There are a number of common myths and misconceptions about the ACNC's Governance Standards. Here we respond and provide information about the Governance Standards and how they affect your charity.
Myth: ‘We need to change our governing document to meet the standards.’
Response: Probably not. Most charities are likely to already have clauses (in relation to their not-for-profit nature, purpose and meeting requirements) that will meet the Governance Standards.
However, if there is a specific part of your charity’s governing document that prevents it from meeting any aspect of the standards, your charity will have to make changes to ensure it meets the Governance Standards.
Myth: ‘We need to get professional advice on how to meet the Standards.’
Response: Because these are minimum standards, the ACNC expects many charities will already meet most or all of them. For example, charities that already comply with obligations under incorporated association legislation or the Corporations Act 2001 (Cth) will already meet most of the standards.
Read our guidance on each Standard - and the common steps you can take to comply - before you spend time or money on meeting the standards. The ACNC expects that most charities will not require professional advice to meet the Governance Standards.
Myth: ‘The Governance Standards require our charity to prove we comply with every law in Australia.’
Response: No. Governance Standard 3 does not require your charity to send the ACNC evidence that it is complying with every Australian law.
The ACNC will generally only investigate alleged serious breaches of law that are likely to affect public trust and confidence in charities.
Myth: ‘The Governance Standards say that our charity can’t break any laws otherwise the ACNC will investigate us.’
Response: No. Governance Standard 3 does not mean that the ACNC will investigate every alleged breach of law by a charity.
We will generally only investigate serious breaches that are likely to affect public trust and confidence in charities. This includes fraud, money laundering or terrorist financing offences.
We generally will not investigate breaches of law or issues that other regulators or the police are in a better position to investigate.
Myth: ‘Because of the introduction of the Governance Standards, charities will have to meet the requirements of both ACNC and ASIC.’
Response: The Governance standards are not intended to duplicate obligations under the Corporations Act.
For charities incorporated as companies with the Australian Securities and Investments Commission (ASIC), part of your obligations under the Corporations Act (relating to meetings) have no longer applied since 1 July 2013. These obligations were broadly replaced by Governance Standard 2 (accountability to members). For more information, read our page on charities registered with ASIC and the ACNC.
Myth: ‘We are a religious charity so the Governance Standards won’t apply to us.’
Response: The Governance Standards will apply to all registered charities except Basic Religious Charities. Basic Religious Charities are a specific type of religious charity that must meet a number of additional requirements.
Myth: ‘Each of our charity’s Responsible People will have legal obligations under the Governance Standards.’
Response: No. It is the charity that has the responsibility for meeting the Governance Standards, not the individual members of a charity’s governing body (known as Responsible People). While Governance Standards 4 and 5 relate directly to Responsible People, the obligation applies to the charity itself to take reasonable steps to ensure its Responsible Persons meet certain requirements.
Your charity’s Responsible People still have responsibilities under other laws relevant to your charity and the common law. They should be familiar with and meet these other obligations as part of fulfilling their role.