A–Z of governance terms

Accountability	The obligation of an individual or organisation to account for its activities, accept responsibility for them and to disclose the results to appropriate stakeholders in a transparent manner.
Accounting reference date	The ARD is the end of the financial year and the accounts are made up to this date.
Accruals	The accruals basis of accounting requires the non-cash effects of transactions and other events to be reflected in the financial statements for the accounting period in which they occur and not during the period when the cash is paid or received.
Agenda	The document setting out the items, matters or topics which are to be discussed during a meeting, and the order in which they will be discussed. An agenda may also contain such information as: the time allotted to each item, the action required of the board, papers accompanying each item, and the person responsible for taking the lead for each item.
Alternate	A person formally appointed to represent someone (often a director) at meetings, who assumes the responsibilities and duties of the appointor when acting in that capacity.
Annual accounts	The accounts prepared to fulfil the directors’ duty to present audited accounts to members in respect of each financial year.
Annual general meeting	A yearly general meeting of the members of a company or other organisation.
Annual report	The report and accounts which are prepared to fulfil the directors’ duty to present accounts to members in respect of each financial year.
Annual return	Also known as the ‘confirmation statement’. It is a form filed each year with the Registrar of Companies and/or with the Charity Commission, confirming specified information and/or updating those details.
Asset	An item of property regarded as having value and available to meet debts and commitments.
Assurance	A positive declaration intended to give confidence. A structured approach to ensuring quality of information or processes.
Audit	The independent examination of, and expression of opinion on, an organisation’s accounts.
Audit committee	A committee of the board which is in charge of overseeing financial reporting and disclosure.

Board	The governing body of an organisation. This may be called ‘the board’, ‘the board of directors’, ‘the board of governors’, ‘the trustees’, ‘the management committee’ or another name. It is the body with overall responsibility for governing the organisation and overseeing its management.
Board assurance framework	A structured approach to ensure the right information is obtained to a given level of quality and to enable the board or others to triangulate information and have confidence in it.
Board evaluation	A process to assess the performance of the board. Can be carried out both internally and externally.
Board papers	A collection of reports and other information in a presentable and digestible form, related to agenda items, to apprise board members of all relevant data and factors to consider.
Board resolution	A decision of the board.
Bribery	The offering, giving, receiving or soliciting of any item of value to influence the actions of a person who has a legal duty.

Cash flow statement	A financial summary of all of the cash receipts and payments over an accounting period.
Chair	(Also chairman, chairwoman, chairperson) A person chosen to preside over a group such as a board, a committee or working group. In addition to ensuring that the board fulfils its function of governing the organisation and chairing its meetings, the chair also acts as a figurehead.
Charitable incorporated organisation (CIO)	A legal form for a charity, regulated only by the Charity Commission and where trustees have limited liability. Useful especially for smaller charities.
Charitable objects	'Objects' describe and identify the purpose for which a charity has been set up. They are usually set out in a single clause or paragraph (the 'objects clause') in the governing document.
Charity Commission	The Charity Commission for England and Wales is the non-ministerial government department that regulates registered charities in England and Wales and maintains the Central Register of Charities.
Child Protection in Sport Unit (CPSU)	A partnership between the National Society for the Prevention of Cruelty to Children (NSPCC), Sport England, Sport Northern Ireland and Sport Wales who work with national governing bodies (NGBs), active partnerships and other organisations to help minimise the risk of child abuse during sporting activities.
Close family ties	Those family members who may be expected to influence, or be influenced by, that person in their dealings with the entity and include that person’s children and spouse or domestic partner, children of that person’s spouse or domestic partner and dependents of that person or that person’s spouse or domestic partner.
Code for Sports Governance	The code developed by Sport England and UK Sport, detailing good governance practice and setting the requirements to be met by all organisations in receipt of public funding.
Code of conduct	The standards and behaviour that are expected.
Committee	A group of people appointed for a specific function by a larger group and typically consisting of members of that group.
Companies Act 2006	The main piece of legislation which governs company law in the UK.
Companies House	The UK Registrar of Companies.
Company limited by guarantee (CLG)	A company, primarily seen in the not for profit sector, owned by the members who agree to pay a set amount of the company’s debts in the event of it being wound up.
Company secretary	An officer of the company who has a number of statutory duties, and usually with an advisory as well as an operational role. The secretary can be a corporate body.
Compliance	The process of making sure your organisation follows the laws, regulations, standards and ethical practices that apply to your organisation.
Connected person	Defined in company and charity law and relating to conflicts of interest. Those people who are connected to an individual in the organisation (relatives, friends or business associates, for example) may have interests which conflict with the duties and responsibilities of that individual.
Consistency	Similar items within a single set of accounts should be given similar accounting treatment, and the same treatment should be applied from one accounting period to the next for similar items so that one year’s results are comparable to the rest.
Constitution	One of the names for the governing document of an organisation.
Contract	An agreement between two or more parties that creates enforceable rights and obligations.
Co-option	Where the appropriate body (often a board of directors/ trustees/ governors) chooses a representative of an area of interest or issue to join the body. The person is not a member of the body.
Corporate social responsibility (CSR)	Responsibility shown by an organisation for matters of general concern to the society in which it operates, such as environment, health and safety and social welfare.
Corruption	The abuse of entrusted power for private gain.
Council	An advisory, deliberative or administrative body forming part of the constitutional structure of an organisation such as a national governing body, representing some or all of its stakeholders in some capacity, and having powers or rights with respect to its governance, but which is not the board or the shareholders in a general meeting.

