BEFORE ENGAGING IN GOVERNANCE – A CHECKLIST

Before becoming a member of a not-for-profit board or committee, we recommend that you should do some serious homework, because being in governance is not a prize for good behaviour or beauty, but involves serious responsibilities and potential personal liabilities.  You need to have a thorough understanding of the organisation’s purposes and activities, and whether or not you will be able to work with the organisation and those who govern and manage it. The following checklist should assist if you are assessing whether you should become involved in a not-for-profit’s governance.  Some issues are repeated under different headings, and it is generic rather than specific, so it may not be exhaustive.  You need to consider the following issues when considering taking on the responsibilities of not-for-profit governance: 1.  Check the organisation’s legal and reputational status What kind of legal entity is the organisation? If the organisation is an incorporated society, it may be registered under one of several statutes; but most common are societies incorporated under the Incorporated Societies Act 1908 or Charitable Trusts Act 1957. (N.B. If the current proposed Incorporated Societies Bill is enacted there will be a new modern statute, and societies currently incorporated under the Charitable Trusts Act will transfer to the new statutory regime, and those in governance of societies will need to comply with new and significantly greater statutory obligations). If the organisation is a trust or other entity, there are different legal obligations (and if the entity is a charitable society or trust, the charitable purposes are paramount). If the organisation is a company, it and you will have to comply with...