ACNC GOVERNANCE STANDARDS

ACNC published the following, explaining how the ACNC Governance Standards are a set of core, minimum standards relating to charity governance and how a charity is run – including its processes, activities and relationships.

Organisations must meet the ACNC Governance Standards in order to be registered as charities with the ACNC. Then, once an organisation is registered as a charity, it must continue to comply with the standards in order to retain its registration.

A charity does not need to submit anything to the ACNC to show that it meets the Governance Standards. However, it must be able to provide evidence of meeting the standards if requested.

The Governance Standards do not apply to Basic Religious Charities.

What the Governance Standards require

The ACNC Governance Standards require a charity to remain charitable, operate lawfully, and be run in an accountable and responsible way. Through these requirements, the standards help maintain public trust in charities, and help charities continue to do their charitable work.

Because the Governance Standards are a set of high-level principles rather than precise rules, each charity must decide how it will comply with them.

A charity must be able to demonstrate that the steps it has taken to comply with the Governance Standards are appropriate, considering factors such as its size, purposes and activities.

For example, a larger charity or one with vulnerable beneficiaries may need to take extra steps to comply with the standards.

Governance Standard 1: Not-for-profit and working towards charitable purpose

Governance Standard 1 requires charities to demonstrate that they are set up as a not-for-profit with a charitable purpose, and run as a not-for-profit and work towards that charitable purpose. It also requires charities to demonstrate that they can provide information to the public about their charitable purpose.

A charity must be not-for-profit and work towards its charitable purpose. It must be able to demonstrate this and provide information about its purposes to the public.

Governance Standard 2: Accountability to members

Governance Standard 2 requires charities to take reasonable steps to be accountable to their members, and allow their members adequate opportunities to raise concerns about how the charity is run.

A charity that has members must take reasonable steps to be accountable to its members and provide them with adequate opportunity to raise concerns about how the charity is governed.

Governance Standard 3: Compliance with Australian laws

Governance Standard 3 requires charities to act in a lawful way, and comply with Australian laws.

A charity must take reasonable steps to:

• be satisfied that its Responsible People (such as board or committee members or trustees) are not disqualified from managing a corporation under the Corporations Act 2001 (Cth) or disqualified from being a Responsible Person of a registered charity by the ACNC Commissioner, and

• remove any Responsible Person who does not meet these requirements.

Governance Standard 4: Suitability of Responsible People

Governance Standard 4 requires charities to ensure they not controlled by people who may pose a risk to the charity’s financial position or the pursuit of its charitable work.

A charity must take reasonable steps to:

• be satisfied that its Responsible People (such as board or committee members or trustees) are not disqualified from managing a corporation under the Corporations Act 2001 (Cth) or disqualified from being a Responsible Person of a registered charity by the ACNC Commissioner, and

• remove any Responsible Person who does not meet these requirements.

Governance Standard 5: Duties of Responsible People

Governance Standard 5 requires charities to take reasonable steps to make sure that its Responsible People meet certain duties.

A charity must take reasonable steps to make sure that its Responsible People are subject to, understand, and carry out the duties set out in Governance Standard 5. These duties include:

• to act with reasonable care and diligence

• to act honestly and fairly in the best interests of the charity and for its charitable purposes

• not to misuse their position or information they gain as a Responsible Person

• to disclose conflicts of interest

• to ensure that the financial affairs of the charity are managed responsibly, and

• not to allow the charity to operate while it is insolvent.

Governance Standard 6: Maintaining and enhancing public trust and confidence in the Australian not-for-profit sector

Governance Standard 6 requires charities to take reasonable steps to become a participating non-government institution if they are, or are likely to be, identified as being involved in the abuse of a person.

A charity must take reasonable steps to become a participating non-government institution of the National Redress Scheme if the charity is, or is likely to be, identified as being involved in the abuse of a person either:

• in an application for redress made under section 19 of the National Redress Scheme for Institutional Child Sexual Abuse Act 2018 (Cth) (Redress Act), or

• in information given in response to a request from the National Redress Scheme Operator (Secretary of the Department of Social Services) under section 24 or 25 of the Redress Act.

Contact us for more information on how to keep your charity compliant www.charitycompliance.com.au/contact