for a 12-month period that will contribute to achieving the objectives in the strategic plan.
    The governing committee has overall responsibility for the strategic plan but it is important to consult members and stakeholders in preparing it
  • Governance changes, such as any changes in the membership of the   The group of people with overall responsibility for governing the organisation and overseeing and controlling its management.
     
    Various other terms may be used including board, board of directors, board of governors, trustees and management committee.
  • Key decisions taken
  • Financial reports.

Organisations may print copies of annual reports but they are frequently now only available in electronic format.

Articles of Association

The   A formal document setting out why the organisation exists and what it seeks to do. The governing document will explain who controls the organisation, how it operates and the governing committee that is responsible for it.
For unincorporated organisations, the governing document may be known as the constitution, statutes or rules/ regulations. If the organisation has the legal form of a company or an incorporated charity, it will be called the articles of association or constitution
of a company. This is a legal document which sets out the   See governing document - a formal document setting out why the organisation exists and what it seeks to do. The governing document will explain who controls the organisation, how it operates and the governing committee that is responsible for it.
For unincorporated organisations, the governing document may be known as the constitution, statutes or rules/ regulations. If the organisation has the legal form of a company or an incorporated charity, it will be called the articles of association or constitution
.

Balance Sheet

A report providing a snapshot of your organisation’s financial position on a set date, usually at the end of your financial year. The balance sheet is one component of the   A report setting out the financial situation of the organisation at the end of the financial year. The annual accounts include as a minimum a balance sheet, a profit and loss statement and notes listing significant accounting policies. For larger organisations the accounts will be much more extensive. Larger, incorporated organisations will undergo an external audit of the annual accounts. For smaller organisations an independent examination of the accounts should take place. Accounts that the organisation has prepared but which have not had any external review are described as unaudited..

Board/Governing committee resolution

A formal way for the   The group of people with overall responsibility for governing the organisation and overseeing and controlling its management.
 
Various other terms may be used including board, board of directors, board of governors, trustees and management committee.
(often known as a board) to make and document an action or decision.

Budget

A financial plan estimating the organisation’s income and expenditure for a period of time, such as a financial year or funding cycle. In setting a budget the organisation can estimate the   An estimate of a future financial position for the organisation (or a project). In producing the estimate it is necessary to make some assumptions about income and expenditure. Forecasting is one component of setting a budget. if it takes a certain course of action.

Chair

The chair is the person who provides leadership for the organisation. This will usually be the person who leads the governing committee meetings. The chair’s primary role is to ensure that the   The group of people with overall responsibility for governing the organisation and overseeing and controlling its management.
 
Various other terms may be used including board, board of directors, board of governors, trustees and management committee.
effectively fulfils its function of governing the organisation and overseeing its management. The chair is elected or appointed as set out in the organisation’s   A formal document setting out why the organisation exists and what it seeks to do. The governing document will explain who controls the organisation, how it operates and the governing committee that is responsible for it.
For unincorporated organisations, the governing document may be known as the constitution, statutes or rules/ regulations. If the organisation has the legal form of a company or an incorporated charity, it will be called the articles of association or constitution
. In addition to chairing meetings of the governing committee, they will also often:

  • Act as a channel of communication between the governing committee and staff
  • Act as a figurehead for the organisation
  • Ensure the governing committee’s decisions are implemented
  • Lead on the development of the governing committee.

Club Matters

Club Matters is a free Sport England resource offering clubs a wealth of guidance. It can be accessed here: www.sportenglandclubmatters.co.uk

Committee member

A person who has responsibility for governing the organisation and overseeing and controlling its management as a member of the   The group of people with overall responsibility for governing the organisation and overseeing and controlling its management.
 
Various other terms may be used including board, board of directors, board of governors, trustees and management committee.
. Various other terms may be used including director, governor, trustees,  The group of people with overall responsibility for governing the organisation and overseeing and controlling its management.
 