Data governance	The practices and processes which help ensure the formal management of data assets.
Data protection	The process of safeguarding important information from corruption, compromise or loss. There are separate rules for protecting personal data.
De facto director	A person who has not been formally appointed as a director but holds themselves out as a director. Such a person is deemed to be a director for legal purposes.
Delegation	The process of appointing someone to vote or make decisions on behalf of someone else or a group.
Direct discrimination	Where one person treats another less favourably because of a protected characteristic.
Director	The actual definition depends on the circumstances. For the purposes of companies or incorporated bodies, the director sits on the board and is an officer. Not all those who are called a director are also officers of the company/ organisation.
Disability	A physical or mental impairment that has a ‘substantial’ and ‘long- term’ negative effect on your ability to do normal daily activities (Equality Act 2010).
Disclosure	The act of making information known.
Disclosure and Barring Service (DBS)	A government service which helps employers make safer recruitment decisions and prevents unsuitable people from working with vulnerable groups, including children, by checking the backgrounds of certain individuals.
Disqualification order	A court ruling which bans a director from continuing in the role, following evidence of wrongdoing or misconduct.
Diversity	Having the representation of and welcoming the views of all parts of the community which an organisation serves or seeks to serve. While the emphasis is often placed on gender and ethnicity, true diversity encompasses the protected characteristics defined under the Equality Act 2010, as well as a range of socio-economic backgrounds, lived experience and different approaches to thinking.
Due diligence	Reasonable steps or care taken to avoid committing an offence. Also a comprehensive appraisal of a situation or business for the purposes of evaluation.
Duties	Moral or legal obligations or responsibilities. Also, tasks or actions that one is required to perform as part of a job.
Duty of care	A legal, regulatory and/or moral obligation to safeguard others from harm while they are in your care, using your services, or exposed to your activities.

Elected director	A director formally appointed by an agreed process. See also nominated director.
Electronic filing	Submission of documents over the internet using software approved by the relevant authority.
Ethics	The moral principles that govern a person’s behaviour or the conducting of an activity.
European sporting model	A term used to describe the structure of professional sports leagues in Europe for team sports that have certain governance principles including open leagues, no salary caps and unequal revenue distribution systems. Often discussed in contrast to the North American sporting model.
Executive directors	Members of the board who are also employees and who often have specified areas of responsibility.
Ex-officio	An ex-officio member of a body is part of it by virtue of another position held, and their position is therefore wholly dependent (and conditional) on them continuing to hold that office. For example, a chief executive officer who is on the board in an ex officio capacity will automatically step down from the board upon termination of their role as the chief executive.
Extraordinary general meeting	A meeting of members, held for a particular reason.

Fiduciary relationship	A person who holds a legal or ethical relationship of trust with one or more other parties (person or group of persons). Typically, a fiduciary prudently takes care of money or other assets for another person.
Financial control	Internal controls to prevent or detect errors resulting from financial risks.
Financial probity	The evidence of ethical behaviour. Can be defined as complete and confirmed integrity, uprightness and honesty in a particular process.
Financial Reporting Standards	A set of international accounting standards stating how particular types of transactions and other events should be reported in financial statements.
Financial year end	The date to which the organisation’s profit and loss account is drawn up.

