Compliance and Creativity: the strategic obligations of directors
One of the main roles of a not-for-profit (NFP) board of directors is to develop and cultivate a long-term strategy for the organisation, which furthers the objects of that organisation.1 Despite the fact that directors appreciate that strategic planning forms part of their role on the board, directors often err on the side of caution when strategizing, or avoid developing a strategic vision for their organisation entirely. Reasons for this include:
Making Boards Fit for Purpose
Many successful organisations have not, until now, had to navel gaze – or change. Why worry if you can keep doing the same thing successfully, year after year? However, post Hayne and post Covid 19, the landscape has changed. *“Good old boys drinking whisky and rye_“*1 should no longer govern even the local cricket club. No organisation can ignore the requirements of corporate governance, risk management and the changed landscape – post Covid 19.
An NFP Dispute: a Tale of Two Hugs
Summary This story concerns a cultural group that formed a church in a Melbourne suburb to promote their faith. During 2019 an “us and them” culture developed with a new church committee adopting an authoritarian populist governance style. I do not make judgment about that style but mention it to set the scene. I acted for certain members (the “accused” members) who faced accusations from the committee and the committee’s associates.
Changing ATO Guidance For Sporting Club Income Tax Exempt Status
Taxation Ruling Income tax: exempt sporting clubs (“TR97/22”) is the formal public ruling issued by the Australian Taxation Office (“ATO”) on 3 December 1997 and applies “to sporting organisations seeking to determine whether they are exempt from income tax”. TR97/22 states it “is to assist a club’s office holders to determine whether their club is exempt from income tax”. A club which has a main purpose of sport (or sports) will be exempt from income tax pursuant to section 50-45 Item 9.
Fulfilling Your Obligations as a Not-for-profit Director
When Mark Edmonds joined his first not-for-profit (NFP) board he was surprised by what he found. “I’d attended board meetings as a senior executive and, because the role interested me, I’d also completed a company directors course,” says Edmonds, who is currently chairman of Barwon Community Legal Centre, deputy chair of the Geelong Chamber of Commerce and a director of the Geelong Cemeteries Trust. “I was very happy to be offered a place on a local statutory committee but, from my first meeting, I could see that these people either had limited ideas about their duties and responsibilities or were paying them scant attention.
Cybersecurity – Is This a New Directors’ Duty?
When not-for-profit organisations hear about cybersecurity issues and big data breaches in large international companies such as Facebook and Target, they often make the mistake of assuming that issues surrounding cybersecurity will not apply to them. The reality is that not-for-profits are very popular targets for cybersecurity attacks. This is because they often hold a ‘goldmine’ of sensitive information, while also being less equipped to protect themselves from these threats.
Passion and Professionalism: Legal Duties of a Volunteer Board
Identify what you’re missing… and then work out how to get it! Effective not-for-profit boards possess a winning combination of passion and professionalism. It is crucial that all board members understand the personal legal responsibilities they assume when they become a director of a board. Regardless of their connection to the cause, a person should not accept a directorship or remain as director without the appropriate skills and competence to perform their role.
UPDATED – ATO Putting NFPs to the Test: Two Additional Tests for Income Tax Exemption
The Australian Taxation Office (“ATO”) released the final version of its Taxation Ruling on the two additional tests for income tax exemption for NFPs in TR 2015/1 on 25 February 2015. This article is an updated version of an article published in the Better Boards Newsletter of 9 February 2015, which deals with the predecessor Draft Ruling TR 2014/D5. Read the original article. In June 2013 the then Labor Federal Government amended the Income Tax Assessment Act 1997 (“the Tax Act”) to introduce two additional tests which NFPs need to satisfy for income tax exemption.
ATO Putting NFPs to the Test: Two Additional Tests for Income Tax Exemption
Please note: An updated version of this article that discusses the final version of the Ruling issued on 25 February 2015 as TR 2015/1 Income Tax: special conditions for various entities whose ordinary and statutory income is exempt is now available here. In June 2013 the then Labor Federal Government amended the Income Tax Assessment Act 1997 (“the Tax Act”) to introduce two additional tests which NFPs need to satisfy for income tax exemption.
The Importance of Getting Your Agendas and Minutes Right
At a board meeting on 15 February 2001, the directors of James Hardie approved an announcement to the ASX about a corporate restructure. The restructure included the establishment of a foundation which would handle all asbestos-related claims against James Hardie. The next day, the announcement was released and it stated that the foundation would be “fully funded” to meet the claims. However, it later became apparent that the foundation was not fully funded.