Governance Requirements for Incorporated Associations: An Update
Mullins Lawyers – Matt Bradford (07) 3224 9353
Following on from our article in March 2021, there have been numerous amendments to the Associations Incorporation Act 1981 (Qld) (“the Act”) that impact the governance requirements for incorporated associations in Queensland. Given that most bowls clubs are incorporated associations, it is necessary that these changes are considered and incorporated into your club’s governance policies.
New duties to prevent insolvent trading and act in good faith
As of 22 June 2022, management committee members are now required to exercise due care, diligence, and act in good faith. This extends to exercising a degree of care and diligence that a reasonable person would exercise (for the best interest of the association) and make judgments in good faith and for a proper purpose.
Further, a management committee member will commit an offence where the association is insolvent and there were reasonable grounds to suspect the association was insolvent or would become insolvent.
Generally, there will be a duty to disclose remuneration paid or other benefits given to management committee members, senior staffers, and their relatives at the associations AGM. There will also be a requirement for management committee members to disclose where they have a material personal interest in a matter to be discussed at a management committee meeting.
The Office of Regulatory Policy has advised that although these remuneration disclosure laws have commenced on 22 June 2022, it will not provide specific details of the remuneration disclosure requirements until 1 July 2023.
As a result, remuneration disclosure obligations will have no effect until such time.
Internal Grievance Procedure
Incorporated associations will be required to have an internal grievance procedure for disputes between their members and the management committee or the association itself.
In particular, the grievance procedure must include a mediation process for disputes and reasonable steps must be taken to resolve a dispute through the procedure prior to applying to the courts for direction. If the incorporated association’s grievance procedure is not consistent with the Act, it will be taken to have adopted the model rules.
Again, although these internal grievance procedure laws have commenced on 22 June 2022, the model rules have not been prepared yet. So the obligations will not actually take effect until the model rules are finalised, which is expected to be on 1 July 2023.
The Office of Regulatory Policy have advised that they plan to give incorporated associations at least one year (to allow one AGM to occur) to amend their rules, should they wish to introduce their own grievance procedure that is consistent with the model rules.
This will also allow time to determine what management committee members, senior staff and their relatives are required to disclose remuneration benefits.
If you have any queries or concerns about your incorporated association meeting the new regulatory requirements as they come into effect, please contact Matt Bradford 07 3224 0353.