Various other terms may be used including board, board of directors, board of governors, trustees and management committee.
members, management or executive committee members and board members.

Conflict of interest

A conflict of interest occurs in an organisation when:

  • An individual has a personal interest; and
  • That personal interest conflicts with the interests of the sport or the organisation.

The personal interest could cover a wide range of circumstances including commercial, financial and sporting interests. It includes not only interests of an individual active in the organisation but also those of their family, close connections and businesses in which they are involved.

It is common for conflicts of interest to exist in a sports organisation. Having conflicts of interest present is not an issue as long as the conflicts of interest can be and are managed appropriately. The organisation should manage conflicts of interest so that they do not improperly influence decision-making.

Constitution

See   A formal document setting out why the organisation exists and what it seeks to do. The governing document will explain who controls the organisation, how it operates and the governing committee that is responsible for it.
For unincorporated organisations, the governing document may be known as the constitution, statutes or rules/ regulations. If the organisation has the legal form of a company or an incorporated charity, it will be called the articles of association or constitution

External Audit

An examination of the organisation’s   A report setting out the financial situation of the organisation at the end of the financial year. The annual accounts include as a minimum a balance sheet, a profit and loss statement and notes listing significant accounting policies. For larger organisations the accounts will be much more extensive. Larger, incorporated organisations will undergo an   An examination of the organisation’s annual accounts that a qualified external person carries out, A person is independent if they are free from any close connection to the organisation and if, from the perspective of an objective outsider, they would be viewed as independent. A person may still be deemed to be independent even if they are a member of the organisation and/or play the sport. Examples of a ‘close connection’ include:
A. they are or have within the last four years been actively involved in the organisation’s affairs, for example as a representative of a specific interest group within the organisation such as a sporting discipline, a region or a home country
B. they are or have within the last four years been an employee of the organisation
C. they have close family ties with any of the organisation’s directors or senior employees.
of the organisation.  
 
For incorporated companies and charities, there are minimum thresholds above which carrying out an external audit is a legal Requirement. Official guidance is available here:   
 
Companies – www.gov.uk/annual-accounts/microentitiessmall-and-dormant-companies
 
Charities – www.gov.uk/government/publications/charity-reporting-and-accounting-the-essentials-november-2016-cc15d
 
For smaller organisations, an independent examination of the accounts should take place.
of the annual accounts. For smaller organisations an independent examination of the accounts should take place. Accounts that the organisation has prepared but which have not had any external review are described as unaudited.
that a qualified external person carries out, independent of the organisation.

For incorporated companies and charities, there are minimum thresholds above which carrying out an external audit is a legal Requirement. Official guidance is available here:

Companies –www.gov.uk/annual-accounts/microentitiessmall-and-dormant-companies

Charities – www.gov.uk/government/publications/charity-reporting-and-accounting-the-essentials-november-2016-cc15d

For smaller organisations, an   A defined review of the accuracy of an organisation’s accounts carried out by an independent person or company, covering specific matters only. An independent examination usually costs less than an external audit. It is adequate for a smaller organisation below specific thresholds.  

Official guidance is available here:

Companies – www.gov.uk/annual-accounts/microentitiessmall-and-dormant-companies

Charities – www.gov.uk/government/publications/charity-reporting-and-accounting-the-essentials-november-2016-cc15d
should take place.

Financial forecast

An estimate of a future financial position for the organisation (or a project). In producing the estimate it is necessary to make some assumptions about income and expenditure. Forecasting is one component of setting a budget.

General Meeting

A formal meeting of the members or   Individuals, groups or entities that have an interest in the activity of the organisation and are affected by it, or can affect it themselves. Typical examples of stakeholders for a sports organisation include:
• Participants
• Members
• Volunteers
• Staff
• Funders
• Local authorities, and many others.

of an organisation. If it is held on an annual basis it may be referred to as the annual meeting or annual general meeting. The   A formal document setting out why the organisation exists and what it seeks to do. The governing document will explain who controls the organisation, how it operates and the governing committee that is responsible for it.
For unincorporated organisations, the governing document may be known as the constitution, statutes or rules/ regulations. If the organisation has the legal form of a company or an incorporated charity, it will be called the articles of association or constitution
should explain arrangements for a general meeting.

