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Charities & Not-For-Profits Law in Australia

Remunerating Charity Board Members

Posted in Compliance, Fundraising, Governance

The ACNC have recently released an information paper ‘Remunerating Charity Board Members‘ for charities considering paying board members for their services as a board member.

The term ‘board members’ is used throughout the information paper to generically refer to the responsible persons of a charity, such as committee members, directors or Trustees.

The ACNC have confirmed that it is permissible for charities registered with the ACNC to pay their board, provided that the payments are:

– in furtherance of the charity’s charitable purpose;

– permitted under the charity’s governing document; and

– properly authorised within the charity.

The information paper provides a range of reasons why a charity may or may not choose to remunerate its board which may be valuable for charities considering this issue.

The Importance of Transparency

The ACNC suggest that charities which choose to remunerate board members should have a clear policy in place outlining how remuneration is determined, the process of approval, and how the charity will address any concerns or disputes of board remuneration.

The ACNC has also highlighted the importance of transparency for board remuneration and that stakeholders should be given the opportunity to raise any concerns about these payments. Charities are reminded that this responsibility is found within ACNC Governance Standard 2 – Accountability to Members and are encouraged to familiarise themselves with these obligations.

Medium and large sized charities are reminded that they must disclose the remuneration for key management personnel (such as board members) in accordance with the Australian Accounting Standards Board Related Party Disclosures Standard (AASB 124) in their Annual Information Statement lodged with the ACNC.

If your charity is considering remunerating its board members please do not hesitate to contact us for further information.

Bill d’Apice, Partner | +61 2 9233 9013 | wdapice@makdap.com.au