General meeting	A formal meeting of the members of an organisation.
Going concern	The information presented in the financial statements is prepared on the basis that the organisation will continue to operate for the foreseeable future.
Governance Action Plan	A process to improve systems of corporate governance in an organisation. A Governance Action Plan to achieve compliance with the Code for Sports Governance is agreed between funded bodies and Sport England/UK Sport as a condition of an investment award.
Governance professional	A person qualified to ensure an organisation complies with legislation, regulations, codes of governance and maintains high ethical standards.

Harassment

Unwanted conduct towards a person which is related to a protected characteristic.

Honorary officer

Usually a voluntary position, often deriving from experience, and not requiring a formal appointment process.

Hybrid AGM

An AGM where members can attend in person or electronically.

Incorporation	The process of formation of a company as a legal entity, involving the filing of specific documents with the registrar of companies.
Independence	A situation where there is no close connection, personal, professional or other, between an individual and a given person or organisation. The Code for Sports Governance allows for a person to be deemed independent even if they are a member of an organisation and/or play the sport. It provides examples of a ‘close connection’ as: a) they are or have within the last four years been actively involved in the organisation’s affairs, e.g. 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; or c) they have close family ties with any of the organisation’s directors or senior employees.
Independent examiner	An independent person who is reasonably believed by the board to have the requisite ability and practical experience to carry out a competent examination of the accounts.
Indirect discrimination	Treatment which may be neutral on its face but which discriminates in practice against members of a group who share a protected characteristic.
Induction	The process of introducing a person to a role, providing information, meetings, training and more.
Insolvency	The inability of an organisation to be able to pay its debts.
Internal audit	Investigations and checks carried out by internal auditors of an organisation.

Liabilities

Legal debts or obligations.

Listing Rules

A set of regulations applicable to any company listed on the UK Stock Exchange, subject to the oversight of the UK Listing Authority (UKLA).

Majority	The greater number, as regards voting on a decision. Particular decisions may require different sizes of majority. This will be detailed in the governing document.
Match fixing	The action or practice of dishonestly determining the outcome of a match before it is played.
Matters reserved for the Board	Those decisions which the board may not delegate.
Member	A subscriber to the memorandum of association and any other person who agrees to be a member and whose name is entered in the register of members. Some organisations have different categories of members.
Memorandum	A constitutional document setting out details of the subscribers to an incorporation.
Minutes	Detailed notes that serve as an official written record of a meeting.
Money laundering	The process of disguising the source of money that has been obtained from illegal activity so that it appears to come from a legitimate source.

National governing body (NGB)	Organisations that govern recognised sporting activities on a UK, Great Britain or home country basis.
Nominated director	A director whose appointment to the board arises from provisions in the articles of association of the organisation permitting the election or nomination of directors by the organisation’s membership or by particular stakeholders (e.g. geographical areas or sporting disciplines).
Nomination committee	A board committee tasked with appointments, usually to the board and senior management.
Non-executive director (NED)	A member of a board who is not part of the executive team. A non-executive director typically does not engage in the day-to-day management of the entity but focuses on policy and strategy and holds the executive to account.
North American sporting model	A term used to describe the structure of professional sports leagues in North America for team sports that have certain governance principles including closed leagues, salary caps and unequal revenue distribution systems. Often discussed in contrast to the European sporting model.
Notice	Notice of meeting: formal notification of the date, time and place of a meeting, and what type of meeting it is. The notice usually includes the agenda.

Officer	A legally appointed and recognised person who can act for and represent the organisation.
Olympism	A philosophy of life, exalting and combining in a balanced whole the qualities of body, will and mind. Blending sport with culture and education, Olympism seeks to create a way of life based on the joy found in effort, the educational value of good examples and respect for universal fundamental ethical principles (International Olympic Committee).
Ordinary resolution	A decision passed by a majority of the members of an organisation.
Oversight	The action of overseeing something.

Performance enhancing drugs	Substances that have the potential to enhance sport performance, represent a health risk to the athletes or violate the spirit of sport (World Anti-Doping Agency).
People with significant control	The people who own or control or have significant influence over a company.
Procurement	The process of finding and agreeing to terms, and acquiring goods, services or works from an external source, often via a tendering or competitive bidding process.
Protected acts	Making a claim or complaint of discrimination (under the Equality Act 2010); helping someone else to make a claim by giving evidence or information; making an allegation that you or someone else has breached the Act; doing anything else in connection with the Act.
Protected characteristics	Defined under the Equality Act 2010: age; disability; gender reassignment; marriage and civil partnership; pregnancy and maternity; race; religion and belief; sex; sexual orientation.
Proxy	The authority to represent someone else, especially in voting.

