Emil Ford Lawyers

ACNC Governance Standards - Not to improperly use information or your position

This is the third in a series of six articles examining the significant duties of board members of registered charities. In the first article we dealt with the duty of board members to act with reasonable care and diligence and in the second we looked at their duty to act in the best interest of their charity and for a proper purpose.

In the three articles to come we will deal with the duty of board members:

The topic for this article is the duty of board members not to improperly use information or their position.

Together, all these duties form one of the governance standards for charities established by the Australian Charities and Not-for-profits Commission (ACNC): that is, board members or other responsible persons owe a fiduciary duty to their charities. This is one of the highest standards of care imposed and means that board members must be loyal to their charity and act in good faith.


DUTY OF BOARD MEMBERS NOT TO IMPROPERLY USE INFORMATION OR THEIR POSITION

Using information for personal or other interests

While serving on a board, it is likely that members will come across information that could be used for their personal gain or to further other interests. Any such information, indeed any special knowledge that board members gain while serving in that position, must only be used for the benefit of their charity.

Some practical examples

So what should board members do or refrain from doing?

 

Keeping information confidential is one of the responsibilities of board members.

Board members might hear about the details of a tendering process or the private details of staff or clients. Keeping this information confidential is one of the responsibilities of board members. The information can and must only be used in the interests of their charity.

A board member using their position for personal gain or to benefit a family member or friend is another example of improper conduct. For instance, a board member may use their position to get services that their charity provides for a friend that does not quite meet the charity’s guidelines.

Alternatively, a school council member may use their position to get their friend’s child enrolled ahead of others on the waiting list at a school. In both these instances, board members would be in breach of their duty.

Conclusion

A good way for board members to gauge whether they are in danger of misusing information or their position is for them to ask themselves:


'Am I using information I have obtained as a board member for the benefit of my charity or am I using it for my own interests or the interests of my family or others I have a relationship with?' 

This will help board members to uphold their fiduciary duty and, in turn, ensure that the charity complies with this ACNC governance standard.

In the next article in this series we will deal with the duty of board members to manage financial affairs responsibly.

If you would like further information please contact .
 

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