Uncertain Times for Volunteer Directors

Vol. 15 No. 2: September 2015

Journal: Governance Directions May 2015

Author: Josephone Heesh and Jessica Lobow

“In the past, many people, without hesitation, would volunteer to be a director or board member of a not-for-profit organisation, however, we are in uncertain times as recent litigation has caused concern for some volunteer directors and many more are now seeking some form of protection from their not-for-profit organisations for their potential exposure in these roles.”

This informative article examines the duties of volunteer directors under the Corporations Act 2001 and the five governance standards prescribed by the ACNC Act 2012. Advice includes:
• “Despite the ‘switching off’ of provisions relating to director’s duties for directors of not-for-profit companies also registered as charities with the ACNC, it is recommended that directors adopt best practice and operate as if the provisions still applied.”
• “To fulfil the duty of good faith under the Corporations Act directors must exercise independent judgment.”

“The duties of the directors under the Act although not binding on the governing group of all not-for-profit entities may be used as a reference point and benchmark to achieve best practice.”
 

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