Quorum

The number of people required to be present to conduct valid business at a meeting.

Register	A formal list or records (see also Statutory registers).
Registered office	The official address of a legal entity, company, association or other.
Remuneration	Payment of wages; can include salary, bonuses, shares, commission.
Remuneration committee	A board committee which is tasked with oversight of payment of salaries, fees or other such items, usually for the board and senior management.
Reserves	An amount of money an organisation can use for future payments and/or emergencies in excess of what is needed for day-to-day operations.
Resolution	A decision at a meeting reached by a majority of members voting.
Risk	The possibility of an event occurring that will have an impact on the achievement of objectives. Risk is measured in terms of impact and likelihood. (Chartered Institute of Internal Auditors)

Safeguarding	Measures to protect the health, well-being and human rights of individuals, especially children, young people and vulnerable adults, to ensure they are free from abuse, harm and neglect.
Seal	A tool which makes a stamp or embossed imprint on a document as an additional evidence of verification.
Secretary	A governance and administrative role, also usually providing support to the board.
Senior independent director (SID)	A non-executive director who, where required, is tasked with supporting the chair, being a specific board contact where there are stakeholder disputes, and usually conducts the assessment of the chair. The SID can have a key role in difficult situations.
Separate determination	An accounting concept which treats a business separately from its owner. The separate entity assumption states that the transactions conducted by a business are separate to those conducted by its owners.
Service address	The official correspondence address for a director or other officer or person of significant control. The registered office address is often used for this purpose.
Shadow director	Someone who has not been formally appointed as a director, does not openly participate in managing the company, but whose instruction's directors and employees usually follow.
Shareholder	Someone who owns shares in an organisation. Collectively all of the shareholders own the organisation concerned.
Skills audit	Assessment of the skills of a group of people, often the board.
Skills matrix	A table or graph listing the skills that are desirable in a given group, together with the skills that exist in that group. It is a tool used to work out what skills are missing.
Special resolution	A decision which requires a 75% majority of the members to vote in favour to be passed.
Sports manipulation	An intentional arrangement, act or omission aimed at an improper alteration of the result or the course of a sports competition in order to remove all or part of the unpredictable nature of the sports competition with a view to obtaining an undue advantage for oneself or for others.
Spot-fixing	The action or practice of dishonestly determining the outcome of a specific part of a match or game before it is played.
Stakeholder	A person, group of persons, organisation or community or with an interest or concern in something, especially a business.
Standing order	Currently used with relation to bank payments. Formerly also used for internal instructions for organisations where constitutional documents do not include related provisions.
Statement of comprehensive income (income statement)	A statement showing the profits (or losses) recognised during a period. The profit is calculated by deducting expenditure (including charges for capital maintenance) from income.
Statement of financial position (balance sheet)	A list of all assets owned by the business and all of the liabilities owed by a business at a specific point in time (normally at the end of a financial year). It is often referred to as a ‘snapshot’ of the financial position of the business.
Statutory registers	Formal lists or records as required by law (for example, the register of members).
Strategy	A plan of action designed to achieve a long-term or overall aim.
Subsidiary	A company controlled by another (organisation), which usually holds a majority of the shares.
Substance over form	An accounting principle used ‘to ensure that financial statements give a complete, relevant, and accurate picture of transactions and events’.

Terms of reference

A formal document which defines the purpose and structures of a project, committee, meeting, negotiation, or any similar collection of people who have agreed to work together to accomplish a shared goal.

UK GAAP

UK Generally Accepted Accounting Practice. The overall body of regulation establishing how company accounts must be prepared in the UK. This includes not only accounting standards, but also UK company law.

Vicarious liability

A form of a strict, secondary liability that arises under the common law doctrine of agency: the responsibility of the superior for the acts of their subordinates, and also the responsibility of any third party that had the 'right, ability or duty to control' the activities of a violator.

Vice-chair

A member of a committee, board or group, designated as immediately subordinate to a chair and serving as such in the latter's absence; a person who acts for and assists a chair.

Victimisation

When a person is treated less favourably on the ground that they have performed a protected act.

Whistleblowing

Telling a public or regulatory authority, or the public, that an organisation you are working for is doing something immoral or illegal.

Written resolution

A resolution of members that is taken by written means i.e. not in a meeting. Directors may use written resolutions if the constitution permits, or by recourse to common law.

A–Z of governance terms

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