On this page
- Introduction
- What are the specific requirements for your CLG to hold members meetings remotely?
- What are the specific requirements for your CLG to hold directors meetings remotely?
- Signing documents electronically
Introduction
Traditionally, corporate governance took place in-person and all stakeholders would be present at physical meetings of members or directors. Technology now permits effective communication without the need for physical meetings. Sometimes, including in a disaster, physical meetings may not be possible or convenient.
What is 'remote governance'?
We use 'governance' to refer to the formal process an organisation follows to make decisions about how the organisation is run and what it does (for example, the formal procedure a CLG follows to call and hold general meetings).
We use 'remote governance' to refer to a range of ways to conduct corporate governance that do not require the physical participation of every stakeholder. This includes hybrid governance, where some people continue to meet in person, with others participate using technology. It also includes entirely virtual governance, where each aspect of governance is performed using technology and there is no physical element.
Depending on the type of entity an organisation is, the organisation must follow specific requirements to comply with its governance obligations when operating remotely.
These requirements may differ depending on whether the organisation is a company limited by guarantee (CLG), a registered charity CLG (a CLG registered as a charity with the ACNC), or an association incorporated under the laws of a state or territory.
Note – the information on this webpage considers the requirements for remote governance of a CLG
This information on this webpage does not cover the governance requirements of incorporated associations.
For incorporated associations, the requirements differ according to the state or territory in which the association is incorporated. See our webpages ‘How to run the organisation’ and ‘Holding meetings’ for more information about your jurisdiction.
For more information on how to govern a not-for-profit organisation, see our guides:
- running a CLG (not registered with the ACNC)
- running a CLG registered with the ACNC
- running an incorporated association in Victoria
- running an incorporated association in NSW
Governance obligations continue to apply to organisations during times of disaster, so your organisation must ensure it meets these requirements.
What are the specific requirements for your CLG to hold members meetings remotely?
Under the Corporations Act 2001 (Cth), CLGs (including CLGs registered as charities with the ACNC) may hold wholly physical and hybrid members’ meetings, even if this is not specifically authorised in the CLG’s constitution.
Wholly virtual meetings are only allowed if they are expressly required or permitted under the CLG’s constitution.
This means:
- your CLG may conduct hybrid members’ meetings even if the CLG’s constitution doesn’t cover this, and
- the CLG may hold wholly virtual members’ meetings if the CLG’s constitution explicitly allows this
Also check your CLG’s constitution for any specific requirements for the CLG to hold hybrid or wholly virtual members’ meetings, such as:
- processes for holding members’ meetings remotely
- whether particular forms of technology are required
- provisions for how notice is given for holding members’ meetings remotely (and whether notice be given remotely as well), and
- different provisions for quorum (the minimum number of people who need to be present at a meeting for it to be official and for decisions to be made) if a meeting is held remotely
The Corporations Act requires that virtual meeting platforms must allow all members to have a reasonable opportunity to participate, including to hear and be heard.
Note – it’s important to review your CLG’s constitution closely
While the Corporations Act 2001 (Cth) sets out minimum requirements for holding members’ meetings remotely, a CLG’s constitution will often provide more detail.
Note
- Even if your CLG holds a members’ meetings remotely, the CLG must still comply with rules governing notice of meetings and the conduct of meetings.
- While CLG members have a right to elect to receive meeting related documents in physical or electronic form (and a CLG must take reasonable steps to send the documents in accordance with such election), in a disaster situation, it might not be reasonable to comply with the members' directions.
The requirement to hold a general members’ meeting at least once a year
The Corporations Act 2001 (Cth) requires a CLG to hold a general meeting at least once a year. This requirement does not apply to a CLG that is an ACNC-registered charity, but the ACNC does recommend holding a general meeting at least once a year to demonstrate the charity’s compliance with the ACNC Governance Standard 2.
If it’s not possible for a charity to hold a general meeting in a particular year due to a disaster, the charity’s board or committee members should consider how they can otherwise demonstrate compliance with Governance Standard 2.
If a CLG is not able to hold an AGM during the relevant period, the CLG should apply to ASIC for relief as soon as possible. Relief will generally be granted if the reasons for not holding the AGM in the relevant period were beyond the control of the CLG.
Making a decision without holding a members’ meeting
If it’s not practical or possible to hold a meeting remotely (or the CLG’s constitution does not allow wholly virtual meetings), the CLG’s members may be able to make a decision without holding a meeting if the constitution allows this.