Such meetings provide an opportunity for dialogue between the   The group of people with overall responsibility for governing the organisation and overseeing and controlling its management.
 
Various other terms may be used including board, board of directors, board of governors, trustees and management committee.
and the members/  Individuals, groups or entities that have an interest in the activity of the organisation and are affected by it, or can affect it themselves. Typical examples of stakeholders for a sports organisation include:
• Participants
• Members
• Volunteers
• Staff
• Funders
• Local authorities, and many others.
. It is also usually the meeting where votes on proposals for changes to the   A formal document setting out why the organisation exists and what it seeks to do. The governing document will explain who controls the organisation, how it operates and the governing committee that is responsible for it.
For unincorporated organisations, the governing document may be known as the constitution, statutes or rules/ regulations. If the organisation has the legal form of a company or an incorporated charity, it will be called the articles of association or constitution
and election of candidates to the   The group of people with overall responsibility for governing the organisation and overseeing and controlling its management.
 
Various other terms may be used including board, board of directors, board of governors, trustees and management committee.
take place.

In the case of companies and incorporated charities, there are legal Requirements associated with the general meeting, such as how the organisation should inform members that the meeting is taking place.

Governing Committee

The group of people with overall responsibility for governing the organisation and overseeing and controlling its management.

Various other terms may be used including board, board of directors, board of governors, trustees and management committee.

Governing Document

A formal document setting out why the organisation exists and what it seeks to do. The governing document will explain who controls the organisation, how it operates and the   The group of people with overall responsibility for governing the organisation and overseeing and controlling its management.
 
Various other terms may be used including board, board of directors, board of governors, trustees and management committee.
that is responsible for it.

For  An unincorporated association is an organisation that does not have a separate legal identitiy or structure and consists of a group of people coming together to run the activity. The process by which an unincorporated organisation becomes a company is known as incorporation.organisations, the governing document may be known as the constitution, statutes or rules/ regulations. If the organisation has the legal form of a company or an incorporated charity, it will be called the  The governing document of a company. This is a legal document which sets out the constitution. or constitution

Incorporation

The process by which a new or existing organisation becomes a company is known as incorporation. This can also include registration with the Charity Commission as a charitable incorporated organisation.

An  An unincorporated association is an organisation that does not have a separate legal identitiy or structure and consists of a group of people coming together to run the activity. The process by which an unincorporated organisation becomes a company is known as incorporation.association is an organisation that does not have a separate legal structure and consists of a group of people coming together to run the activity.

Whether incorporated or unincorporated, there are significant legal implications for the organisation and those who run it. The   The group of people with overall responsibility for governing the organisation and overseeing and controlling its management.
 
Various other terms may be used including board, board of directors, board of governors, trustees and management committee.
should consider the organisation’s legal status carefully.

Independent

A person is independent if they are free from any close connection to the organisation and if, from the perspective of an objective outsider, they would be viewed as independent. A person may still be deemed to be independent even if they are a member of the organisation and/or play the sport. Examples of a ‘close connection’ include:

A. they are or have within the last four years been actively involved in the organisation’s affairs, for example as a representative of a specific interest group within the organisation such as a sporting discipline, a region or a home country

B. they are or have within the last four years been an employee of the organisation

C. they have close family ties with any of the organisation’s directors or senior employees.

Independent examination of accounts

A defined review of the accuracy of an organisation’s accounts carried out by an  A person is independent if they are free from any close connection to the organisation and if, from the perspective of an objective outsider, they would be viewed as independent. A person may still be deemed to be independent even if they are a member of the organisation and/or play the sport. Examples of a ‘close connection’ include:
A. they are or have within the last four years been actively involved in the organisation’s affairs, for example as a representative of a specific interest group within the organisation such as a sporting discipline, a region or a home country
B. they are or have within the last four years been an employee of the organisation
C. they have close family ties with any of the organisation’s directors or senior employees.
person or company, covering specific matters only. An independent examination usually costs less than an   An examination of the organisation’s annual accounts that a qualified external person carries out, independent of the organisation.  
 
