Quality Principle 7. Governance

Development and humanitarian organisations are governed in an accountable, transparent and responsible way.

Rationale

Quality Principle 7 recognises the importance of building trust with all stakeholders through compliance with standards and through ethical and sound decision-making. It covers all aspects of good governance, extending beyond the establishment of a formal governing body and associated mechanisms, and including core organisational Commitments to governing responsibly, accountably and transparently. Quality Principle 7 incorporates obligations covering governing instruments, governing body policies, transparency, annual general meetings, conflicts of interest, legal requirements and complaints handling.

To foster public trust and ensure good conduct in aid and development work, ACFID’s members have the responsibility to promote legal and ethical behavior, and to monitor the actions of staff and partners to ensure no wrongdoing or impropriety. In some contexts in which our members operate, there is a heightened risk of corruption, fraud or bribery, and members should act, and be seen to act, in a way that is honest and transparent. Voluntary governing bodies of member organisations are expected to be ‘responsible persons’ of integrity and able to make independent and objective decisions focused on achieving aid and development objectives. Member organisations have a duty to carefully manage any real or perceived conflicts of interest because reputational damage can affect the whole sector.

The language and requirements of this Principle are aligned with ACNC requirements which have come into effect since the Code was last revised. There was broad endorsement for this Quality Principle during consultations. 

Quality Principle 7 is implemented through four Commitments by ACFID Members.

Commitments

Commitment 7.1 We are not-for-profit and formed for a defined public benefit.

Compliance Indicators

Compliance with the Commitments will be assessed against the following Compliance Indicators. All of the applicable Compliance Indicators must be met by every ACFID Member to be considered compliant with the Code. Each of the Compliance Indicators has one or more compliance Verifiers. Verifiers are the description of evidence that is required to substantiate compliance with each Compliance Indicator. Guidance is also provided. 

7.1.1 Members define their public benefit and specify the rules to ensure that they operate as a not-for- profit entity.

Verifier

A governing instrument which outlines the relevant rules for a not-for-profit entity and is available on the organisation’s website.

Guidance

Different organisations operate under different structures. While ACFID does not advocate the adoption of any particular model, the ACFID Code of Conduct requires that the structure of the signatory organisation is clearly documented through a governing instrument, with a clear statement of purpose that seeks to provide a benefit to the public, and clauses or rules that relate to charitable purpose or not for profit nature. A not-for-profit entity is one that does not operate for the profit, personal gain or other benefit of particular people.

The following are example clauses that would show that the organization is not-for-profit:

  • Not-for-profit clause: The assets and income of the organisation shall be applied solely in furtherance of its objects and no portion shall be distributed directly or indirectly to the members of the organisation except as bona fide compensation for services rendered or expenses incurred on behalf of the organisation.
  • Dissolution or Winding up clause: In the event of the organisation being dissolved, the amount that remains after such dissolution and the satisfaction of all debts and liabilities shall be transferred to another organisation with similar purposes which is not carried on for the profit or gain of its individual members.

Some Commonwealth, state and territory incorporating regulators provide template or ‘model’ governing documents for charities with certain legal structures.

The ACNC also provides a template constitution for a small company limited by guarantee with charitable purposes which can be found in the Resources Section below.

Good Practice Indicators

The following Good Practice Indicators describe a higher standard of practice than that set out in the Compliance Indicators. While Members do not need to meet the Good Practice Indicators to be considered compliant with the Code, they will self-assess against these indicators once every three years. This provides a clear pathway for Members to strengthen and improve practice over time.

  • Remuneration policy or guidelines that set conditions on payments or expenses paid to governing body members is in place.
  • Periodic review of compliance with organisational governing instrument is undertaken by the governing body.

GUIDANCE AND RESOURCES 

Good Practice Guidance

Here are some practical suggestions for your organisation to further deepen and improve practice over time. 

