Avoiding regulatory intervention: the role of good governance

Charity Commission regulatory intervention has increased significantly over the last year, according to its latest annual report and accounts for 2024-2025. We discuss how good governance can help charities avoid being next.

The Charity Commission has recently published its annual report and accounts for 2024-2025. What is clear is that regulatory intervention by the Charity Commission is increasing, with 18% more regulatory concern cases concluded during the 2024/25 financial year that the previous one. In addition, there were 25% more statutory inquiries, and the Commission have used just under 60% more inquiry powers in the 2024/25 financial year than the previous one.

Regulatory intervention can be initiated in several ways, including complaints from members of the public, staff whistleblowing, press reports or a repeated failure by the trustees to file accounts and returns on time.

The main areas of concern reported by the Commission include governance failures, safeguarding issues, mismanagement of conflicts of interest, unauthorised trustee benefits, accounting and record keeping failures, and trustees acting outside of the charitable objects.

Any form of regulatory intervention can have a detrimental impact on a charity. They can take up a significant amount of trustee and staff time and often carry cost implications if separate legal and accountancy advice is required. Not to mention the impact on beneficiaries, trustee and staff morale and the charity’s reputation. Grant agreements will often include a clause requiring a charity to disclose the fact of any regulatory intervention to a funder, which can jeopardise the grant itself and any potential future grants from that funder. If the matter is reported in the media, this can also discourage potential future donors from supporting the charity.

Our advice is to seek to prevent any form of regulatory intervention in the first place and strong, good governance foundations can help you achieve that.

How can we help?

We are well versed in advising charities on the legal and regulatory landscape that applies to them as well as best practice requirements. From reviewing and updating your existing governing documents, to providing trustee training or induction sessions, these are just a couple of ways in which we can assist. In addition, we can support you on your journey to good governance, with a governance review to identify potential areas of risk or weakness in your existing frameworks.

Our Charity Governance Health Check service

We can help you to identify areas for improvement in your existing governance with our Governance Health Check Service. We can send you a questionnaire to complete, which we will then review and assess. Following this, we can meet with you to discuss potential issues and a suggested way forward. Alternatively, we can provide a comprehensive written report on our findings and provide a list of action points for you to take forward.

If you would like to learn more about this service and how else we can support you with good governance, please get in touch with our Charities team.