For incorporated companies and charities, there are minimum thresholds above which carrying out an external audit is a legal Requirement. Official guidance is available here:   
 
Companies – www.gov.uk/annual-accounts/microentitiessmall-and-dormant-companies
 
Charities – www.gov.uk/government/publications/charity-reporting-and-accounting-the-essentials-november-2016-cc15d
 
For smaller organisations, an independent examination of the accounts should take place.
. It is adequate for a smaller organisation below specific thresholds.

Official guidance is available here:

Companies – www.gov.uk/annual-accounts/microentitiessmall-and-dormant-companies

Charities – www.gov.uk/government/publications/charity-reporting-and-accounting-the-essentials-november-2016-cc15d

Liability

The exposure or level of responsibility for an organisation or individual resulting from a course of action, particularly if something goes wrong.

Types of potential liability include:

  • Financial, such as debts resulting from failure to meet contractual payments
  • Legal, such as the liability for negligence
  • Liabilities related to sporting responsibilities such as breach of obligations in respect of  Action taken to prevent people involved in the activity of the organisation suffering from any form of harm, harassment, bullying, abuse and neglect..

Management Accounts

Financial statements that the organisation prepares several times per year to provide a snapshot of its financial position at a point in time. The   The group of people with overall responsibility for governing the organisation and overseeing and controlling its management.
 
Various other terms may be used including board, board of directors, board of governors, trustees and management committee.
, audit committee and senior staff may use management accounts to inform decision-making.

Minutes

A formal, written record of a meeting detailing as a minimum the key decisions taken and actions agreed, as well as who attended the meeting.

NCVO

NCVO stands for the National Council for Voluntary Organisations and is the umbrella body for the voluntary and community sector in England. It is a registered charity and works to support the voluntary and community sector by providing advice and resources, which can be accessed here: www.ncvo.org.uk

NGB

NGB stands for National Governing Body. A sport may have a recognised NGB which plays a significant role in setting the rules and regulations for participation in the sport. A list of recognised NGB can be found here: www.sportengland.org/how-we-can-help/national-governing-bodies?section=the_recognition_process

Profit and loss statement

A report providing details of the income and expenditure for the organisation over a period, usually one financial year, and whether that results in a profit or a loss. Also referred to as a profit and loss account. The profit and loss statement is one component of the   A report setting out the financial situation of the organisation at the end of the financial year. The annual accounts include as a minimum a balance sheet, a profit and loss statement and notes listing significant accounting policies. For larger organisations the accounts will be much more extensive. Larger, incorporated organisations will undergo an external audit of the annual accounts. For smaller organisations an independent examination of the accounts should take place. Accounts that the organisation has prepared but which have not had any external review are described as unaudited..

Protected Characteristics

These are defined by a law: the Equality Act 2010. It is against the law to discriminate against someone because of:

  • Age
  • Disability
  • Gender reassignment
  • Marriage and civil partnership
  • Pregnancy and maternity
  • Race
  • Religion or belief
  • Sex
  • Sexual orientation.

Quorum

A fixed number or percentage of the   The group of people with overall responsibility for governing the organisation and overseeing and controlling its management.  
 