Not-for-profit status

  • Include clauses in your governing instrument which clearly establish the non-for profit status and practices of your organisation
  • Being not-for-profit relates to how profits or surpluses are used. A not-for-profit organisation can still make a profit (or surplus), but assets and income can be used solely towards achieving the organisation’s objectives and not distributed among members.
  • Include a clause in your governing instrument describing how you would use any surplus 

Governing body

  • Include clauses in your governing instrument which clearly establish the voluntary status and practices of your organisation. 
  • If any member of the governing body was paid for work performed in a capacity other than as a member of the governing body, the organisation must disclose the payments made in their annual financial statements.
  • The inclusion of additional clauses in the governing instrument or the development of a governance policy or board charter could elaborate on the clauses within the governing instrument by detailing the reimbursement of any reasonable expenses incurred for governing body members for costs associated with attendance at meetings or in the conduct of their duties; and how governing body members carrying out other professional functions for the organisation such as a consultancy, will be remunerated. 

Resources

Commitment 7.2 We meet our legal and compliance obligations.

Compliance Indicators

Compliance with the Commitments will be assessed against the following Compliance Indicators. All of the applicable Compliance Indicators must be met by every ACFID Member to be considered compliant with the Code. Each of the Compliance Indicators has one or more compliance Verifiers. Verifiers are the description of evidence that is required to substantiate compliance with each Compliance Indicator. Guidance is also provided. 

7.2.1 Members are registered and meet their reporting and legal obligations to the relevant authorities.

Verifier

  • Registration with the Australian Charities and Not-for-Profit Commission (ACNC).
  • Up-to-date reporting (Financial and Annual Information Statement).
  • Registers or documented records of compliance, including but not necessarily restricted to legal obligations and registrations.

Guidance

ACNC registration and reporting requirements are clearly outlined on the ACNC website which can be found in the Resources Section below.

All signatory organisations, regardless of size, are subject to a complex range of requirements and legislation – such as corporations laws, rules of incorporation of associations, fundraising and charitable institutions, privacy, equal employment opportunity principles, occupational health and safety standards, human rights and anti-discrimination, intellectual property, child protection and copyright, as well as other external obligations – such as code compliance or certifications.Registers of documented records of compliance may be presented in various ways, but will need to show that the organisation has a comprehensive understanding of its compliance obligations and actions that are due to meet those obligations. It might be presented as a table of legal and regulatory obligations, deadlines for compliance, details of regulatory bodies, who within your organisation is responsible for ensuring obligations are met, and the process they will follow to ensure compliance. An example of a Compliance Register can be found in the Resources Section below.  

7.2.2 Members have organisation-wide requirements for the protection of privacy.

Verifier

A privacy policy that meets the requirements of privacy legislation and which is available on the organisation’s website.

Guidance

A privacy policy should relate to the full range of a Member's stakeholders - its supporters, workers, volunteers and the children and communities it works with. The Australian Privacy Principles and the Payment Card Industry Data Security Standard also apply to Members and should be addressed in a privacy policy. Members will find links to the privacy policies of other ACFID Members by looking at their websites.  

Good Practice Indicators

The following Good Practice Indicators describe a higher standard of practice than that set out in the Compliance Indicators. While Members do not need to meet the Good Practice Indicators to be considered compliant with the Code, they will self-assess against these indicators once every three years. This provides a clear pathway for Members to strengthen and improve practice over time.

  • A senior staff member with the responsibility of maintaining a register of legal and compliance obligations is appointed.
  • Periodic reports are provided to the organisation governing body on legal and compliance obligations.

GUIDANCE AND RESOURCES 

Good Practice Guidance

Here are some practical suggestions for your organisation to further deepen and improve practice over time. 

