Last updated 16th August 2022
Different charity structures have different governing bodies, such as a board of directors or an executive committee. These bodies generally hold the power to manage the financial and general affairs of the organisation. In Australia, this should align with the ACNC Governance Standards for registered charities. NFP board members ensure strategies and policies support the charity’s purposes and that oversight complies with Governance Standard 5 and relevant laws, including the Corporations Act.
The following quote from Lord Justice Denning describes the role of different individuals in a company through a simple analogy:
“A company in many ways may be likened to a human body. It has a brain and a nerve centre which controls what it does. It also has hands which hold the tools and act in accordance with directions from the centre. Some of the people in the company are mere servants and agents who are nothing more than hands to do the work and cannot be said to represent the mind or will. Others are directors and managers who represent the directing mind and will of the company and control what it does”
– Lord Justice Denning, HL Bolton (Engineering) Co Ltd v TJ Graham and Sons Ltd, 1957
Key leaders hold specific responsibilities as ‘Responsible Persons’ under the Australian Charities and Not-for-profits Commission Act 2012 (Cth). Directors and Company Secretaries also have specifically defined legal obligations under the Corporations Act 2001 (Cth).
Governance responsibilities discussed may also apply to small charities structured as Companies Limited by Guarantee or incorporated associations. The role of the incorporated association’s Management Committee and its Public Officer have specific responsibilities under the Associations Incorporations Act 2009 (NSW), and associations legislation in other states and territories.
Duties of NFP Board Members: Directors
A director validly appointed to the board shares collective responsibility, with duties reflecting ACNC Governance Standard 5 for registered charities. NFP board members must act diligently, contribute promptly, and base decisions on proper information in the charity’s best interests.
Company directors must meet ASIC obligations alongside ACNC requirements, with ACNC-registered companies reporting changes to the ACNC and receiving ASIC fee relief. Directors of companies, including charities, must now hold a Director Identification Number to improve transparency and accountability.
Chairperson
The chairperson leads the board, facilitating meetings, guiding decisions, overseeing information, and maintaining a constructive link with management. When staff are employed, the chairperson often links the board and the CEO. They ensure strategic alignment and accountability. Effective chairs promote transparency and accountability, supporting ACNC expectations for lawful, responsible, and accountable charity operations.
Secretary: Governance Support for NFP Board Members
The secretary’s specific responsibilities are set out in the governing documents and, for companies or associations, the role also intersects with Corporations Act or associations legislation obligations, including coordinating corporate records and statutory reporting where required.
The secretary manages governance processes, coordinates board documents, and monitors compliance, helping Responsible People meet ACNC Governance Standard 5. Some organisations appoint a director or a staff member as secretary, as long as the role supports accountable governance.
Treasurer
Although not legislatively defined, this NFP board role typically focuses on financial oversight, budgeting, reporting, banking, record-keeping, and asset controls.
Having a treasurer does not excuse other directors from financial responsibility, and the ACNC’s Governance Standard requires Responsible People to ensure the charity’s financial affairs are managed responsibly at all times.
Key Summary
Birchgrove Legal’s NFP team can review or develop governance documents, deliver director training tailored to ACNC Governance Standards, and prepare or update a Board Charter and letters of appointment for NFP board members to strengthen compliance and effectiveness.
Contact Birchgrove Legal for practical, sector-specific guidance on directors’ duties, Responsible People obligations, and emerging reforms.