Various other terms may be used including board, board of directors, board of governors, trustees and management committee.
who must participate in a meeting to make valid any decisions that are taken. Only those who are entitled to attend and vote are counted. When not enough people participate in the meeting, it is said to be inquorate and decisions made are not valid. The quorum will usually be stated in the   A formal document setting out why the organisation exists and what it seeks to do. The governing document will explain who controls the organisation, how it operates and the governing committee that is responsible for it.
For unincorporated organisations, the governing document may be known as the constitution, statutes or rules/ regulations. If the organisation has the legal form of a company or an incorporated charity, it will be called the articles of association or constitution
and  A formal written document that defines the purpose and structures of a governing committee, sub-committee, meeting, project or similar group set up to accomplish a shared goal.

Terms of reference typically include:
• What has to be achieved
• Who will take part in it, what their roles and responsibilities are
• How it will be achieved – any resource or financial plans
• How the group feeds into other groups, for example, if it is for a sub-committee, how does the sub-committee report up to the governing committee? How does the governing committee feed back to the sub-committee ?
• How often will they meet? If a project, is there an end date?
• Any risks to consider
• How you will know if it’s successful
• How often you’ll review the effectiveness of the group and its terms of reference
for committees. For example, the quorum for a committee may be 50% +1 of the A person who has responsibility for governing the organisation and overseeing and controlling its management as a member of the governing committee. Various other terms may be used including director, governor, trustees, governing committee members, management or executive committee members and board members.who are entitled to participate.

Risk

An uncertain event that could impact the achievement of the organisation’s objectives. Risks are often divided into categories and types.

There are two broad categories:

  • Strategic/organisational – risks that impact on the organisation’s strategy or sustainability, such as loss of a major income stream
  • Operational – risks involving a specific area of activity, such as a serious injury to a participant.

Types of risk include:

  • Financial, such as the cancellation of an event resulting in loss of expected income
  • Legal, such as the organisation breaching a commercial contract
  • Reputational, such as failure to deliver services to an adequate standard, resulting in criticism by members on social media
  • Political, such as a change in Lottery funding policies.

Specific risks frequently cover more than one category and type. For example, cancellation of an event may be a financial, legal and reputational risk.

Risk register

A tool for managing   An uncertain event that could impact the achievement of the organisation’s objectives. Risks are often divided into categories and types.

There are two broad categories:
• Strategic/organisational – risks that impact on the organisation’s strategy or sustainability, such as loss of a major income stream
• Operational – risks involving a specific area of activity, such as a serious injury to a participant.

Types of risk include:
• Financial, such as the cancellation of an event resulting in loss of expected income
• Legal, such as the organisation breaching a commercial contract
• Reputational, such as failure to deliver services to an adequate standard, resulting in criticism by members on social media
• Political, such as a change in Lottery funding policies.


Specific risks frequently cover more than one category and type. For example, cancellation of an event may be a financial, legal and reputational risk.
. It is usually set out in the form of a table that includes:

  • Identification of risks, divided into categories 
  • Evaluation of likelihood and impact of each risk
  • Prioritisation
  • Mitigation
  • Responsibility
  • Time period

Safeguarding

Action taken to prevent people involved in the activity of the organisation suffering from any form of harm, harassment, bullying, abuse and neglect.

Socio-environmental factors

To consider socio-environmental factors means to think through and understand the impact on the environment and on society of any decisions an organisation may make. For example, an organisation may need to consider the impact on the environment of its travel policy, or the impact on society and the local community of building a new office.

Staggered terms

Terms of service for members of the governing committee that do not all end at the same time so that the organisation is less likely to have a lot of change in its leadership in one go. For example, on a committee with nine members where each serves for three years, the terms of three members could end each year.

An organisation may have both   A restriction on the length of time that an individual can serve in one or multiple non-staff roles within an organisation, whether elected or appointed. The aim is to ensure that people with different ideas can come into the organisation from time to time and that authority does not remain with a small group of individuals.
The organisation may define a term as two, three or four years and restrict the number of times an individual can be re-elected. For example, the organisation may limit governing committee members to serve no more than three terms of three years – this would equate to a total of nine years and so nine years would be the term limit
and staggered terms with the aim of balancing the need for renewal of leadership with a degree of continuity.