In Australia

  • All charities must be registered with the Australian Charities and Not-for-profits Commission – the ACNC
  • Your governing body and senior staff should be well informed of all the legal and regulatory obligations of your organisation in Australia and the countries you operate in. This information should be updated regularly to ensure it remains current.
  • Seek legal advice from a legal firm familiar with the legal and regulatory frameworks for not-for-profit organisations or, as a minimum, seek some guidance from your auditors
  • Seek guidance from the ACNC and other centres such as the Victorian Government’s Not-for-profit Compliance Support Centre or see Justice Connect.
  • Establish a documented register of all of your legal and regulatory obligations, deadlines for compliance, details of regulatory bodies, who within your organisation is responsible for ensuring obligations are met, and the process they will follow to ensure compliance
  • Prepare a written Annual Report for your governing body that reports your compliance with the requirements in your register of obligations
  • Undertake an annual review of all obligations to ensure that compliance is being maintained and to identify any changes in requirements  
  • Delegate responsibility (through the governing body and/or executive) to a senior staff member (or one of its own members) to do this, for example, to the Company Secretary, Finance Manager or Office Manager.
    • The delegated person should be accountable for providing this information to the governing body and ensuring the organisation remains compliant with its obligations.
    • Include this responsibility in their job description and through staff performance appraisals.
    • Your executive must ensure the delegated person has the necessary support throughout your organisation and its different operations to meet compliance obligations.
  • Larger and more complex signatory organisations will require more rigorous and comprehensive systems and processes to ensure compliance across a multiple number of staff, volunteers, activities and locations.
  • Where multiple staff are involved in compliance management, the following is recommended:
    • A written or electronic manual outlining all compliance requirements, the respective responsibilities of all operational areas of the organisation, the systems to ensure ongoing compliance and how up to date is the compliance information
    • A process for a regular (i.e. annual) internal audit of compliance obligations
    • Regular staff training to ensure they are fully aware of their individual and organisational responsibilities.
  • Where your organisation is involved in research, refer to the ACFID Guidelines and Principles for Ethical Research and Evaluation in Development.

In other countries

  • The governing body and senior staff should be well informed of all legal and regulatory obligations of your organisation in each of the countries you operate in. The information should be updated regularly to ensure it remains current.
  • Consult with your partners to understand all local legal and regulatory obligations which may impact operations and programming
  • Undertake due diligence on all partner organisations to ensure they operate in compliance with the legal requirements of that country
  • Seek legal advice from a legal firm familiar with the legal and regulatory frameworks for foreign and local NGOs or, as a minimum, seek some guidance from your auditors
  • Include in Partnership Agreements the obligation for partners to keep up to date with local legal and regulatory requirements, to share this information with your organisation and to maintain their compliance
  • Develop a documented register of all legal requirements in-country, updated annually and shared between the in-country partner and your Australian based organisation.
  • Support any training required for partners to strengthen their capacity to meet any required obligations (e.g. such as relating to employment or child protection)
  • These obligations may differ depending on whether your organisation has its own office and staff or is supporting the work of local partner organisations. In some countries, such as Ethiopia, there are complex and strictly applied regulations for foreign NGOs which have serious implications for partners if compliance is not met. Many countries, at the very least, require formal registration of foreign NGOs.
  • If you employ local staff in other countries, ensure all employee obligations are met, for example, taxation, health insurance and pension contributions and if there is a need to terminate the employment of a local staff member, local legal processes are followed.

Resources

Commitment 7.3 We are accountable to our stakeholders.

Compliance Indicators

Compliance with the Commitments will be assessed against the following Compliance Indicators. All of the applicable Compliance Indicators must be met by every ACFID Member to be considered compliant with the Code. Each of the Compliance Indicators has one or more compliance Verifiers. Verifiers are the description of evidence that is required to substantiate compliance with each Compliance Indicator. Guidance is also provided.

7.3.1 Members demonstrate an organisational commitment to operating transparently with all stakeholders.

Verifier

Policy, statement or guidance document (separate, or as part of other guidance such as for communications), that addresses expectations for transparency including what information is made public and when.

Members are required to extend this compliance indicator and verifiers to partners through MOUs or similar.        

Guidance

A transparency policy should outline your organisation’s committing to disclosing timely, relevant and accurate information in an accessible format, with any exceptions clearly and reasonably explained (such as data protection issues). It should outline what information your organisation is committed and prepared to share with the public and how it will respond to requests for information. This is also sometimes referred to as an open information policy.

Information that your organisation is committed to sharing might include, for example, your organisation’s legal status, purpose and governance structure; descriptions of significant program; policy papers, reports and press releases; formal agreements with other organisations; strategic documents; budgets; financial records; research and reports, organizational policies; and records of the environmental impact of activities. An example of a transparency policy can be found in the Resources Section below.

The policy, statement or guidance document that clearly separates aid and development and non-aid and development activity needs to refer explicitly to both religious adherence promotion and political activity. ACFID has a policy template to assist signatory organisations to develop policy that addresses the separation of development activities from non-development activities, which can be found in the Resources Section below.

