The SLSC Board is responsible for the overall control and governance of the SLSC. Directors play a critical role in the efficient and effective structure, organisation and direction of an SLSC as they exist to manage decisions affecting the SLSC regulations and policies of the SLSC on behalf of its members.
With this responsibility, they are also subject to increasing SLSC performance scrutiny levels, especially regarding achieving funding outcomes from parent and external bodies and keeping up to date with organisational changes. There have been growing expectations that all not-for-profit (NFP) and Charity Boards, including SLSC Boards, should be more proactive in meeting their legal responsibilities and SLSC’s individual needs in recent years.
In keeping with best governance practice, an SLSC’s Board should operate and enact their role focusing on five major governance principles.
- Clear delineation of governance roles
- Effective governance processes
- Effective governance controls
- Governance improvement
- Member responsiveness
Directors owe specific duties to the SLS organisation and its members under their fiduciary duty. Directors are bound to exercise rights and powers in good faith and for the organisation’s benefit and are required to comply with both common law duties and statutory duties. If directors fail to satisfy their duties, they may be liable to compensate members of the organisation or third parties.
Legal obligations of an SLSC Board Director include:
- Ensuring confidential information remains protected and confidential
- Duty of care, skill and diligence
- Duty of good faith and honesty
- Duty to act for a proper purpose
- Duty to avoid conflict and disclose interests
- Those relating to incurring debt (insolvent trading).
The Australian Institute of Company Directors has provided written advice about Good Governance Principles and Guidance for non-profit organisations such as SLSCs. CMT members should refer to this advice for more information in addition to the SLSNSW Governance and Compliance webpage and members of the SLSNSW Membership Team who can provide you with support to address any governance concerns or queries.
Optional reading:
The following sources of linked information can also help you to achieve ‘good governance’ at your SLSC: