Directors sceptical about impact of ACNC

  • Date:17 Sep 2012
  • Type:Media Release
The proposed Australian Charities and Not-for-profits Commission (ACNC) will have no impact or a negative impact on not-for-profit (NFP) governance across a range of areas, according to the findings of an Australian Institute of Company Directors’ study, the Directors Social Impact Study 2012.

About 80 per cent of NFP directors surveyed for the Directors Social Impact Study 2012, conducted by Curtin University on behalf of Company Directors, said they are worried that the proposed ACNC will not reduce red tape or improve financial reporting, recruitment of directors, compliance and the ability of their organisation to achieve its mission.

“Although there is widespread support in the sector, and across the director community, for the ACNC, the study findings confirm that there is doubt among the NFP community that the legislation establishing the new regulatory regime, in its current form, will achieve the Government’s commitment to strengthen the NFP sector,” said CEO and Managing Director of the Australian Institute of Company Directors, John Colvin.

“Although positive changes have been made to the Bill since this study was completed, there are still a number of areas directors remain concerned about,” said Mr Colvin.

The study also found that there are no discernable differences between the governance effectiveness of not-for-profit and for-profit boards.

“We need to dispel this myth that NFP boards are ‘second rate’ and lack governance skills compared to boards in other sectors,” Mr Colvin said.

The study found that directors of NFPs are experienced and highly educated, with 63 per cent having post-graduate qualifications and an average of nine years’ experience as a non-executive director.

“It sends a clear message to governments, policymakers and commentators that there is simply no evidence to support the long-held belief that poor governance practices are characteristic of the NFP sector,” Mr Colvin said. 

The Study showed the extensive contribution directors are making to the NFP sector, with directors working on average 35 days a year, or the equivalent of seven working weeks, in their role, with 86 per cent doing so voluntarily.

“These directors have exactly the same duties and responsibilities as directors of our largest companies, and are also subject to the same liabilities. Their decision to serve comes from a deep commitment to benefiting the lives of communities and individuals across Australia,” Mr Colvin said.

Mr Colvin added that the Directors Social Impact Study highlights the challenges NFP boards and directors face, including the focus on minimising overheads, the tendency for governments to view NFPs as a homogenous group and the potential for public funding to drive strategy.

“These are the types of issues the proposed ACNC has an opportunity to address. The ACNC’s role as a leader and educator will be enhanced if they can actively work with the sector to fix the challenges that organisations and boards have faced over many years,” said Mr Colvin.

Commonwealth Bank partnered with the Australian Institute of Company Directors on the Directors Social Impact Study 2012.

Download the above media release, 'Directors sceptical about impact of ACNC' (PDF 132 KB)

Download the Directors Social Impact Study 2012 (PDF 2MB)

Media contact
Matt Pritchard, Communications Advisor, 02 8248 6624