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The 'governance' of an organisation refers to the direction, control and accountability of an organisation. Particular legal obligations apply to the governance of organisations. Governance is undertaken by the committee or board of the organisation.
Governance can be distinguished from 'management' in an organisation. Generally, the role and responsibility of an organisation's board or committee is to govern the organisation, and the role and responsibility of the management or executive team is to manage the organisation. Some community organisations that may not have paid employees, or few members, can struggle to distinguish between the governance roles and management roles in an organisation. This distinction is very important.
Introduction to the role of board members
The Not-for-profit Law fact sheet on the role of board members has been prepared to help new board members understand their roles, so they can contribute effectively to the successful running of their organisation from day one.
The fact sheet covers:
- role of a board member
- legal oligations of board members
- personal liability of board members, and
- what board members should know about their organisation.
The governance positions in an organisation depend on its legal structure. This page has information for companies limited by guarantee and incorporated associations (Victoria, New South Wales and Queensland with other jurisdictions coming soon).
Is your board made up of the right people?
Getting the right mix of board/committee members is essential to setting up your organisation for success. There are a range of resources available to assess skills gaps on boards. There are also a range of training courses for directors/committee members as well to help them upskill. Go to the Governance page of the Information Hub for a list of resources and tools.
For information about recruiting volunteer directors/committee members, go to the Volunteers page of the Information Hub.
Don’t know your legal structure?
There are a few steps you can take to find out your organisation’s legal structure. Firstly, if your organisation is a charity, the best place to look is on the ACNC register. Once you have found your organisation’s entry, you can check your rules or constitution which should state the type of legal structure. You can search by name and by ABN or ACN.
If your organisation is not a charity, you should start with the Australian Business Register search. You will need the name and ideally the ABN or ACN of your organisation. If your group is a Company Limited by Guarantee (a federal not-for-profit structure) this will be indicated in the entry as Australian Public Company. If your group is a state-based not-for-profit structure such as an incorporated association or a co-operative, it is likely that the ABR will list it as “Other Incorporated Entity”. You will then need to search your state/territory regulator of not-for-profits to confirm your structure.
Companies Limited by Guarantee
For information on the governance positions within a company limited by guarantee and information on the different committee roles, the following fact sheet provides an overview of the following:
- what is a company limited by guarantee (CLG)?
- the role of a board of directors, and
- an introduction to the legal duties of directors and officers of a CLG.
For more information on the legal duties that apply to those that govern community organisations, go to our Duties page.
The below state and territory sections feature resources on positions in an incorporated association.