7.3.2 Member development initiatives consistently demonstrate the separation of development and non-development activities

Members are required to extend this compliance indicator and verifiers to partners through MOUs or similar

Verifier

Policy, statement or guidance document that addresses the separation of development activities from non-development activities in:

  • Programming.
  • Expenditure reporting.
  • Fundraising.
  • Advocacy campaigns.
  • Communications.
  • Choice for donors.
  • Partners.

Development initiatives that consistently show evidence of the separation of development and non-development activities

Guidance

The policy, statement or guidance document that clearly separates aid and development and non-aid and development activity needs to refer explicitly to both religious adherence promotion and political activity. ACFID has a policy template to assist signatory organisations to develop policy that addresses the separation of development activities from non-development activities, which can be found in the Resources Section below.

7.3.3 Members enable stakeholders to make complaints to the organisation in a safe and confidential manner.

Members are required to extend this compliance indicator and verifiers to partners through MOUs or similar.         

Verifier

A documented, complaints handling policy that:

  • is readily accessible on the organisation’s website
  • provides a safe and discrete point of contact for stakeholders in Australia and countries where work is conducted, to raise concerns or complaints about the organisation
  • is responsive and fair
  • provides information to all stakeholders, including to Members of the communities where activities are implemented, about the reporting and complaints procedure.
  • provides information in a clear and easily understandable manner in appropriate forms and through appropriate media.
  • ensures that requirements for filing a complaint take into consideration the needs of the most vulnerable and considers minority and disadvantaged stakeholders.
  • advises a complainant of the ability to make a complaint regarding an alleged breach of the Code to the ACFID Code of Conduct Committee.
  • provides information on how staff and volunteers are equipped to understand and implement the policy.
  • includes a process for reviewing and analysing complaint information within the organisation.
  • outlines a triage system for escalating serious incidents
  • outlines a referral process for complaints that do not fall within the scope of the policy. (e.g. Complaints that do not fall within the scope of the policy would include, for example, complaints against an employee of another organisation or government department.)
  • commits to providing appropriate assistance and referrals to survivors (e.g. providing assistance to complainants might include medical, social, legal and financial assistance, or referrals to such services.)

A documented investigation procedure, which stipulates that an organisational record must be kept of all misconduct complaints, noting the ability to de-identify complaints at the request of the complainant or survivor.

Guidance

Having a complaints policy that is clear and readily accessible by all stakeholders is critical to fostering and ensuring accountability. It is a vital part of an organisation’s safeguarding mechanisms.

A complaints policy provides internal guidance to staff on how a complaint must be handled. A triage or prioritisation system for escalating serious complaints ensures that complaints are classified and prioritised according to their seriousness and appropriately handled within the organisation. Providing a clear reporting classification and reporting system ensures complaints are handled by the right people in the organisation, and follow appropriate response protocols. For example, a complaint from a regular supporter about the volume of marketing material they receive would be classified and handled differently to a complaint about the behaviour of staff, such as an act of fraud or sexual exploitation or abuse. The complaints policy should outline what processes should be followed for different types and degrees of complaints – for example, sexual misconduct, financial misconduct, child safeguarding incidents, HR misconduct incidents, and supporter concerns.  The policy should also provide guidance to staff on how to manage complaints that do not fall within the scope of the member’s policy – usually by referral to the entity that is the subject of the complaint.

A policy also provides an important statement of the organisation’s commitment to welcoming and responding to complaints and being accountable to stakeholders. It is used to communicate this commitment to both internal and external stakeholders.  This includes a commitment to providing appropriate assistance and referrals to survivors of sexual exploitation or abuse such as by mapping out key stakeholders and service providers for referrals, and by seeking to provide financial support to the extent practicable.

Members can find links to the complaints policies of other Members by looking at their websites.

7.3.4 Members make information about their organisation and its work available to all stakeholders.

Verifier

Members will provide the following information on their website:

  • Information on its governance: structure, responsible persons and organisational contact information.
  • ABN.
  • Information on their work, including key projects or programs.
  • Information on partners and their roles.
  • A statement of commitment to adherence to the Code.
  • The scope for and mechanism/process for lodging a complaint against the organisation, and a point of contact.
  • Identification of the ability to lodge a complaint alleging a breach of the Code with the ACFID Code of Conduct Committee, and a point of contact.
  • An Annual Report including the ACFID-Code-compliant financial statement in line with ACFID requirements (as outlined in Compliance Indicators 8.3.1 and 8.3.2).
  • Staff Code of Conduct (or equivalent)
  • Key policies relevant to the public including but not limited to, privacy, complaints, transparency, non-development activity, child protection, prevention of sexual exploitation and abuse, and conflict of interest.

