Charity Directors’ Duties and Liabilities

Steering the Ship Through Murky Waters

By Andrew Lind & Nina Flewell-Smith

Presented at
Television Education Network 7th Annual Not-for-profits and Charities Regulatory Conference
Melbourne, 16 May 2019

Text books are written on the subject matter of this paper. We have attempted to focus on what is relatively new in the context of governors’ duties and liabilities.

The paper begins with a significant focus on the new External Conduct Standards (due to become law in July 2019) and the breadth of their application to all charities. It then moves to a broader consideration of governor duties (and the various places the obligations spring from), some protections available for governors, management of conflicts of interest especially in the context of related party transactions and some consequences of breach.

Finally we have been asked to comment on recommendations of the ACNC Review Panel in this area and make some observations from the Banking Royal Commission.

The use of the word “governors” (rather than Directors) in this Paper is intentional, as certain duties apply to all governors of charities – whether those governors be directors of a company or management committee members of an association – regardless of the structure of their charity
entity.

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