Understanding Governance Standard 4: Suitability of Responsible Persons

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.