Stakeholders

Individuals, groups or entities that have an interest in the activity of the organisation and are affected by it, or can affect it themselves. Typical examples of stakeholders for a sports organisation include:

  • Participants
  • Members
  • Volunteers
  • Staff
  • Funders
  • Local authorities, and many others.

Statutes

See   A formal document setting out why the organisation exists and what it seeks to do. The governing document will explain who controls the organisation, how it operates and the governing committee that is responsible for it.
For unincorporated organisations, the governing document may be known as the constitution, statutes or rules/ regulations. If the organisation has the legal form of a company or an incorporated charity, it will be called the articles of association or constitution

Strategic Plan

A management tool that explains how the organisation will work towards its overall mission during a period of time, such as three or four years. The strategic plan identifies high-level goals and divides them into measurable targets, allocating responsibility in each area.

Organisations often produce an operational plan, which sets out the activity for a 12-month period that will contribute to achieving the objectives in the strategic plan.

The governing committee has overall responsibility for the strategic plan but it is important to consult members and   Individuals, groups or entities that have an interest in the activity of the organisation and are affected by it, or can affect it themselves. Typical examples of stakeholders for a sports organisation include:
• Participants
• Members
• Volunteers
• Staff
• Funders
• Local authorities, and many others.
in preparing it

Sub-committee

A group of people with collective expertise who the organisation appoints to work together for a defined purpose, contributing to the overall work of the organisation. For example, a sports organisation may have an audit committee with terms of reference  A formal written document that defines the purpose and structures of a governing committee, sub-committee, meeting, project or similar group set up to accomplish a shared goal.

Terms of reference typically include:
• What has to be achieved
• Who will take part in it, what their roles and responsibilities are
• How it will be achieved – any resource or financial plans
• How the group feeds into other groups, for example, if it is for a sub-committee, how does the sub-committee report up to the governing committee? How does the governing committee feed back to the sub-committee ?
• How often will they meet? If a project, is there an end date?
• Any risks to consider
• How you will know if it’s successful
• How often you’ll review the effectiveness of the group and its terms of reference
 that give it authority to oversee financial reporting.

Sub-committees often include a mix of governing  A person who has responsibility for governing the organisation and overseeing and controlling its management as a member of the governing committee. Various other terms may be used including director, governor, trustees, governing committee members, management or executive committee members and board members. and  A person is independent if they are free from any close connection to the organisation and if, from the perspective of an objective outsider, they would be viewed as independent. A person may still be deemed to be independent even if they are a member of the organisation and/or play the sport. Examples of a ‘close connection’ include:
A. they are or have within the last four years been actively involved in the organisation’s affairs, for example as a representative of a specific interest group within the organisation such as a sporting discipline, a region or a home country
B. they are or have within the last four years been an employee of the organisation
C. they have close family ties with any of the organisation’s directors or senior employees.
who have specific expertise in the subject matter. Sub-committees generally have  A formal written document that defines the purpose and structures of a governing committee, sub-committee, meeting, project or similar group set up to accomplish a shared goal.

Terms of reference typically include:
• What has to be achieved
• Who will take part in it, what their roles and responsibilities are
• How it will be achieved – any resource or financial plans
• How the group feeds into other groups, for example, if it is for a sub-committee, how does the sub-committee report up to the governing committee? How does the governing committee feed back to the sub-committee ?
• How often will they meet? If a project, is there an end date?
• Any risks to consider
• How you will know if it’s successful
• How often you’ll review the effectiveness of the group and its terms of reference
and report to the governing committee.

Succession planning

A management exercise intended to ensure the organisation will be stable and still have the skills it needs when people at a senior level leave. Organisations should identify and develop potential future leaders. Plans should cover cases where an individual is due to finish their final term on the governing committee or will retire soon but also what happens if somebody leaves unexpectedly.

