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Understanding Governance Standard 4: Suitability of Responsible Persons

This article explains Governance Standard 4, which is minimum requirement for operating as a registered charity in Australia.
Child squatting in dirt wearing a white t-shirt, blue jeans with rip in knee and red gumboots with red bucket of dirt to left. Camera angle is looking down on child's outstretched arms whose fists are covered in mud.
© ACNC

Governance Standard 4 requires charities to take reasonable steps to be satisfied that its Responsible Persons (its board or committee members, or trustees) are not disqualified from:

  • managing a corporation under the Corporations Act 2001 (Cth) (the Corporations Act), or
  • being a Responsible Person by the ACNC Commissioner, within the previous 12 months.

If a charity is not satisfied, it must not appoint this person. If the person is already appointed, the charity must take reasonable steps to remove them as a Responsible Person.

The requirement to ensure that Responsible Persons are not disqualified from managing corporations applies even if your charity is not a company.

Responsible Persons share responsibility to ensure that charity is well-governed, responsibly managed and is meeting its obligations under the law. A charity’s members, beneficiaries and the public need to have confidence in the suitability of their Responsible Persons for the charity to operate effectively.

Governance Standard 4 makes sure that registered charities are not controlled by people who may pose a risk to the charity’s financial position or the pursuit of its charitable work.

© ACNC
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Governance Standards Part B: Governance Standards 4-6 and how to Wind Up a Charity

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