Tools and templates

A suite of supporting materials and content to assist users of the Principles.

Principle 1: Purpose and strategy

The organisation has a clear purpose and a strategy that aligns its activities to its purpose.

Strategic plan template

A strategic plan will clearly articulate how the organisation will achieve its purpose.

Source: Australian Institute of Company Directors


Meaning of 'not-for-profit'

This webpage covers what a not-for-profit is, benefits to members, and demonstrating not-for-profit character.

Source: Australian Charities and Not-for-profits Commission


Meaning of 'charitable purpose'

This webpage covers why a charity must have a charitable purpose or purposes.

Source: Australian charities and not-for-profits commission purpose or purposes.

Principle 2: Roles and responsibilities

There is clarity about the roles, responsibilities and relationships of the board.

Role of the board

Reference to board in this document means the group of individuals (howsoever described or called) in whom the governance, control, direction and management of the organisation is vested in accordance with its constituent documents or by legislation.

Source: Australian Institute of Company Directors


Position description of an executive director

Once the board has identified a need to appoint a new executive director, the next step in the recruitment process involves developing a position description for the role.

Source: Australian Institute of Company Directors


Role of the CEO or managing director

The most senior executive in an organisation is usually referred to as the chief executive officer (CEO). A CEO may or may not also be a director on the board of the organisation.

Source: Australian Institute of Company Directors


General duties of directors

The role of a company director is to govern a company on behalf of the shareholders or members of that company.

Source: Australian Institute of Company Directors


Role of the company secretary

The importance of the company secretary’s role has increased over the years. No longer the person who merely keeps the minutes of the board and handles board correspondence, the company secretary role can now include administering the affairs of the company and managing/supporting the business of the board.

Source: Australian Institute of Company Directors


Relationship between the board and management

A productive and harmonious relationship between the board and management is critical for good governance and organisational effectiveness. However sometimes this can be difficult to achieve in reality.

Source: Australian Institute of Company Directors


Duties Guide

This is a very lengthy document that sets out all legal duties (across legal structure).

Source: Justice Connect, Not-for-profit Law


“Becoming a Director of a Company”

This covers who can (and cannot be a director, consent and things to do before becoming a director).

Source: ASIC

Principle 3: Board composition

The board’s structure and composition enable it to fulfil its role effectively.

Appointing a new director

Periodically an organisation will have to appoint a new director. The board’s role in appointing new directors is to present suitable candidates to members for election. In larger organisations, this task may be delegated to a nominations committee.

Source: Australian Institute of Company Directors


Checklist for assessing board composition

The ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations 3e (2014), introduced a number of substantive changes, including a number of governance practices that were previously noted only in the publication’s commentary being elevated to recommendations, meaning that they must now be reported against on an if not, why not basis.

Source: Australian Institute of Company Directors


Guidance for preparing a board skills matrix

The ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations 3e, introduced a number of substantive changes, including a number of governance practices that were previously noted only in the publication’s commentary being elevated to recommendations, meaning that they must now be reported against on an if not, why not basis.

Source: Australian Institute of Company Directors


Selecting a new director

A board needs to have directors who possess a broad mix of skills and experience to be effective.

Source: Australian Institute of Company Directors


Number of directors – board size

An organisation’s constitution generally prescribes the minimum and maximum number of directors that may be appointed to the organisation’s board, as well as the minimum number of directors to constitute a quorum at board meetings.

Source: Australian Institute of Company Directors

Principle 4: Board effectiveness

The board is run effectively and its performance is periodically evaluated.

Improving board effectiveness

Board performance is vital to the success of an organisation. To ensure the board is a strategic asset, it must have the right mix of skills and knowledge as well as the ability to work effectively as a team. Today's rapidly changing business environment also requires boards to be flexible and responsive in order to meet unexpected needs and challenges.

Source: Australian Institute of Company Directors


Board evaluation and director appraisal

With attention on corporate governance and accountability increased by the global financial crisis, there is an expectation that the performance of boards and individual directors will be regularly evaluated.

Source: Australian Institute of Company Directors


Board committees

Boards often use committees to increase overall efficiency. Work can be delegated to committees to more effectively deal with complex or specialised issues, and to manage workloads by making better use directors’ time and expertise. It is critically important to recognise that committees only make recommendations for action to the full board, which retains collective responsibility for decision making.

