The ACNC Governance Standards Begin

Governance standards for charities registered with the Australian Charities and Not-for-profits Commission (ACNC), commenced operation on July 1st.

The new charity governance standards apply to all organisations wishing to register with the ACNC – with the exception of Basic Religious Charities.

"This will provide assurance to the community that if a charity is registered with the ACNC, it commits to these straightforward standards," Acting Commissioner Murray Baird said.

“At a later stage, there will be consultation on proposed external conduct standards for registered charities that send funds or engage in activities overseas.”

Charities that are already listed with the ACNC will be held to the new standards in order to remain registered; however Baird said he was confident that very few would need to change their current governance practices.

“In our experience, the charitable sector is made up of people who aim not just to do good things but to do the right thing" he said.

“We at the ACNC are certain that the vast majority of Australian charities already govern themselves in accordance with these new standards.
“However, in organisations where that is not the case, it is the ACNC’s role to offer support and advice to help them reach this level of governance.”

The ACNC website explains the regulator’s phased approach to monitoring compliance with the standards, explaining that for the first two years it will only act in cases of serious or deliberate breaches – such as money being diverted to non-charitable purposes, non-disclosure of serious conflicts of interest, or gross financial negligence.

Detailed information for charities on how to meet their obligations under the new standards will be published on the ACNC website shortly including a revised edition of the ACNC’s guide for board members, Governance for Good.

The standards were introduced to Parliament after a substantial consultation process.
The full version is available here.
 

Standard One: Purposes and Not for Profit nature of a registered entity
Charities must be Not for Profit and work towards their charitable purpose. They must be able to demonstrate this to the ACNC and provide information about their purpose to the public.

Standard Two: Accountability to members
Charities must take reasonable steps to be accountable to their members and provide their members adequate opportunity to raise concerns about how the charity is governed.

Standard Three: Compliance with Australian laws
A charity must not commit a serious offence (such as fraud) under any Australian law or breach a law that may result in a penalty of 60 penalty units ($10,200) or more.

Standard Four: Suitability of responsible entities
Charities must check that their responsible persons are not disqualified from managing a corporation (under the Corporations Act 2001) or currently disqualified from being a responsible person for a registered charity by the ACNC Commissioner. Charities must take reasonable steps to remove responsible persons that do not meet these requirements.

Standard Five: Duties of responsible entities
Charities must take reasonable steps to make sure that the members of their governing body know and understand their legal duties and that they carry out their duties.