Over the past several weeks we have been discussing good guidelines which can keep meetings efficient and effective. Guidelines which are relevant whether you are part of a large organisational board, small community group or mid-sized school committee. Good guidelines can transform a meeting from ‘ground hog day’ agendas, to meetings where issues and outcomes are carefully weighed, everyone’s view is considered and real progress is made through a majority agreement on what is the most appropriate next course of action. The most effective transformation though, occurs when all members of the group understand their responsibilities, as well as the processes involved in coming to a conclusion.

Make sure you check out the past Blogs on our website here as we have discussed everything from the creation and importance of a well drafted agenda to the responsibilities of the Chair. We hope that this information has, or will be valuable to you in the future.

Our Final Blog in this series is on due diligence for joining an organisations governing board or committee. Due Diligence in this situation, put simply is the research, review and assessment of an organisation’s financial position, governance model and compliance status that it would be prudent to undertake before you decide to put your hand up to take on a role of responsibility (and in some cases potential liability) within an organisation.

Unfortunately many organisations do not make much (if any) of their information easily available to potential board members or officeholders before signing up for a role. It may be helpful for you to know that there are few legal justifications for an organisation to refuse its members access to the financial records of the organisation and its governing rules, constitution and/or by-laws. In fact in our experience if the governing body refuses any reasonable request to provide these items to a potential board member, this is the first ‘red-flag’ that the organisation is potentially not compliant with some of its current reporting obligations and may not therefore be a safe organisation to be involved with.

If you do happen to be met with resistance, try asking what the objection is, if it is simply a matter of confidentiality then it may be possible to overcome this objection by offering to sign a confidentiality and non-disclosure agreement.

But we are getting ahead of ourselves – so here is our checklist which will get you started with Due Diligence and help you avoid an unfortunate situation:

1. Check out who is already on the Committee.

• Do you know any of them personally?

• Do you trust them? Are they reputable law abiding people who generally do the right thing?

• Do you get along with them well?

• What are their primary aims for being on the committee? Are their motives personal or organisational focused?

• Are there appropriate conflict of interest policies and practices in place?

• Are any of them qualified or a professional advisor – especially those who have an Office such as The Secretary, Chair, Treasurer or Public Officer?

2. Quantify the commitment.

• How often does the Committee (or Board) meet?

• Where do they meet, on what day of the week and at what time?

• How long do the meetings usually go for?

• How many days in advance of the meetings do the Agenda and Reports get circulated?

• What are the expectation’s around pre-reading in preparation for meetings?

3. Ask to be provided with copies of the following:

• Minutes of meetings from the last 6 months,

• Minutes from the last AGM,

• Constitution (otherwise known as the Body’s Rules),

• Any By-laws that are current, and

• Financial Statements for the last Tax year rendered,

4. What sort of entity is the organisation itself?

• Is it an Incorporated Association

• Is it a Company Limited by Guarantee?

• What is the liability of the members (if any)?

5. What is the Governance structure of the organisation?

• Are their sub-committees? If yes, who do they report to?

• Are the sub-committees activities funded individually or from pooled funds of the organisation?

6. Does the organisation employ paid staff or operate with volunteers?

• What agreements are in place to properly document this?

• Is there compliance around proper employment record keeping?

• Are the appropriate withholdings and Employer contributions being made?

• Who oversees this aspect of the organisations operations?

7. Does the organisation own any income producing assets?

• Are these properly accounted for in the balance sheet of the organisation?

• If the assets are real property, when was the last time the asset was valued by a professional valuer?

• Are the assets adequately insured?

• Are there any personal loans from founding members or financial institutions?

• Have these loans been properly documented and are the repayments up to date?

8. Does the organisation comply with all of their statutory obligations?

• Do they comply with health and safety policies?

• Child protection policies (if children are involved in the organisations activities)? This includes things such as mandatory notification for abuse and neglect training and police checks.

• Is the organisation attentive to the particular statutory compliance relevant for the organisation in question?

• Does the organisation have a culture where appropriate compliance is encouraged not dismissed? If the little things are overlooked then it may be likely that there are other obligations which are not be held to.

Due Diligence may be the difference between a harmonious and effective governance membership and one which could potentially end in disaster.

If you require any legal advice then do not hesitate to contact us at Tri-meridian. If you do currently find yourself in a situation as part of an organisation which you believe may not be complying with the relevant legislation, then please contact us at Tri-meridian and we can advise you on your next step.

For further information, please contact the author.

This article is posted in Adelaide, South Australia by Tri-meridian Corporate & Commercial Law and is intended to be used as a guide only. It is not, and is not intended to be, advice on any specific matter. We do not accept responsibility for any acts or omissions resulting from reliance upon the content of this article. Before acting on the basis of any material in this article, we recommend that you consult your professional adviser.