Source: Australian Institute of Company Directors


Nomination committee charter

The nomination committee oversees and monitors board and senior executive performance, succession planning and the company’s diversity policy. T

Source: Australian Institute of Company Directors


Remuneration committee charter

The remuneration committee assists the board in the oversight of the remuneration, bonuses and incentives paid to the CEO and employees.

Source: Australian Institute of Company Directors


Risk committee charter

The risk committee oversees and monitors the company’s risk management policies and processes.

Source: Australian Institute of Company Directors


Role of the audit committee

An independent audit committee is a fundamental component of good corporate governance.

Source: Australian Institute of Company Directors


Board recruitment

The board must ensure that it has the right mix of competencies to meet the company’s evolving needs. Managing the process that encompasses succession planning, nomination and director recruitment is one of the board’s most important tasks. A nomination committee often performs the details of this task. Following are a series of points to consider when the board needs to recruit one or more new directors.

Source: Australian Institute of Company Directors


Appointing a new director

Periodically an organisation will have to appoint a new director. The board’s role in appointing new directors is to present suitable candidates to members for election. In larger organisations, this task may be delegated to a nominations committee.

Source: Australian Institute of Company Directors


Template letter of appointment

Before a person is appointed as a director, they must provide a formal, signed letter of consent to act as a director to the organisation he or she is joining. The organisation usually responds with a letter of appointment. However, this is not a legal requirement. The appointment letter affords an opportunity to provide the new director with more information such as details of the duties and responsibilities associated with the role and available resources. The letter is usually signed by the chair of the board.

Source: Australian Institute of Company Directors


Reporting to the board

S 180 (2) (c) of the Corporations Act 2001 (Cth) creates a responsibility for directors to keep themselves informed, and one of the biggest challenges a non-executive director faces is how to access the information they need, verify its reliability and use it to make sound decisions.

Source: Australian Institute of Company Directors


Succession planning

Boards have to plan for orderly succession and renewal as well as be prepared for everything from sudden departure to sudden illness or death of a board member or chief executive officer. It is important to understand that the disruption that occurs when companies change their CEOs and chairs in too rapid succession takes a long time to repair.

Source: Australian Institute of Company Directors


Directors’ meetings

Directors’ meetings refer to board or board committee meetings where different viewpoints are considered before deciding on a course of action.

Source: Australian Institute of Company Directors


Annual board calendar

A well-planned meeting schedule identifies the year’s key issues and helps directors to ensure that matters requiring their attention are addressed in a timely and logical manner.

Source: Australian Institute of Company Directors


Board meeting agenda

The purpose of a board meeting agenda is to improve the effectiveness of board meetings. It is the tool the chair uses to keep boardroom discussions focused. Although each board will have an agenda that reflects specific topics of relevance to a company at that time, a number of general items will be included on most agendas.

Source: Australian Institute of Company Directors


Board papers

Board members gain a great deal of information about the decisions they need to make through the papers they receive prior to a board meeting. Papers cover a variety of functions, from providing general information to a call for action.

Source: Australian Institute of Company Directors


Boardrooms in the digital age

The ever increasing use of electronic devices such as smart phones, laptops and computer tablets (for example, Apple iPads, Windows Surface, etc.) has given rise to a number of issues and questions regarding the use of technology by directors in board meetings and more generally, that is outside the boardroom.

Source: Australian Institute of Company Directors


Toolkits

This page contains a Guide to Running a CLG and a Guide to Running a Charitable CLG

Source: Justice Connect, Not-for-profit Law


Holding Meetings

This webpage covers a number of different types of meetings, namely management meetings, sub-committee meetings and annual and special general meetings. There is information for each jurisdiction in Australia.

Source: Justice Connect, Not-for-profit Law


Quick tips: Holding meetings

This webpage offers tips on types of meetings, and what to do before a meeting, during a meeting and after a meeting.

Source: Australian Charities and Not-for-profits Commission

Principle 5: Risk management

Board decision-making is informed by an understanding of risk and how it is managed.

Not-for-profit: Assessing NFP risk

Alexandra Cain considers the governance risks faced by NFP boards and explains how they can be addressed.

Source: Australian Institute of Company Directors

Principle 6: Performance

The organisation uses its resources appropriately and evaluates its performance.

Financial literacy for NFP directors

A key role for a director is to ensure the financial viability of the NFP organisation so that it can achieve its outcomes. Many NFPs may have a treasurer but this does not change the responsibility all directors have to make sure that the organisation makes effective use of its (often limited) resources and also make sure that it continues to remain solvent.

