A charity board is at the heart of any nonprofit organisation.
It provides direction and ensures that the charity achieves its goals while remaining compliant with legal and ethical standards. The board comprises various members, each with specific responsibilities that work together to manage and guide the charity. Let’s take a closer look at the most common roles found on a charity board and what each entails.
Roles on a Charity Board
President (or Chairperson)
The President, often called the Chair, is the leader of the board. Their role goes beyond running meetings; they are the public face of the charity, representing it at events and guiding the overall direction of the organisation. The President ensures that the board stays focused on the charity’s mission and strategic objectives, and they often act as a mediator when conflicts arise within the board. They provide support and guidance to other board members and oversee the overall governance of the organisation.
Vice President (or Deputy Chair)
The Vice President steps in when the President is unavailable and supports them in their leadership duties. While the President leads, the Vice President acts as a second-in-command, sometimes taking on specific projects or initiatives to help the board stay on track and also overseeing the general governance of the charity.
Treasurer
As the board’s financial expert, the Treasurer oversees all aspects of the charity’s finances. They ensure that funds are used responsibly, financial reports are accurate, and legal obligations are met. From budgeting to financial risk management, the Treasurer ensures that the charity is financially sound and sustainable.
Secretary
The Secretary is the organisational backbone, responsible for managing key documents, keeping accurate meeting minutes, and ensuring that the charity complies with regulatory requirements. Their role is crucial for maintaining transparency and making sure all board activities are properly recorded and accessible. For example, the Secretary is responsible for recording the minutes of board meetings. This includes noting key decisions, discussions, and actions to be taken. Additionally, they often act as a liaison between the board and the broader organisation, sending notices, managing communications, and distributing relevant documents.
Board Members (or Directors)
Board members, whether they hold specific titles or not, are responsible for the strategic governance of the charity. While they don’t typically get involved in day-to-day operations (which are handled by staff or volunteers), their oversight ensures that the charity is staying on course. In smaller organisations, board members might also contribute to daily operations, but their primary duty remains governance and long-term planning.
Delegation and Management
In larger charities, day-to-day management is often handled by employees, such as a CEO or Executive Director, rather than the board. However, the board may delegate specific powers to senior officers to handle routine decisions. Despite this delegation, the board remains ultimately responsible for the charity’s success or failure.
Responsible People
According to the Australian Charities and Not-for-profits Commission (ACNC), “Responsible People” are those who hold governance roles within a charity, including board members and other key positions that influence decision-making and oversight. Responsible People are accountable for ensuring that the charity operates in accordance with its mission and adheres to charitable legal obligations. They play a vital role in managing finances, overseeing operations, and steering the charity towards achieving its charitable purposes. The ACNC emphasises that Responsible People must act in the charity’s best interest and exercise their powers with care, diligence, and loyalty.
Special Considerations for Different Structures
It’s essential to understand that a charity must first establish itself as a separate legal entity before applying for charity status. In Australia, the most common structures for charities include Companies Limited by Guarantee and Incorporated Associations.
Companies Limited by Guarantee (CLG)
In a CLG, there must be a minimum of three directors, and at least one company secretary. These roles come with specific legal responsibilities outlined in the Corporations Act. A CLG’s structure often includes a Treasurer and other officers to handle the charity’s financial and governance duties. The Corporations Act 2001 (Cth) governs this type of company.
Incorporated Associations
In this structure, the board or committee oversees management, and roles may vary slightly, with positions like President, Vice President, Treasurer, and Secretary taking on similar functions. The laws governing incorporated associations may differ slightly from other types of organisations, particularly regarding committee sises and reporting duties. The Associations Incorporation Reform Act 2012 (Vic) governs this type of company.
Every role on a charity board is essential for ensuring that the organisation runs smoothly, fulfills its mission, and remains accountable to the public and its members. Whether it’s the President leading the charge, the Treasurer safeguarding finances, or the Secretary keeping everyone organised, each role contributes to the charity’s overall success. Together, these board members form a team dedicated to making a difference and driving positive change through their collective leadership.
If you require assistance, please get in touch with Warlows Legal today using the contact information below.
