Are Rules Binding?

2010 article, updated October 2017   In 2010 I was redrafting the rules of a community organisation and I was startled to be asked some questions by its chairman that made me realise how uninformed the general public are about society Rules.  The questioner was well-educated and experienced in business and community organisations, so being asked for clarification was even more of a surprise.  Here are the questions and my answers (somewhat expanded for this article):   How binding are the rules of the constitution? They bind the officers, committee and members.  Failure to follow the rules is the major cause of grief in societies and the major driver of the litigation I get involved in.  Judges can be very unforgiving when rules are flouted, especially by those whose duty it is to govern an organisation.  A critical element of good governance is observance of the constitution, no matter how inconvenient that may occasionally be.  Charities Services can also be expected to be vigilant in ensuring that the requirements charities’ rules or trust deeds are followed scrupulously and they can investigate charities (whether or not registered under the Charities Act) either on receipt of a complaint or as a result of a random review process.   How strictly should the constitution be followed? Strictly.   Can common sense prevail over the constitution? Absolutely not.  Certainly a constitution should be a “common sense” and readily understood document, but what is “common sense” needs to be an organisational decision, not one left to the changing whims and prejudices of individuals.   What are the implications of not following our constitution? See my first answer.  The “good mate”...

Good Governance of a Society

2010 Article updated October 2017   Governance and management There are clear differences between governance and management, and if that distinction is understood by societies and their members potential disagreements can be avoided or handled better. What is best for a particular entity will depend on the type of organisation, what it does (and how), the way it has evolved, and the abilities of the people belonging to it. Typically, the larger the membership of an entity or the more complex its activities the less its governance, management and administration will be directly handled by the members at large.  Where control is vested in an executive committee and especially in employed staff, the risk is that members are left in the dark and become alienated. Too many entities are governed and administered by people who fail to read and understand the entities’ constitutional documents, and who are simply incapable of doing a competent job.  This is no new phenomenon, but in recent years a number of scandals in the voluntary sector in New Zealand have become very public, most of which can be traced back to poor governance or administration by people without the skills, training, aptitude and/or mental attitude to do a proper job; all too frequently leading to misappropriation or misuse of (often taxpayer) funds.  The article, “Lessons from a Polytechnic?” highlighted these issues, and other examples of the mis-use of funds regularly appear in the media. As mentioned in the “Lessons from a Polytechnic?” article, the New Zealand Rugby League, over some years had major governance and organisational problems, and SPARC (Sport & Recreation New Zealand) as a...