Introduction of Governance Standards - Key Principles and Requirements

1. ConNEXTions 2013 Introduction of Governance Standards

2. Governance Standards • Refer ACNC Act • Regulations passed in June 2013 • Apply from 1 July 2013 • 5 Standards • A ‘base-line’ not best practice

3. Governance Standards • Apply from 1 July 2013 • 2 Exceptions • If Constitution / Rules prevents compliance you have until 1 July 2017 to make changes to address, • If an incorporated association will be taken to meet the governance standards until 1 July 2017 if • Appropriate incorporated assoc. legislation (state) sets out duties for responsible persons, and • Your charity & responsible persons) comply with this

4. Governance Standard 1 • Purposes and not-for-profit nature of a registered entity • Must be not-for-profit • Work towards charitable purpose • Able to demonstrate it • Provide information about their purpose to the public

5. Governance Standard 1 • What? • Demonstrate your charity is established as a NFP entity with a charitable purpose • Actually run as a NFP entity & work towards your charitable purpose • Provide information about your charitable purpose to the public

6. Governance Standard 1 • How? • Clauses in your governing documents setting out your charitable purpose & not-for-profit nature • Run your organisation as a charity • Provide governing documents to ACNC for uploading to the ACNC Register, make available on your website

7. Governance Standard 2 • Accountability to members • If you have members, be accountable to them • Provide adequate opportunity to raise concerns abut governance of the organisation

8. Governance Standard 2 • What? • Take reasonable steps to be accountable to your members, • Allow members adequate opportunities to raise concerns about how your charity is run.

9. Governance Standard 2 • Only applies if you have members, • How? • Meetings at least annually with opportunities to ask questions & vote on resolutions, • Give information to members, • Have clear processes for appointing responsible persons (board members, committee members).

10. Governance Standard 3 • Compliance with Australian Laws • Must not commit a serious offence (i.e. fraud) under Australian Law • No breach of laws where penalty 60 penalty units or more ($10,200)

11. Governance Standard 3 • What? • Must not act in a way that under commonwealth or state / territory law could be dealt with as, • An indictable offence (serious crime), • Breach of a law with a civil penalty of 60 penalty units • Applies to the Charity not generally to individuals but may apply to governing body members acting on behalf of the charity

12. Governance Standard 3 • Not a new obligation, you should be doing this now!, • Some obligations for charities regulated by state & territory legislation, • Be aware of major regulatory issues relating to your charity, • Some basic financial controls, • Process to ensure you meet legal obligations

13. Governance Standard 4 • Suitability of responsible persons • Must check that responsible persons are; • not disqualified from managing a corporation (Corporations Act), or • Disqualified from being a responsible person of a registered charity by the ACNC Commissioner • Charities must take reasonable steps to remove responsible persons that do not meet these requirements

14. Governance Standard 4 • What? • Take reasonable steps to be satisfied that each responsible person if not disqualified from: • Managing a corporation under Corporations Act • Being a responsible person by the ACNC Commissioner within the previous 12 months • If not satisfied, do not appoint, if already appointed, take steps to remove

15. Governance Standard 4 • How? • Search ASIC Disqualified persons register, • Search ACNC register of disqualified persons (none as yet!) • Require all responsible persons to sign declaration relating to disqualifying offences (ACNC has a suggested format • Take these steps for existing responsible persons • May be other state requirements i.e. Working with Children checks

16. Governance Standard 5 • Duties of Responsible persons • Charities must take reasonable steps to ensure responsible persons: • Understand, and • Carry out The duties set out in this standard

17. Governance Standard 5 • What? • Act with reasonable care and diligence, • Act honestly in the best interests of the charity, • Not misuse their position as a responsible person • Not to misuse information gained in the role as a responsible person, • Disclose conflicts of interest, • Ensure the financial affairs of the charity are managed responsibly • Not to allow the charity to operate while insolvent

18. Governance Standard 5 • How? • Bring these to attention of responsible persons • Outline in latters of appointment • Provide information to responsible persons on duties to refresh their knowledge, • Encourage responsible persons to attend, prepare for & participate at meetings • Have processes in place to manage conflicts of interest, • Take reasonable action if a responsible person is not carrying out their duties

19. Governance Standards • Common-sense • Minimum standards • Good practice not best practice • Detailed booklet at www.acnc.gov.au