Consultation Paper on governance standards for Australian Charities and Not for Profits Commission

  • Date:18 Feb 2013
  • Type:Policy Submission

On Friday, 15 February 2013 we made a submission to Treasury on the consultation paper: Australian Charities and Not-for profits commission – Development of governance standards.

Overall we are generally supportive of the draft governance standards, however we believe they could be improved with some further amendments.

Specifically:

  • The term “responsible entity” should be changed as it is confusing and inconsistent with drafting language in other jurisdictions(we note this would require an amendment to the Australian Charities and Not-for-profits Commission Act 2012 (the ACNC Act).
  • Further clarification is required in governance standard 1 (purposes and not-for-profit nature of a registered entity) as to how a registered entity is to make information available to the public about its purposes.
  • The wording of governance standard 2 (accountability to members) is problematic and needs to be amended.
  • Governance standard 3 regarding “Compliance with Australian laws” is not required.
  • Governance standard 4 (management of financial affairs) should be re-drafted and make reference to ‘reasonable’ rather than ‘responsible’ management of financial affairs.
  • To the extent governance standard 5 (suitability of responsible entities) is required, obtaining declarations from “responsible entities” should be sufficient to meet the standard.
  • Further clarification is required on governance standard 6 (duties of responsible entities) as to what constitutes a material conflict of interest.
  • Governance standard 6 (duties of responsible entities) should be re-drafted to make express reference to the Business Judgment Rule.

Download our submission on Australian Charities and Not-for-profits Commission Development of Governance Standards (PDF 1.86 MB).