3. The role and duties of the management committee
Membership of a management committee is not necessarily onerous, but it does carry with it a number of significant responsibilities. It is useful to consider these responsibilities as falling into two categories: those of the committee acting as a group, and those responsibilities held by its members as individuals. In practice, however, each member should consider every group responsibility as an individual responsibility. As discussed later, when it comes to any failure to meet a responsibility, the Act places the liability on the individual, not the group.
3.1 Group responsibilities
The overall role of the committee is to manage the association in accordance with the purposes or objects of the association as stated in its rules. In undertaking this role, the committee must fulfil a number of legal responsibilities, which include making sure that:
- the association complies with its obligations under the Act (there are several of these and they are separately highlighted in a table at the end of this section; you can view these obligations now);
- the association complies with its rules and any funding agreements or other contracts;
- the association complies with its legal responsibilities to any employees, such as complying with employment awards or agreements, paying tax and superannuation and providing a safe working environment (these matters are dealt with in later sections);
- the association complies with its legal responsibilities to members, volunteers and any clients or customers who may use the association's services;
- an assessment has been made whether insurance cover is required and to what extent; and
- any other relevant laws or regulations are complied with.
Specific financial responsibilities include making sure that:
- there is compliance with requirements under the Act in relation to financial accounting and reporting to members;
- the association can pay all its expenses (it may assist to develop a budget annually);
- the conditions of any funding agreement are followed;
- the accounts are audited, if required by the association's members, rules or funding agreements; and
- good risk management procedures are in place. For example, a requirement that two authorised signatories sign off on any association cheque and that another member or employee completes cheque account reconciliations can be a good method for minimising risk.
Depending on the size and nature of your association, other areas of responsibility may include the management of staff, the development and implementation of policies and procedures and the provision of quality services to members and/or clients.
Although there is no common law authority on the duties of members of incorporated associations, it is assumed that association committee members owe the same duties to association members as company directors owe to members of a company. This means that, when committee members exercise their powers and responsibilities to act on behalf of the association, they must:
- act in good faith and in the best interests of the association;
- not make improper use of information or their position for personal profit;
- avoid any conflicts of interest; and
- exercise powers in accordance with the rules of the association.
To act in good faith means to act in the best interests of the association and not to engage in any conduct that harms the association. Committee members and office bearers are expected to act with honesty and integrity when carrying out their duties. They may not misuse their position or promote their own interests ahead of those of the association. They must also make sure that they are fully informed about the association by keeping up to date with matters, attending meetings, reading agendas and minutes and asking questions. In the event of a problem, dispute or legal challenge, committee members cannot claim they 'did not know' about the rules and activities of the association.
3.2 Individual committee members' responsibilities
3.2.1 Complying with the Act
Every committee member of an incorporated association is obliged to take all reasonable steps to ensure the association complies with its obligations under the Act. A committee member who fails this obligation commits an offence and is liable to prosecution and a substantial fine if convicted. This personal obligation of committee members is a very important one. It means that all committee members must do what is reasonable to make sure that the obligations on the association under the Act, such as those outlined later in this section, are complied with.
The duties of individual committee members described in their association's rules (or later in this section) may assist them in working out what are the reasonable steps for them to take.
3.2.2 Conflicts of interest
Committee members must not put themselves in a position where there is a conflict between their duties and responsibilities to the association and their personal interests.
The Act requires members of the committee to disclose any direct or indirect financial interest they may have in any contract, or proposed contract, entered into or being considered by the committee. The disclosure must explain the nature and extent of the interest and must be made as soon as the member becomes aware of it. Failure to declare an interest as soon as possible is a criminal offence and could result in a fine.
If a committee member declares a monetary interest in a contract or proposed contract, the Act also provides that:
- the disclosure must be recorded in the minutes of the meeting; and
- the committee member with the conflict of interest must not take part in any committee deliberations or voting in relation to that contract. In fact, it would be preferable if the relevant member left the room while the rest of the committee discussed and voted on the contract.
Brian sits on the management committee of the Harmony Community Development Association Inc. The Association is planning to give small grants to local groups for tree planting programs. Brian is the president of the local tree planting co-operative which wants to apply for the funds. As the co-operative is a potential benefactor of the grant, Brian must tell the management committee of his involvement in the co-operative.
A useful way to help committee members comply with these requirements is to make "disclosures of interest" a standard item on the committee meeting agenda. More often than not, there will be nothing to note, but it serves as a constant reminder to members of the need to remain aware of conflicts of interest.
3.2.3 Complying with the rules
As noted above, the management committee is responsible for implementing the rules of the association and ensuring that the association meets its obligations under the Act. They must comply with the rules of the association at all times and act within those rules. While this looks to be stating the obvious, it is unfortunately not always the case.
It is good practice for all committee members to be supplied with an up-to-date copy of the association's rules, and be familiar with at least its main and most-used provisions. It may also be beneficial for committee members to bring the rules with them to every meeting. As a minimum, the Secretary should ensure that a copy of the rules is on the table at each meeting.
3.3 Roles of particular office bearers
The roles of some common office bearers are summarised below.
Chairperson (sometimes called the President)
The chairperson is usually the formal 'voice' of the association and is responsible for the overall co-ordination of the activities of the association. The chair is generally responsible for:
- chairing meetings;
- signing documents on behalf of the association;
- ensuring all relevant information is made available to committee members;
- ensuring the association is run according to its rules and any other strategic plan that has been agreed to;
- resolving disputes and grievances;
- initiating projects;
- overseeing activities and projects; and
- representing the association at external meetings and events.
In the chairperson’s absence, the vice-chairperson can represent the association and preside over meetings. See Chapter 6 – Meetings for the role of the chairperson in meetings.
The treasurer is primarily responsible for managing the finances of the association. This involves:
- maintaining all financial records;
- monitoring the income and expenditure of the association;
- keeping committee members informed of the financial position of the association;
- preparing and presenting financial statements to the Annual General Meeting;
- allocating funds;
- developing budgets for new projects;
- making payments and bank deposits;
- preparing and managing the budget;
- representing the association on funding applications; and
- maintaining custody of all securities, books and documents of a financial nature.
The secretary is generally responsible for day-to-day administrative tasks, which include:
- maintaining the register of members;
- arranging meetings;
- assisting the chairperson to prepare the agenda;
- sending out notices for meetings;
- keeping minutes and records;
- attending to correspondence;
- making sure all letters and other documents are properly filed;
- organising activities and events;
- preparing newsletters; and
- maintaining custody of all books, documents, records and registers of the association.