Primary Stakeholder communication:

  • Information is provided to primary stakeholders on the expected behaviour of the organisation’s staff and volunteers, and access to its local complaints mechanism.

Guidance

Making the information listed above available on your website, ensures it is accessible to a range of stakeholders and makes a public statement about the organisation’s commitment to the policy areas covered such as child protection, PSEA and welcoming complaints. In general, information must be easily accessed, accurate and up to date. It may need to be tailored to increase its accessibility to different stakeholders, such as primary stakeholders (to whom development activities seek to directly benefit), partners, government, regulatory bodies, local leaders and officials, donors, supporters, volunteers, staff, governing body members, and peer organisations. Including the organisations staff code of conduct, enables all stakeholders to familiarise themselves with the behaviours they can expect of staff and makes a public statement about the expectations of the organisation of its staff. Communicating this same information to primary stakeholders also makes a public commitment by the organisation and enables primary stakeholders to understand what is acceptable and unacceptable behaviour. This is a critical component in accountability and the prevention of sexual exploitation and abuse. It is equally important that the organisation ensures that primary stakeholders understand the information provided to them.

7.3.5. Members seek input and feedback from all stakeholders

Verifier

Policy, statement or guidance document committing the Member to the dissemination of information to all stakeholders and to seeking their inputs and feedback.

Guidance

The policy, statement or guidance document may be a stand alone document or it might be addressed in other policy and guidance documents, such as in the organization’s policy on transparency (refer to 7.3.1) and its policy on complaints handling (refer to 7.3.3). However, it is important to note that this Compliance Indicator recognises the value of all types of input and feedback from stakeholders, not only complaints.  The important aspects that need to be addressed is the organisation’s commitment to sharing timely, relevant and accurate information in an accessible format; a commitment to providing stakeholders with an opportunity to provide input and feedback which includes compliments, suggestions and complaints; and a commitment to responding to feedback effectively and appropriately.

Good Practice Indicators

The following Good Practice Indicators describe a higher standard of practice than that set out in the Compliance Indicators. While Members do not need to meet the Good Practice Indicators to be considered compliant with the Code, they will self-assess against these indicators once every three years. This provides a clear pathway for Members to strengthen and improve practice over time.

  • Materials outlining organisation vision, mission and values, are available to partners and primary stakeholders in accessible forms. 
  • Complaints mechanisms are adapted to local contexts and provided in accessible formats and languages.
  • Consultation with primary stakeholders is undertaken to ensure their perspectives inform the design of community-based complaints mechanisms, particularly in relation to sexual exploitation, abuse and harassment.   

GUIDANCE AND RESOURCES 

Good Practice Guidance

Here are some practical suggestions for your organisation to further deepen and improve practice over time. 

Transparency

  • Publish a clearly defined mission statement
  • Publish information on your governance: structure, decision-making processes, governing body members and contact information
  • Comply with all relevant governance, financial accounting and reporting requirements
  • Publish an annual financial report that conforms with relevant laws and practices and is audited by a qualified independent auditor whose statement accompanies the report
  • Publish an annual report that also describes your NGO’s mission and values, objectives and outcomes achieved in programmes and advocacy work, environmental impact, governance structure, processes and main office bearers, main sources of funding, financial performance, and contact details
  • Maintain an updated website
  • Regularly update donors and supporters through a wide range of communication channels, such as through newsletters and your website and social media channels
  • Information should include organisational activity, including actual performance in relation to previously agreed goals, financial reports showing actual expenditure compared to budget, and any significant changes to programme goals or activities, the budget or key contacts.
  • Publish relevant information in the country of operations. This could include:
    • Background information on your organisation or partners, including the mission and values, country of origin, website, and legal status in country of operations
    • Details of the specific programme, including name, duration, location, goals, activities, target criteria and budget (while ensuring that the safety or wellbeing of any person or child is not compromised in doing so)
    • Contact information, including country office address, name and contact details of the programme manager and other relevant individuals
    • Regular reports of actual performance in relation to previously agreed goals
    • Regular financial reports showing actual expenditure compared to target
    • Any significant changes to programme goals or activities, the targets or key contacts
    • Dates and locations of key events such as meetings and consultations
    • Specific contact details for making comments or suggestions on the program activities or to request additional information
    • Information on how to make complaints about activities, including a named member of staff to contact and contact details
    • Tailor information for it to be readily accessible to the different stakeholders. 

