When we received responses to the SWOT analysis in connection to the review of our SISWP Strategic Plan, some of the responses received were
"What does our SISEAP Board of Directors do?"
"There is a gap between the Board Directors and the Members."
Before I attempt to respond to the above comments, I believe that it is timely to review why did SISWP/SISEAP becOme a Not-for-Profit (NFPs) Organisation registered with the Australian Securities and Investments Commission (ASIC).
Typically, not-for-profits in Australia register as either companies limited by guarantee or incorporated associations (which are registered with state authorities, not ASIC). However, registering with ASIC as a company limited by guarantee is common for larger, more complex NFPs with national or international operations, like SISWP/SISEAP. And it has been proven that registering SISWP/SISEAP as not-for-profit organization with ASIC has its advantages as shown by the following :
- National legal status, allowing the organization to operate across Australia.
ASIC registration allowed the organization to operate across all states and territories under a unified legal structure, avoiding the need for separate state-based registrations (which are necessary for incorporated associations).
- Limited liability protection for members.
SISEAP is a company limited by guarantee and offers limited liability protection for its members ie the clubs In the event of the organization winding up, members are only liable for a nominal amount of $50. (This structure protects individual members from personal financial risk, which is important for volunteers or board members involved in managing the NFP.
- Enhanced credibility and trust due to strict governance standards.
Registering with ASIC enhances the credibility of the organization because it is subject to strict regulatory oversight and governance standards under the Corporations Act 2001. This structure assures donors, stakeholders, and partners that the NFP adheres to national compliance and transparency standards.
- Access to charitable tax benefits and funding opportunities.
NFPs can seek registration with the Australian Charities and Not-for-profits Commission (ACNC) to become recognized as a charity, giving access to tax exemptions and concessions. I am pleased to inform that SISEAP is now duly registered with ACNC.
Our next target is to register SISEAP for Deductible Gift Recipient (DGR) status from the Australian Taxation Office (ATO), allowing donors to claim tax deductions on contributions.
- A formal management structure with defined roles and responsibilities.
As we are registering with ASIC, we are required to adherence to higher governance standards, which helps ensure accountability and transparency within the organization. This includes preparing annual financial statements, holding annual general meetings (AGMs), and maintaining accurate financial records, all of which contribute to strong governance.
ASIC registration facilitates a formal corporate governance structure, where directors and members have clearly defined roles and responsibilities. Directors and officers are bound by duties under the Corporations Act, ensuring the organization is managed properly and ethically.
- Public accountability and ability to apply for larger grants and funding
Many government grants, corporate partnerships, and large-scale donations require a formal legal structure like a company limited by guarantee. Registering with ASIC positions SISEAP to be eligible for significant funding opportunities that may not be available to smaller or less formalized organizations.
ASIC registration provides public transparency, as key information about the organization is available through the ASIC register. This includes details on directors, the company’s constitution, and financial reports. Public accountability enhances trust from donors, stakeholders, and the community.
So, what does the Board do?
The Board of Directors holds significant responsibilities to ensure the organization's success, governance, and legal compliance. These responsibilities are outlined by both the Corporations Act 2001 and the organization's constitution or bylaws.
- Directors are expected to act in good faith, with due care, and in the best interest of the organization’s mission rather than personal interests or external pressures.
- Legal compliance with ASIC and ACNC as well as financial oversight. Directors must review, approve, and monitor the organization’s budget, ensuring funds are managed responsibly and allocated in accordance with its Accurate financial records are to be maintained and financial reports, including audited statements are submitted to ASIC or the ACNC on time.
Strategic leadership and governance structures are in place and the organisation stays true to its mission and long term vision. Directors are responsible to create
- strategic plans that outline the organisation’s goals, key initiatives and metrics for success including monitoring and assessing the implementation of these plans regularly.
- The organisation is accountable to its stakeholders (including members) and operates transparently and ethically. For the biennium 2024 - 2026, the board aims to ensure that the organization maintains positive relationships with key stakeholders, including donors, volunteers, government bodies, regulators, and the community as the board believes that transparency and effective communication are essential for maintaining trust and support.
As your President, I am open to feedback, ideas and comments to strengthen positive relationships with members. I strongly believe in good communication.
