Associations Incorporation Act 2009 - Statutory review

The report was released in November 2015.  The recommendations include 12 amendments to the Act and four amendments for consideration when remaking the Associations Incorporation Regulation 2010.  It also recommended that Fair Trading’s guidance material reflect and respond to the nature of current enquiries made by associations and illustrate best practice meeting procedures.  They specifically mentioned the recording and management of conflict of interest. 

In terms of the Act, several of the recommendations aim to provide greater clarity or relate to processes ie issues around reserving or changing a name, etc.  Four recommendations however are particularly interesting:

 “....where an association’s constitution is the model constitution, any amendments to the model constitution take effect on the day the relevant amendment to the model rules comes into operation; and takes effect without the requirement of a special resolution of the association; and does not require the approval of the Director-General;” (referring to Section 25)(p23)

This proposal means that associations will not be required to hold an AGM to ratify to the consitution and there will be no extra fees or charges.  However associations will need to be paying attention to potential changes to the Model Constitution, have an understanding of the impact of the change and whether, where there is an option, they actually want it to apply to their organisation.

“Make provision for the duties of the Committee to include the duty of each member of a committee of an association to carry out his or her functions for the benefit, so far as practicable, of the association and with due care and diligence and include protection from personal liability for members of committee who act in good faith. (Part 4 Division 1);” (p23)

Under the current Act the only Committee or Board member duties explicitly referred to are managing conflict of interest, “and the duty to not dishonestly use their position or information” (p16).  There is also reference to a Committee or Board member’s liability if they allow their association to operate whilst insolvent. 

It was noted that the key duties, “to act in good faith for the best interests of the organisation and for a proper purpose and the duty to act with reasonable care, skill and diligence” (p 16) were not referenced.  The proposed change will align the Act with comparable legislation such as Sec 37 of the Strata Schemes Management Act 2015 (NSW).

It also proposed that Committee or Board responsibilities be included in the Model Constitution.

Other interesting recommendations included:

“Electronic voting to be allowed when association members are voting remotely, provided this is permitted by the association’s constitution (section 38);”

 “Amend section 28 to include a provision to the effect that if the Constitution provides for office bearers, the number of terms that the same person can hold the office for is specified.”

In addition, in the appendices there is a summary of the 2015 online survey data and an overview of the Fair Trading’s 2013 Discussion Paper “Improving governance within incorporated associations” submissions including Fair Trading’s response.