Creating a strong foundation for good governance

Monday, 04 September 2017

Susan Pascoe AM FAICD photo
Susan Pascoe AM FAICD
Commissioner, Australian Charities and Not-for-profits Commission

    Recent media reporting of poor practices from some in the Australian charity sector emphasises the importance of getting the basics right – and the need for charities to have a solid foundation upon which to base their efforts.

    As the regulator of Australia’s 54,900 registered charities, the Australian Charities and Not-for-Profits Commission (ACNC) has, as one of its objects, the aim to “maintain, protect and enhance public trust and confidence in the sector through increased accountability and transparency”.

    It is clear that the vast majority of Australia’s registered charities do the right thing.

    They are well-run with engaged, involved and knowledgeable staff, volunteers and boards.

    They demonstrate transparency in their reporting and their activities and take seriously their responsibilities to their supporters, stakeholders, beneficiaries and wider public.

    They do the basic things well, and they build on a solid base of good governance and sound policy to maintain and grow the health and effectiveness of their organisations.

    Conversely, it is just as clear that those charities which falter often do so because they don’t do the basics well – be it poor governance for example, poor oversight, a lack of transparency, or a dearth of knowledge or clear policy direction at the board or committee level.

    These types of basic problems can, if left unaddressed, quickly snowball into problems which can threaten a charity’s effectiveness – and even existence – and can result in the more serious instances of charity mismanagement and misconduct that we see detailed in the media.

    This is why, as a regulator, the ACNC has a fervent belief that addressing the basics can lead to larger benefits – both for registered charities and for the wider charity sector.

    And it is why the ACNC places a very clear emphasis on its education and guidance, alongside our compliance work, to help charities “understand and meet their obligations through information, guidance, advice and other support”.

    A number of our web-based publications and guidance materials focus on how charities can get those basics right, and what they can do to establish a solid base upon which they can build and improve their efforts.

    We also have regular monthly webinars which are free and cover a wide range of topics encompassing charity governance, best practice, and information and guidance on topics such as running a charity, avoiding charity pitfalls and board member roles and responsibilities.

    Many of these resources cover information central to running and operating a “healthy” charity, and are aimed at what the ACNC describes as a charity’s Responsible Persons – the people (generally board or committee members, or trustees) who are responsible for governing a charity.

    As part of the ongoing obligations with which charities must comply to remain registered with the ACNC, their Responsible Persons must ensure they are aware of their duties and carry them out properly.

    But more importantly, Responsible Persons should strive not merely to meet a “minimum standard,” but for excellent governance practice. This is why the ACNC places a focus on supporting and educating Responsible Persons.

    We strongly believe that a Responsible Person’s learning does not stop when they step onto the board, and that it is vital they grasp opportunities to grow – both to benefit their current role, and in preparation for any future role they may hold in the sector.

    Australia’s charity sector has a combined total income of more than $134 billion. It engages nearly three million volunteers and employs more staff than every industry except the retail sector. Charity staff, volunteers and leaders are overwhelmingly passionate and committed to their causes. And their boards strategically steer them to realise their mission. And as its regulator, we believe in guiding, educating and supporting those in the sector so they can continue to drive its meaningful work.

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