For example, an organisation should work out who would cover the functions of the chief executive if they leave. Typically, succession planning includes both the immediate response, such as identifying others internally who would take on the work on a temporary basis, as well as the longerterm approach. In this case, the organisation might search for a replacement through open recruitment.

Term limits

A restriction on the length of time that an individual can serve in one or multiple non-staff roles within an organisation, whether elected or appointed. The aim is to ensure that people with different ideas can come into the organisation from time to time and that authority does not remain with a small group of individuals.

The organisation may define a term as two, three or four years and restrict the number of times an individual can be re-elected. For example, the organisation may limit governing  A person who has responsibility for governing the organisation and overseeing and controlling its management as a member of the governing committee. Various other terms may be used including director, governor, trustees, governing committee members, management or executive committee members and board members.to serve no more than three terms of three years – this would equate to a total of nine years and so nine years would be the term limit

Terms of reference

A formal written document that defines the purpose and structures of a governing committee, A group of people with collective expertise who the organisation appoints to work together for a defined purpose, contributing to the overall work of the organisation. For example, a sports organisation may have an audit committee with terms of reference that give it authority to oversee financial reporting.
Sub-committees often include a mix of governing committee members and independent members who have specific expertise in the subject matter. Sub-committees generally have terms of reference and report to the governing committee.
, meeting, project or similar group set up to accomplish a shared goal.

Terms of reference typically include:

  • What has to be achieved
  • Who will take part in it, what their roles and responsibilities are
  • How it will be achieved – any resource or financial plans
  • How the group feeds into other groups, for example, if it is for a A group of people with collective expertise who the organisation appoints to work together for a defined purpose, contributing to the overall work of the organisation. For example, a sports organisation may have an audit committee with terms of reference that give it authority to oversee financial reporting.
    Sub-committees often include a mix of governing committee members and independent members who have specific expertise in the subject matter. Sub-committees generally have terms of reference and report to the governing committee.
    , how does the A group of people with collective expertise who the organisation appoints to work together for a defined purpose, contributing to the overall work of the organisation. For example, a sports organisation may have an audit committee with terms of reference that give it authority to oversee financial reporting.
    Sub-committees often include a mix of governing committee members and independent members who have specific expertise in the subject matter. Sub-committees generally have terms of reference and report to the governing committee.
    report up to the governing committee? How does the governing committee feed back to the A group of people with collective expertise who the organisation appoints to work together for a defined purpose, contributing to the overall work of the organisation. For example, a sports organisation may have an audit committee with terms of reference that give it authority to oversee financial reporting.
    Sub-committees often include a mix of governing committee members and independent members who have specific expertise in the subject matter. Sub-committees generally have terms of reference and report to the governing committee.
    ?
  • How often will they meet? If a project, is there an end date?
  • Any risks to consider
  • How you will know if it’s successful
  • How often you’ll review the effectiveness of the group and its terms of reference

Unincorporated

An unincorporated association is an organisation that does not have a separate legal identitiy or structure and consists of a group of people coming together to run the activity. The process by which an unincorporated organisation becomes a company is known as  The process by which a new or existing organisation becomes a company is known as incorporation. This can also include registration with the Charity Commission as a charitable incorporated organisation.
An unincorporated association is an organisation that does not have a separate legal structure and consists of a group of people coming together to run the activity.
Whether incorporated or unincorporated, there are significant legal implications for the organisation and those who run it. The governing committee should consider the organisation’s legal status carefully.
.

Further Resources and Information
A PDF version of ‘A Code for Sports Governance – Tier 1’ can be downloaded here.
To note, this document is digitally accessible providing the reader with the following functionality:
  • Contents Page: All sections and sub-sections within the contents page are hyperlinked to take you directly to your preferred destination
  • Definitions: clicking on these words in bold red will automatically take you to the Definitions page
  • Support Tools: links to useful websites for more detailed guidance or good practice examples and templates are embedded into the document and can be accessed by clicking the words in bold blue
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