boardWhether you have been formally elected or have been asked to join a board it can be seen as a great opportunity to help out your organisation as well as the community.  Especially if you have a good range of skills such as accounting, management or are very active as a volunteer around the organisation and you want to be able to provide more support.  These are all great reasons and justifications but do you understand your legal obligations.

There is often a misconception that because it is a small club, community group, charity or not for profit organisation that there are no extensive obligations as a board member.  In addition, often the fact that you are volunteering could also lead you to believe that there are no legal responsibilities.  This is not correct as you have a number of legal obligations that you must comply with no matter what type and how small your organisation is.  As a result, if these legal obligations are not complied with then you could be legally responsible and fines and penalties could apply.

As such, there are a number of issues you should consider as to whether you join a board:

  • Do you fully understand your legal obligations?
  • Do you understand the constitution or rules of your organisation?
  • Do you understand the financial reports that are prepared for the organisation?
  • Has the annual finance report been properly audited?
  • Does the organisation have a strong set of internal controls that are actively management and adhered to?
  • Does the organisation have an effective governance framework?  If so, how do you ascertain and confirm that it is being complied with? 

In most cases becoming a board member will be a very rewarding experience and most likely there won’t be any significant issues but it is still important to recognise that there are a number of obligations and responsibilities that you need to consider and understand prior to becoming a board member.

The next post provides details of an excellent resource to help you understand these obligations and responsibilities.