The Australian Charities and Not-for-profits Commission (ACNC) issued a Direction to RSL Queensland last week detailing actions considered necessary to address breaches of governance standard 5 and financial and operational record-keeping obligations. The Direction took into account the number of breaches, the serious, complex and persistent nature of governance issues identified, and the ACNC’s concerns with the lack of responsiveness from the Directors of RSL Queensland to progress key aspects of the Governance Plan, which RSL Queensland itself unanimously endorsed.
The ACNC considered the lack of progress left many governance failures unaddressed with an ongoing risk of breaches and further regulatory consequences for RSL Queensland.
In summary, the ACNC has directed RSL Queensland to:
- Engage a governance expert with the necessary skills and experience of not-for-profit entities to provide independent evaluation and monitoring of RSL Queensland’s implementation of the Good Governance Guide set out under the Governance Plan, in accordance with a detailed scope of works specified by the ACNC. The direction specifies strict reporting requirements to the ACNC and requires that the ACNC approves the engagement of the above-mentioned governance expert.
- Submit to the ACNC a Board Resources Policy, which clearly explains the scope and limitations of RSL Queensland Director entitlements/resources as they relate to the fulfilment of their duties, along with a copy of the governance expert’s report on the suitability and effectiveness of the policy, for review prior to finalisation.
- Submit to the ACNC a Board Meeting Standard, which sets out particular procedural and conduct requirements for Board Meetings as specified by the ACNC, along with a copy of the governance expert’s report on its suitability and effectiveness, for review prior to finalisation.
- Engage a suitably qualified independent governance expert to conduct an evaluation of the Board’s performance and effectiveness, in order for RSL Queensland to determine what training is required for the Board to enable RSL Queensland to comply with its duties under governance standard 5.
- Take action to comply with aspects of the Governance Plan, including ensuring that the RSL Queensland Corporate Governance Manager is responsible for performing the duties of a Company Secretary and that all Directors complete the requirements of a skills gap analysis conducted by the Australian Institute of Company Directors (AICD).
- Ensure all Directors commence or complete within a 12 month period a diploma course in Corporate Governance, which address duties of care and diligence, acting in the charity’s best interests and responsible financial management.
- Communicate specific information to RSL Queensland members on the recent ATO Private Binding Ruling on the characterisation of payments made to Directors that the ACNC considers is necessary to meet its obligations under the ACNC legislation.
- The ACNC media release RSL Queensland commits to rectify serious governance failures (29 March 2018)
- RSL Queensland’s Memo to Members re the ACNC Direction (29 March 2018)
- The ABC News report on this story – Charity watchdog acts after RSL Queensland couldn’t account for $400k in spending
- My 21 February post Learning from Others’ Mistakes Part 3 – RSL NSW, which included a link to the ACNC Direction to the RSL National body.
Call to action
If your Board or Audit and Risk Committee would like a briefing on the governance implications of these RSL developments (or a bundled briefing covering lessons from others’ mistakes), please contact me on 0419 347 599 or email me at email@example.com to arrange this.