This Commissioner’s Policy Statement is issued under the authority of the Commissioner and should be read together with the ACNC Policy Framework, which sets out the scope, context and definitions common to our policies.

Policy statement

  1. This Commissioner’s Policy Statement sets out the principles the ACNC will consider when deciding whether to allow a person who has been disqualified from managing corporations to be a Responsible Person for a charity.
  2. Where a person has been disqualified from managing a corporation but wishes to be a Responsible Person of a particular charity, that person can apply to the ACNC to do so.
  3. The ACNC will carefully consider the circumstances of each application before making a decision.
  4. The ACNC will not consider an application if the charity's rules, other legislative obligations or court orders do not allow the disqualified person to be a Responsible Person.

Legislative context

  1. The Australian Charities and Not-for-profits Commission Regulation 2013 (ACNC Regulation) sets out a set of minimum governance standards that charities must meet in order to maintain their registration with the ACNC.
  2. Governance Standard 4 (suitability of responsible entities) requires charities to take steps to ensure that its Responsible Persons are:
  • Not disqualified from managing corporations (within the meaning of the Corporations Act 2001)
  • Not disqualified by the ACNC from being a Responsible Person
  1. Section 45.20(5) of the ACNC Regulation gives the Commissioner the discretion to allow a person who has been disqualified to be a Responsible Person for a particular charity.
  2. There are three ways in which a person can be disqualified from managing corporations under the Corporations Act:
  • Automatic disqualification
  • Disqualification by the Australian Securities and Investments Commission (ASIC)
  • Disqualification by a Court
  1. Where a person has been disqualified by ASIC or a Court, that person will appear on the list of disqualified persons maintained by ASIC. However, a person that is automatically disqualified may not appear on the list.

Principles

Principle 1: Compliance with charity rules, other legislation and court decisions

  1. The ACNC cannot exercise its discretion if doing so would breach the charity's rules, or cause the charity to breach its obligations under other legislation (such as a State's incorporated associations or fundraising legislation).
  2. The ACNC also cannot exercise its discretion if doing so would be contrary to a Court decision.

Principle 2: Assessing the benefits to the charity

  1. The ACNC will consider the interests of the charity and the benefits that will flow if the disqualified person remains as (or seeks to become) the charity's Responsible Person.
  2. This may involve an assessment of the following:
  • the nature and organisational structure of the charity
  • any existing relationship that the disqualified person has with the charity (for example, if the disqualified person has been successfully involved with the charity as a Responsible Person for a number of years, it may be important to maintain that relationship)
  • the disqualified person's expertise (for example, the person has a particular area of expertise that the charity requires and which is difficult to replace)
  • the difficulty the charity has with attracting another Responsible Person of a similar calibre (for example, the charity is very small and does not have the resources to recruit another suitable Responsible Person)
  • the nature of the person's disqualification and their specific position as a Responsible Person (for example, if the person is disqualified because they are an undischarged bankrupt, the ACNC may not consider it appropriate for that person to be involved in decision-making about a charity's finances)
  • the character and conduct of the person since disqualification
  • the degree of control which the disqualified person would be able to exercise
  • the level of supervision that the disqualified person may be subject to
  • the involvement that the disqualified person is intended to have in the charity's management (for example, the person may only intend to be involved in a very specific aspect of the charity's management, such as the fundraising side)
  1. The factors listed at paragraph 13 are not exhaustive. The ACNC will consider the circumstances of each charity and the nature of disqualification.

Principle 3: Balancing the benefits to the charity and the need to maintain public trust and confidence in the sector

  1. The ACNC will balance the benefits to the charity with the need to maintain public trust and confidence in the sector, in order to decide whether it is appropriate for the disqualified person to be a Responsible Person of the charity.
  2. This may involve an assessment of the following:
  • whether there will be any risks to the public if the disqualified person is allowed to be a Responsible Person
  • whether there will be any risks to the charity's beneficiaries
  • the need to deter others from the conduct that led to the disqualification
  • the length of time left before the disqualified person is no longer disqualified (for example, a bankrupt person will generally be discharged from the bankruptcy after three years and no longer be disqualified)

Principle 4: Good decision-making

  1. The ACNC will apply the principles in the Commissioner's Policy Statement on Decision-making.
  2. An ACNC decision to allow (or not allow) a disqualified person to be a Responsible Person will be internally reviewed, in accordance with the Commissioner's Policy Statement on Reviews and Appeals.

References

Version Date of effect Brief summary of change
Version 1 Initial policy 30 June 2015 Initial policy endorsed by the Commissioner on 22 June 2015
Version 2 - amendment