Separation of non-development activity

  • Develop and document your organisation’s vision, purpose and values. For signatory organisations that engage in non-development activities, this can be used as the basis for discussion with partners and other stakeholders to develop shared understanding.
  • Signatory organisations that are accredited with the Australian Government ANCP program or have ‘approved organisation status’ under the Overseas Aid Gift Deductibility Scheme (OAGDS) funds raised under this scheme must not used for any purpose other than aid and development activity.  Signatory organisations should be aware that DFAT’s official definition of non-development activity includes welfare activities – refer to the Australian NGO Accreditation Guidance Manual.
  • For governing body members, volunteers or staff who are affiliated with a particular religion or political party in their private or professional lives, it can be challenging to separate this from their engagement in aid and development activities. In this situation you could implement the following:
    • Undertake orientation and training for all new board members, staff and volunteers to distinguish between development and non-developmental activities
    • Develop and disseminate clear guidance for any representatives engaging in field-based activities, such as monitoring or partner engagement, to ensure the distinction between the development and non-development activities is monitored and remains clear in activities, communication and practices
    • Ensure compliance with the separation by taking action where required to address inconsistent behaviour.
    • Help staff and volunteers understand that separating development and non-development activity doesn’t devalue their personal beliefs or affiliations, but can affirm and clarify the motivations that drive their involvement in development and justice.
  • Share your vision, purpose and values, and share and discuss your policy and guidelines on the separation or exclusion of non-development activity with partners and other key stakeholders to facilitate shared understanding
  • If necessary assist partners in training to help their staff and volunteers understand the reasons that separating development and non-development activities is critical for development effectiveness and assist your partner to develop their own policy on the separation or exclusion of non-development activity
  • Include explicit reference to the separation of non-development activities, including clear definitions, in partner agreements (or the equivalent) in order to ensure shared understanding and that such policy extends to partner and implementing organisations. This is a mandatory compliance requirement.
  • Monitor compliance of the clear separation or exclusion of non-aid and development activity through explicit reference in monitoring report templates and progress report templates
  • Where signatory organisation engage in non-development activities:
    • Ensure these dual activities are managed separately and can exists separately in a way that acknowledges the distinction between them
    • Do not incorporate such activities into programs designed to address poverty as this may exploit vulnerabilities[1]
    • Develop reporting tools that assist partners to report on and acquit non-development activities separately to development activities.
  • For signatory organisations that engage in non-development activities allow donors in online or printed fundraising materials to choose for their donation to be used for aid and development activities only or for non-development activities. Donors should be made aware that donations to non-development activities are not tax deductible. This is a mandatory compliance requirement.

[1] Proselytisation and Poverty, Church Agencies Network Statement, February 2014

Accountability to Primary Stakeholders and Complaints Mechanisms

It is vital to ensure accountability to primary stakeholders and that complaints mechanisms are informed by the perspectives of primary stakeholders and readily accessible and responsive to them. This is equally important whether your organisation works directly with primary stakeholders or whether you support the work of your local implementing partners to work directly with primary stakeholders.

If you support the work of your local implementing partners to work directly with primary stakeholders, ensure that they have established information sharing mechanisms, feedback mechanisms, and complaints mechanisms which are readily accessible for primary stakeholders. This may require your organization to provide resources and training to your partner, or link with other organisations who have well established accountability approaches. Whether your organisation is directly implementing or you are supporting local partners, the following practices are important in ensuring accountability to primary stakeholders and strengthening community based complaints mechanisms:

