1. Presented by Julia Sweeney, Partner Fisher Jeffries p 8233 0600 e jsweeney@fisherjeffries.com.au w fisherjeffries.com.au BETTER GOVERNANCE FOR A CHANGING ENVIRONMENT

2. Structure Company limited by guarantee –Corporations Act 2001 (Cth) Incorporated Association –Associations Incorporation Act 1985 (SA) Unincorporated Association Trust Partnership

3. Not for Profit –not for profit –charity current definition new definition –tax exempt –deductible gift recipient

4. Not for Profit Reform The Australian Charities and Not-for-Profits Commission (ACNC) –from 1 November 2012 –until 30 June 2014, will only register and regulate charities –NFPs that are not charities will continue to be regulated by the Australian Taxation Office and their respective State legislation

5. Other Reform “gag clauses” “in Australia” “unrelated businesses” Fund raising legislation NFP Consultation Code Commonwealth Grant Guidelines Red tape reduction

6. Reporting to the ACNC Registration annual information statement financial information a “charity passport” notification of changes record keeping

7. Resources Australian Charities and Not for Profits Commission –www.acnc.gov.au –Facebook.com/acnc.gov.au –Twitter.com/acnc_gov_au –Youtube.com/ACNC videos –linkedin Treasury –www.treasury.gov.au

8. Resources Australian Taxation Office –www.ato.gov.au/Non-profit Office for the Not for Profit Sector –www.notforprofit.gov.au National Compact –www.nationalcompact.gov.au

9. Duties of Individuals Directors Officers Committee Members Responsible Entity

10. Top 10 Tips for Charity Directors/ Officers/Committee Members Know what your charity’s purpose is Be clear about your role Understand your charity’s financial position Know your responsibilities Have a copy of your rules Don’t just follow the crowd Know your charity’s obligations Work as part of a team Declare and manage conflicts of interest Always act in your charity’s best interest

11. Duties Owed to the Entity Directors’ duties are owed to the entity and the entity is defined as the owners (members) or the objects Once a group has elected a member they assume office as a member of the board with a duty to serve its interests in preference to serving the interests of the group which elected them Nominee directors

12. Good faith –act bona fide – act for a proper purpose – avoid conflicts of interest Care and diligence Common Law Duties

13. Statutory Duties – Corporations Act Care and diligence –s 180 Good faith –s 181 Not to make improper use of position –s 182 Not to make improper use of information –s 183 Not to trade while insolvent –s 588G

14. Statutory Duties – Associations Incorporation Act –not intentionally deceive or defraud the association s 39A(1) –not make improper use of information s 39A(2) –not make improper use of position s 39A(3) –care and diligence s 39A(4)

15. Use of Information or Position Diversion of a corporate opportunity

16. Care and Diligence Example In FY 2007 Financial Statements: –failure to disclose certain guarantees –incorrect classification of non-current liabilities Directors were aware of liquidity stresses from US acquisition Had seen figures on true position around 2 months before sign off of accounts

17. Care and Diligence Don’t come to court arguing: –relied on auditors –relied on audit committee –not an accountant –papers too numerous to read everything

18. Exercising Care and Diligence Attend meetings regularly Read board papers and other information provided Be an active participant in meetings and ask pertinent questions Bring an open mind to any decision and consider all relevant information Become familiar with the “business” and operations of the organisation, and its functions and the board’s responsibilities and duties

19. Exercising Care and Diligence Don’t rely on expert advice without understanding and “bringing your own mind to the decision required” Ensure that delegations and policies are in place for administration Ensure adequate monitoring of operations Ensure minutes properly reflect the discussion and decisions and are circulated soon after the meeting Ensure a rolling action list to keep track of business arising

20. Conflicts of Interest Obligation to disclose - statutory –SS/91-195 Corporations Act 2001 –S31 Associations Incorporation Act 1985 Voting Present at meeting

21. Directors’ Rights and Protections Delegate within a board-endorsed policy framework Deed of access, indemnity and insurance Right to information – especially financial information

22. Directors’ Rights and Protections Right to call a board meeting Right to professional advice Insurance: directors’ and officers’ liability insurance