New requirement to review your governance procedures
Published 5 October 2023
One of the changes made by the Charities Amendment Act 2023(external link) is that all charities now have a statutory duty to review their governance procedures at least every 3 years. The requirement came into effect on 5 October 2023, so you'll need to start planning your charity’s approach.
These governance procedures, and your review of them, includes two main aspects:
- your charity’s rules documents, which could be a trust deed or constitution
- any policies or guidelines relevant to your charity’s governance obligations, such as policies on financial management, conflicts of interest and staff and volunteers.
When you review your governance procedures, you need to look at whether your rules and other procedures are still fit for purpose, and that they allow your charity to achieve its charitable purpose and meet its obligations.
You could do this by checking your charitable purpose is clear and still relevant, and reflects your current activities. You can also check whether your rules or policies need to be updated to meet changing needs, and ensure conflicts of interest can be properly managed.
The process is self-driven, so what it looks like will be different for each charity. It could be as simple as your Chair or another officer leading a discussion on governance at your AGM, with clear minutes showing any decisions and ensuring everyone is on the same page.
As part of our forms review, we are working on ways for you to indicate in your annual return when you have carried out a review of your governance procedures.
To assist you with this review, we have guides on good governance(external link) and officer obligations(external link) available on our website.
We have also created a downloadable checklist (online [PDF, 261 KB] and print [PDF, 267 KB] versions) to help guide your review of governance procedures. In addition to your governance review, this checklist could be a useful part of your AGM, monthly committee or planning hui, or when bringing in new officers or staff.