  • Share information as outlined above with primary stakeholders through community meetings or house to house visits to ensure that vulnerable or marginalised people who may not attend community meeting also have access. This could include information about your organisations vision, mission and values, the projects being implemented included budgets, the staff Code of Conduct and information on the expected behaviours of staff and any visitors to their community – including what would constitute unacceptable behaviour.
  • Develop a shared code of conduct in consultation with the community to really embed a shared ownership of acceptable and unacceptable behaviours of visitors and community members alike.
  • Consult with local staff and primary stakeholders to seek their perspectives and opinions on safeguarding or SEA risks which they may face. This involves more than just providing information – to develop a community based complaints mechanism is it important to seek the perspectives of primary stakeholders before designing your complaints mechanisms to ensure that the mechanisms are directly informed and shaped by the perspectives of primary stakeholders. 
  • Seek out people who may not provide their opinions at community meetings or similar forums i.e. those who are marginalised or voiceless eg people with disability, the elderly, children, LGBTI. This may require household visits.
  • Ensure that consultations or feedback mechanisms ‘do no harm’ and protect the privacy, safety and security of those involved. For example, it may be necessary to speak to men and women in separate groups.
  • Consult with other agencies including NGOs, UN agencies, government entities to seek their local experience
  • Research the availability of local support or assistance services for the referral of complaints which fall outside of the responsibility or expertise of your organisation. Ensure this information is made available to your local implementing partners and primary stakeholders.
  • Undertake thorough stakeholder, gender and power analysis within communities so you have a good understanding of the risks and context
  • In designing your community based complaints mechanism, consider existing mechanisms within the community – these may or may not be useful depending on existing structures and power dynamics eg women may not feel comfortable reporting an incident to the male community leaders.
  • Ensure a range of accessible options for people to make complaints. These could include email, phone, text and the location of suggestions or complaints boxes placed around the community. These must be locked and only opened by an identified person from your partner or your own organisation.
  • Appoint male and female focal persons for primary stakeholders to communicate with.
  • Once you have designed your complaints mechanisms, reporting and incident management procedures, share this information widely with staff and primary stakeholders. Conduct a range of information sharing forums for staff and primary stakeholders to ensure they are confident and understand that it is confidential, victim/survivor focused, non-retaliatory and fair.
  • Translate this information into national and local languages and place this information in public places around communities. Ensure you consider literacy levels and use graphic symbols as well as text.
  • Refer to the Best Practice Guide Inter-Agency Community Based Complaint Mechanisms Protection against Sexual exploitation and Abuse, in the Resources Section below for more guidance.

Resources

Commitment 7.4 We have responsible and independent governance mechanisms.

Compliance Indicators

Compliance with the Commitments will be assessed against the following Compliance Indicators. All of the applicable Compliance Indicators must be met by every ACFID Member to be considered compliant with the Code. Each of the Compliance Indicators has one or more compliance Verifiers. Verifiers are the description of evidence that is required to substantiate compliance with each Compliance Indicator. Guidance is also provided. 

7.4.1 Members have a governing body.

Verifier

A governing instrument, charter or policy that meets ACNC governance standards and also sets out:

  • The processes for selection, appointment and induction of responsible persons and any provisions for termination.
  • Clear term limits and number of consecutive terms a responsible person may serve.
  • A requirement for the majority of the responsible persons to be non- executive.
  • The approach to remuneration and expense reimbursement of responsible persons.

Guidance

The link to the ACNC Governance Standards can be found in the Resources Section below.  

7.4.2 Members establish their membership and define how the organisation is governed and operates.

Verifier

A governing Instrument that sets out:

  • The organisation's basic goals and purposes.
  • The not-for-profit nature of the organisation.
  • Membership of the organisation and Members’ rights and obligations.
  • Governance structure and processes of the organisation.
  • Frequency and processes for meetings of Members (at least annually).
  • Rules for meetings of the governing body, including the frequency of meetings (at least two a year) and quorum for meetings.
  • Powers and responsibilities of responsible persons including a statement of the overall responsibility of the governing body.
  • Strategic controls to be exercised by the governing body.
  • Financial controls to be exercised by the governing body.
  • Power of the governing body to delegate authority to officers, staff and others.                 

Guidance

The ACNC also provides a template constitution for a small company limited by guarantee with charitable purposes which can be found in the . Resources Section below. 

7.4.3 Members manage conflicts of interest with responsible persons, staff and volunteers relating to all activities undertaken by the organisation.

