Governance in charitable independent schools: what’s on the agenda?

Governors of charitable schools must navigate the fine line between setting strategy and overseeing compliance, while avoiding hands-on involvement. That challenge is compounded by growing regulatory demands, rigorous inspection regimes and complex compliance requirements. These significant and time-consuming demands on unpaid charity trustees must be managed alongside competing demands on their time, be it professional commitments or otherwise.

This article suggests practical steps to review and strengthen governance systems and help boards lead effectively.

References to governors in this article refer to the individuals holding the position of charity trustee within a charity operating an independent school.

Asking the question: are we getting governance right?

Boards often do not ask this fundamental question, but an evaluation of governance systems should be a regular fixture on the calendar, and it is recommended to carry out a review at least once every three years.

The review could be an internal one and use the various tools out there, be it the Association of Governing Bodies of Independent Schools (AGBIS) resources, tools available for the charity sector such as the recently updated Charity Governance Code, or specialist governance advisers.

Governance reviews can be paper-based and examine policies and procedures, schedules of delegation and board minutes. It is this aspect of a governance review that we often advise on. More commonly, a governance review will assess the softer aspects of governance and consider the board dynamic and culture alongside systems of governance.

Questions that any review might cover include:

• What are the strengths and weaknesses of our committee structure?
• Should we update our governing document?
• Are governors receiving the information they need in the most efficient way? Is there a governance handbook for governors?
• Do we need to update the chair's role description and any role description for officers?
• How are we handling board recruitment and induction and could we make changes?
• How do we appraise governors (including the chair) and how frequently does this happen?
• Are we doing enough succession planning?
• What does diversity mean for our board and are we meeting any targets we have set ourselves in relation to diversity?
• Are we delegating the right decisions for our board and how is any exercise of delegated authority reported to the board?
• What is our board culture, and do we have any concerns with the board dynamic?

The updated Charity Governance Code is usable, not overly long and will have application to the circumstances of many charities operating independent schools.

While not mandatory, boards are encouraged to adopt a ‘comply or explain’ approach to the Code and its principles have been endorsed by the Charity Commission. The Code is structured around eight principles (eg organisational purpose, leadership and decision-making to name three), and under each principle there are suggested behaviours, a section on policy, processes and practice and then a list of suggested evidence and assurance.

One tool that can be particularly useful to guide the expectations on governors is a Code of Conduct. While being primarily about behaviours and expectations on governors to give due time and attention to their role, it can also be used to clarify what is expected of governors. A Code of Conduct should set clear expectations as to performance, confidentiality, conflicts and safeguarding and be actively upheld. Where a Code of Conduct is actively upheld, it is particularly useful in facilitating discussion where an issue has arisen. Chairs, in particular, should not shy away from using it to guide difficult conversations with individuals about board performance.

Who does what: avoiding overreach

In addition to reviewing systems of governance, governors should regularly review the delegations that they make to committees and staff and consider whether any changes to those delegations are necessary.

Good delegation offers clarity as to who does what and better supports governors to act strategically and avoid any drift into operational matters.

The key tool for good delegation is the Scheme of Delegation. It defines authority, reduces duplication, and helps governors demonstrate that they have the management and control over the charity. Key to a successful Scheme of Delegation is the detail. Clear financial thresholds, timing expectations, escalation routes and reporting expectations are key to its usefulness. Practically speaking, keeping it accessible and updated will also help to embed it.

Recruitment and payment of school governors

Schools often mention the difficulty in recruiting governors given the time commitment involved, the legal responsibilities and the lack of remuneration.

The restrictions on paying governors are often mentioned as contributing to concerns around governance within independent schools.

We are frequently asked to advise on whether a governor who is carrying a particularly heavy load, be it the chair or the safeguarding governor, can be remunerated for performing their role. Notwithstanding the extensive time commitment made by those individuals, the answer to that question is usually no.

The fiduciary duties of charity trustees prevent trustees from receiving any benefit from acting as a trustee unless benefit is expressly authorised in the charity's governing document or where it constitutes a reasonable expense incurred by a charity trustee.

The upshot of this is that it is usually not possible to pay a governor for acting as a charity trustee. It is, however, possible to pay a governor for providing goods or services to the school and there is a statutory power that permits this, subject to particular conditions being satisfied. It is also possible in many circumstances to compensate a charity trustee for loss of earnings.   

Where there is no power to pay a governor, the bar for obtaining Charity Commission consent to authorise remuneration is high. An application is required to the Charity Commission that explains why consent would be in the school's best interests. The application process also requires consideration of whether there are viable alternatives to payment and how conflicts will be managed. The Charity Commission can be sympathetic to charities with a genuine need to pay a trustee and may grant, usually time-limited, approval in urgent, specific circumstances where no alternatives exist. An example might include retaining a chair or key trustee during a critical restructure.

Updated Charity Commission guidance (April 2025) provides advice on this issue. Payment of trustees remains exceptional, and while there are good arguments in favour of remunerating some governors (such as securing greater diversity on a board), we expect it is unlikely the Charity Commission will move from its current approach, given its clear foundations in the case law.

Given the likelihood that there will be no change to approach, we would query whether schools should instead consider whether there are governance changes that could be made to reduce the time commitment on school governors while ensuring governors remain the individuals with the management and control of the school charity.

In summary

Governance concerns often emerge during times of crisis and then are addressed in the aftermath. However, robust governance systems invariably make major issues easier to manage and therefore regular consideration of governance and evaluation of the systems in place are part and parcel of creating a resilient organisation.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, February 2026