Making a decision without holding a members’ meeting is called a ‘circulating resolution of members’.
A CLG may only pass a circulating resolution if its constitution allows this. To pass, a circulating resolution must have the unanimous consent of members.
You will need to check whether the option of a ‘circulating resolution of members’ is available to your CLGs.
Case study – holding a hybrid meeting
Jennifer is a director of Rebound Lismore, a CLG that helps people affected by floods access secure housing. Due to flooding, Rebound Lismore is unable to access their usual meeting space, and travel is significantly disrupted.
The directors have an important and time-sensitive resolution that must be approved by a resolution of Rebound Lismore members. Jennifer consults Rebound Lismore's constitution, but it doesn’t mention anything about meeting remotely.
Jennifer knows the Corporations Act does not permit wholly virtual meetings where the constitution is silent on this, and it’s not possible to hold a wholly physical members’ meeting.
Jennifer, therefore, gives notice of a general meeting to be held as a hybrid meeting – both at Jennifer's home and using Zoom. She takes care to comply with all the usual requirements in the constitution around giving notice of the meeting.
On the day of the general meeting, Jennifer attends at the physical location (her home), and each of the other members attend by Zoom. As this is a hybrid meeting for the purposes of the Corporations Act, Rebound Lismore can validly pass the resolution.
Tip
Make sure you accurately assess your members’ intentions ahead of the meeting and ensure there is sufficient space for people that are likely to attend the physical location of the general meeting.
What are the specific requirements for your CLG to hold directors meetings remotely?
Under the Corporations Act 2001 (Cth), a directors meeting may be called or held using any technology that the directors agree on and this agreement can be ongoing.
To determine a CLG’s procedures for calling and holding a meeting of directors, start with the CLG’s constitution. If the CLG’s constitution provides that certain technology is appropriate for the conduct of director's meetings, the directors will not need to separately consent to the use of such technology.
Making a decision without holding a meeting
If it’s not practical or possible to hold a directors’ meeting remotely, the directors may be able to make a decision without holding a meeting (called a ‘circular resolution of directors’).
The section of the Corporations Act that deals with circular resolutions by directors is a ‘replaceable rule’, which means that a CLG’s constitution may provide for different requirements for circular resolutions. Always check your CLG’s constitution to confirm your CLG’s requirements.
If your CLG uses the replaceable rules, the CLG’s directors may pass a resolution without holding a meeting if all the directors entitled to vote on the resolution sign a document that states they are in favour of the resolution set out in the document. Separate copies of a document may be used for signing by directors if the wording of the resolution and statement is identical in each copy. The resolution is passed when the last director signs.
Signing documents electronically
Since the COVID-19 pandemic, it has become increasingly convenient for organisations to sign documents electronically. Signing documents electronically is particularly useful in a disaster, when it might not be practicable to produce physical copies of documents or organise for relevant signatories to meet in one place.
The Corporations Act allows CLGs (including those registered as charities with the ACNC) to sign documents including agreements, deeds, and resolutions (as defined under the Corporations Act) electronically, or in combination with physical signatures, using methods that ensure the integrity of electronic signatures.
The types of document that a CLG might wish to sign electronically include grant agreements, lease agreements, volunteer agreements, board resolutions, partnership agreements, and funding contracts.
Documents can be signed electronically using applications such as DocuSign, Adobe Sign, and Microsoft Word. These tools provide secure and efficient methods for executing electronic signatures, ensuring compliance with legal requirements.
Under the Electronic Transactions Act 1999 (Cth), the method of electronic signature must identify the signer and their intention to approve what is communicated in the document. Identity could be shown by a typed name, a personal mark, a personal email, or use of an online ID verification method. Intention can be shown by a clear agreement, signing on the dotted line, or something extra in the context of a response.
Legally, there is no disadvantage to choosing to execute documents electronically compared with executing them by signing in wet ink. Executing documents electronically provides flexibility to CLGs in circumstances where a disaster may impede the ability for signatories to physically access documents.
Disclaimer: These resources provide general information about legal issues that may arise for not-for-profit organisations in managing disasters. This information is a guide only and is not legal advice. If you or your organisation has a specific legal issue, you should seek legal advice before deciding what to do. See full disclaimer and copyright notice.
The content on this webpage was last updated in December 2024.