Source: Australian Institute of Company Directors


Insolvency safe harbour

The following company director guide contains suggested steps the AICD considers likely to be relevant when pursuing a restructuring plan and attempting to trigger the safe harbour protection from civil liability for insolvent trading provided in s 588GA(1) of the Corporations Act 2001 (Cth).

Source: Australian Institute of Company Directors


Performance review and appraisal of the CEO

Accountability for performance outcomes is a key tenet of good corporate governance, and as the most senior executive in the organisation it is important that the Chief Executive Officer (CEO) is held to account by the board.

Source: Australian Institute of Company Directors


Important agreements

This section of the Not-for-profit Law website covers contracts, federal and state funding agreements, IT agreements and leases to help organisations get the details right from the start to avoid problems later.

Source: Justice Connect, Not-for-profit Law


Board performance

Create more focused and better-presented charters outlining the remit of key company committees, including audit, remuneration and nomination committees.

Source: Australian Institute of Company Directors

Principle 7: Transparency and accountability

The board demonstrates accountability by providing information to stakeholders about the organisation and its performance.

General meetings of members

A meeting is a gathering that has a purpose. General meetings include any meetings of members (usually shareholders) such as annual general meetings (AGMs), meetings of different classes of members and creditors’ meetings.

Source: Australian Institute of Company Directors


Financial reporting requirements

The Corporations Act 2001 sets out statutory requirements for financial reporting.

Source: Australian Institute of Company Directors


What directors should consider when preparing financial statements

Although all businesses must maintain financial records, not all are required by law to produce financial statements in accordance with the Australian accounting standards.

Source: Australian Institute of Company Directors


What directors should consider before approving financial statements

Directors do need to remember that they are not expected to be experts in financial reporting requirements.

Source: Australian Institute of Company Directors


What to consider when reporting underlying profit

Profit that is reported other than in accordance with International Financial Reporting Standards (IFRS) in annual reports, profit announcements or other company reporting can be called non-IFRS profit. Non-IFRS profit can be described in a number of ways and the most commonly used is underlying profit/earnings.

Australian Institute of Company Directors


Members

This section features information and resources on members’ rights and obligations.

Source: Justice Connect, Not-for-profit Law

Principle 8: Stakeholder engagement

There is meaningful engagement of stakeholders and their interests are understood and considered by the board.

The People Involved

This guide provides detailed information on risk management strategies and different insurance products for not-for-profit organisations.

Source: Justice Connect, Not-for-profit Law 


Complaint handling by charities and not-for-profits

Download the fact sheet on complaint handling by charities. It includes a Model Policy and Model Procedure and provides information on the benefits of handling complaints well and how to use the model documents.

Source: Justice Connect, Not-for-profit Law

Principle 9: Conduct and compliance

The expectations of behaviour for the people involved in the organisation are clear and understood.

Directors’ right to seek external professional advice

Generally, boards make decisions on behalf of organisations by resolutions passed at duly convened meetings of the board or by circular unanimous resolutions in writing of all directors.

Source: Australian Institute of Company Directors


Complaint Handling

This is the policy and framework developed by the Australia Council for the Arts, Australian Council for International Development, Community Council Australia, Public Fundraising Regulatory Authority, Governance Institute of Australia, Fundraising Institute Australia, Our Community, Volunteering Australia, Philanthropy Australia, National Roundtable of Nonprofit Organisations and Justice Connect.

Source: Justice Connect, Not-for-profit Law


Disputes and conflict

This section of the website deals with both internal and external disputes and conflicts that an organisation may face.

Source: Justice Connect, Not-for-profit Law

Principle 10: Culture

The board models and works to instil a culture that supports the organisation’s purpose and strategy.

Culture top of mind, but low on agenda

While NFP directors give the culture of their organisations a resounding endorsement, not enough boards in the sector are actively managing their cultures, the 2017 NFP Governance and Performance Study found.

Source: Australian Institute of Company Directors


Managing culture: a good practice guide

Source: Governance Institute of Australia


Ethical frameworks: Codes of ethics and codes of conduct and A Guide to Ethical Decision Making

Managing ethics in the workplace involves identifying and prioritising values to guide behaviours in the organisation. This can be achieved through the development of codes of ethics and conduct and associated policies and procedures.

Source: NSW Council of Social Services