Charity governance reviews: how to prepare for the October 2026 deadline

Written by Ben Smith | Sep 8, 2026, 11:52:00 PM

Many charities already review aspects of their governance from time to time. The Charities Amendment Act 2023 introduced a new “duty to review governance procedures” for all registered charities at least every three years. This duty now sits in section 42G of the Charities Act 2005.

The Act does not define "governance procedures", so charities should take a broad and practical approach when conducting their review. Governance procedures are likely to encompass more than just the procedures set out in a charity's constitution or trust deed. They may include board policies, delegations, conflicts of interest processes, meeting procedures, reporting processes, induction and training processes, and other systems used by the board to exercise oversight and make decisions on behalf of the charity.

While compliance with the Act is important, the review should also help identify potential issues early and ensure the organisation remains well positioned for the future.

The first deadline is in October 2026, being three years after the requirement came into effect.

As a minimum, each review must consider whether a charity’s governance procedures:

Are fit for purpose;
Assist the charity to achieve its charitable purpose; and
Assist the charity to comply with the Act.

For many organisations, this will be the first time a formal governance review has been required. Although the Act requires a review at least every three years, larger charities should consider whether more frequent reviews would be beneficial. Regular reviews can help identify governance issues early and support compliance with trustees' and officers' other legal duties.

Add value to your review

Section 42G sets a minimum scope for review. However, most charities will get more value by widening the scope beyond the bare minimum.

Examples of additional topics worth considering might include:

Structure and composition of the governing body;
Strategic direction, including reviewing key performance indicators linked to the charity's purpose;
Compliance with wider regulatory obligations;
Whether the charity's current structure remains appropriate, particularly where it owns or controls other entities.

Additional topics such as those listed above help demonstrate that the organisation is managed responsibly and is keeping pace with best practice.

How to conduct the review

There is currently limited formal guidance on how the review should be undertaken. The process is self‑directed, meaning each charity can decide what is appropriate for its size and complexity.

As a minimum, the review should check whether your governing document (trust deed, constitution or rules) and any associated bylaws or governance policies address the three mandatory considerations. This includes assessing whether the document:

clearly states the charitable purposes of your organisation;
sets out workable and clear governance procedures; and
includes up‑to‑date requirements around conflicts, decision‑making and record‑keeping.

Document your findings

Be prepared to share evidence of the review with Charities Services or Inland Revenue. A short board paper may be sufficient for smaller organisations with straightforward governance. Charities that are also incorporated societies and have recently updated their constitution for re-registration under the Incorporated Societies Act 2022 may only require a light touch review.

More complex organisations may need a comprehensive review and should consider whether professional support such as input from legal, accounting or other professional service providers might be appropriate to assist with the review.

Inland Revenue’s Tax and Social Policy Work Programme also continues to include a review of elements of the charities and not-for-profits sector as part of its wider focus on the integrity and simplification of the tax system.

When to conduct the review

When filing its annual return, a charity must confirm whether it has reviewed its governance procedures during the reporting period. Allow sufficient time to undertake a meaningful review and properly document the outcome.

Governance Review Checklist

Review Topic	Practical Steps
Mandatory s 42G Requirements
Fit for purpose	Review the governing document (constitution, trust deed or rules). Review bylaws and governance‑related policies. Check for clarity and robustness of key procedures (appointments, conflicts, decision‑making, meetings, board member inductions).
Assists in achieving charitable purpose	Confirm charitable purposes still reflect what the charity does in practice. Assess whether governance procedures support delivery of services and programmes.
Assist in complying with the Act	Review reporting, record‑keeping and other obligations under the Charities Act. E.g. this might include reviewing board minutes, annual returns, financial statements, governance records and other required filings for the last three financial years. The review should identify any gaps or deficiencies, assess compliance risk, and recommend remedial steps or changes to reporting processes. Ensure decision‑making processes and documentation meet Charities Services expectations. E.g. assessing how the board identifies conflicts of interest, records reasons for decisions, and documents how decisions further charitable purposes. The review might consider recent board minutes and resolutions and recommend changes where documentation is unclear or incomplete.
Additional Suggestions
Board Structure and Composition	Assess whether the board has the right size, skills, experience and diversity: E.g. sector knowledge, legal, accounting, fundraising, gender diversity – but don’t just take someone to tick a skills box for you. Finding the right person who will make a worthwhile contribution on your board is far more important. Sport NZ Ihi Aotearoa encourages boards to take a proactive approach to diversity, including gender diversity. Diverse boards bring broader perspectives and can lead to stronger decision-making. Consider tenure of each board member and succession planning for upcoming vacancies.
Compliance and regulatory obligations	Where relevant: Review health and safety, privacy, cybersecurity, data protection, insurance and employment policies. Tax compliance processes. E.g. GST, PAYE, WHT. Confirm financial reporting obligations, such as whether the current financial reporting framework remains appropriate, particularly if your charity has materially changed in size recently.
Commercial Structure	Identify any controlled subsidiaries (companies, trusts). Check whether investments align with charitable purpose. Confirm that commercial activities do not expose the charity's assets to unnecessary risk. Review structure for efficiency and suitability.

Is your charity ready for its governance review?

Whether your charity needs a light-touch check or a more comprehensive review, our team can help you determine the appropriate scope, review your governing documents and policies, identify any gaps, and clearly document the outcome.

To discuss how we can support your charity, contact Nigel Stirling, Tenille Burnside or Ben Smith.

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