Getting antsy about ACNC governance standards

It looks like the ACNC may well survive. On 24 June the Senate moved a motion calling on the Government to withdraw the ACNC Repeal Bill. Many see this as good news.

The ACNC is widely applauded but, I have to say, I was disappointed in the set of governance standards realised by the ACNC last year.

That mildly crude old Australian expression of being as useful as a one-legged man in an arse kicking contest came to mind when I first saw the documented standards.

Now I’m not having a dig at the Commission, but…………

The document spells out five new – now that’s a word to get us excited – governance standards that all charities and NFPs must adhere to. But each and every one is elementary, fundamental and required by law to happen anyway.

Here goes…

Number One: the entity is a not-for-profit and working towards a charitable purpose.

The truth is you can’t incorporate as a not-for-profit with a charitable purpose unless your Constitution sets this all out, so this has little to do with governance and much to do with telling people about the organisation…which means it’s about marketing and belongs on a website or in a brochure.

Number Two: accountability to members (with the suggestion to organise an annual meeting).

In reality, the law states quite clearly that board members have duties to act in the best interests of the members and/or the purpose. And as for the annual meeting, well, guess what? That’s a legal requirement anyway.

Number Three: compliance with Australian laws.

Are they serious? What’s the alternative?

I’m tempted to say this is a sad indictment on the prevailing standard of governance found in these organisations but thankfully, personal experience tells me there are many excellent people in the sector, doing fantastic work.

Number Four: the suitability of responsible persons.

Again, the law is unambiguous. The onus is on the organisation to ensure that those who hold the office of directors and senior executives are responsible persons. The organisation should be screening these people prior to appointment to be satisfied that there’s nothing about them that would disqualify them from holding responsible person positions.

And Number Five: the duties of responsible persons.

These are already there in the legislation, have been for years…things like displaying care and diligence, acting in good faith, appropriately managing conflicts of interest and ensuring that that the organisation does not trade while insolvent.

I appreciate I’ve been a little harsh here and am determined to end on a brighter, more upbeat note. Perhaps the fact that this new set of governance standards is written in plain English rather than the legalese that’s usually omnipresent in documents of this nature means people will probably read it!

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4 thoughts on “Getting antsy about ACNC governance standards

  1. Thanks for the critique, Kate. Surely the punch line is the five governance standards you would write for the sector?

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