Verifier

A conflict of interest policy that addresses:

  • A definition of ‘conflict of interest’.
  • A requirement by responsible persons, volunteers and staff to disclose perceived, potential and actual conflicts of interest.
  • A procedure for addressing and recording perceived, potential and actual conflicts of interest, including those that have already occurred.
  • Procedures to enable open and fair procurement of goods and services (or reference made to a relevant policy).

Guidance

ACFID has uploaded a number of useful guidance documents in the resources section below, that outline what could be included in your conflict of interest policy and how to apply it in your organisation. Of particular merit is the ACNC ‘Managing Conflicts of Interest Guide” and the Practical Introduction produced by the CCIC (these are the top two links). Members will also find links to the conflict of interest policies of other members by looking at their websites. Members will also find links to the conflict of interest policies of other members by looking at their websites. 

7.4.4 Members governing body is informed of and responds to serious incidents in accordance with their mandate and responsibilities.

Verifier

Documented protocols for the reporting of serious incidents to the governing body. Safeguarding should form a standing agenda item for governing body meetings.

Guidance

Requiring the governing body to systematically and regularly consider safeguarding, elevates the importance of safeguarding within an organisation ensuring the governing body is providing leadership on safeguarding and PSEA. This requirement should be documented within the mandate or list of responsibilities of the governing body and in documented reporting protocols to ensure it is institutionalised. The governing body as the leadership of the organisation, should be accountable for serious incidents. Involving the governing body will assist in fostering a leadership and culture in the organisation that promotes safeguarding.

Good Practice Indicators

The following Good Practice Indicators describe a higher standard of practice than that set out in the Compliance Indicators. While Members do not need to meet the Good Practice Indicators to be considered compliant with the Code, they will self-assess against these indicators once every three years. This provides a clear pathway for Members to strengthen and improve practice over time.

  • The governing body Chair does not also occupy the position of Chief Executive Officer or equivalent.
  • Periodic reviews of the effectiveness of organisation governing body are undertaken.
  • Members seek out gender and safeguarding expertise as desirable skills and experience when recruiting new persons to the governing body.

GUIDANCE AND RESOURCES 

Good Practice Guidance

Here are some practical suggestions for your organisation to further deepen and improve practice over time. 

Type of governing instrument

  • Ensure that your organisation understands the concept of a governance or governing instrument, which is formal written documentation on your goals and purpose and how you operate.
  • Examples of a governing instrument include constitutions, articles of association, rules, trust deeds and charters. The will vary according to the organisation. For example:
    • An incorporated association is governed by rules, statements of purpose and rules or articles of association
    • A company limited by guarantee under the Corporations Act 2001 is governed by a constitution, which was previously known as a memorandum or articles of association
    • A trust is governed by a trust deed
    • Unincorporated associations are usually governed by ‘rules’
  • The governing instrument should be signed and dated by the appropriate authorities, whether directors, members or the equivalent
  • Whichever document governs your organisation, ensure someone with legal expertise checks it over to ensure compliance with any regulatory requirements.

Content of the governing instrument

  • If you wish to comply with the Australian government’s Overseas Aid Gift Deductibility Scheme (OAGDS) as well as DFAT NGO accreditation requirements, you must demonstrate your not-for-profit and voluntary status through your governing instrument.
  • According to the OAGDS eligibility guidelines, to establish the not-for-profit and voluntary status of your organisation, your governing instrument should state that:
    • Members of the governing body are not remunerated for their role on the governing body (i.e. they act in a voluntary capacity) NB: some governing body members may also be paid staff members
    • Profits or surplus will be applied to the objectives of the organisation and not distributed among the governing body or members (i.e. they will not profit from the revenue or gains of the organisation)
    • If the organisation is wound up, any remaining assets will be distributed to a similarly structured organisation. 
  • The ACNC website has good templates which may be useful for you to develop a governing document, or to compare with your existing one.
  • The governing instrument should be made available to your members, your constituency, supporters and the general public through your website 

Governing body responsibilities

  • It may be difficult to change your governing instrument to include the Code’s requirements regarding documented protocols for the reporting of serious incidents to the governing body and that safeguarding should form a standing agenda item for governing body meetings. Alternatively this could be documented in a Board Charter or governing body roles and responsibilities document and also within your PSEA policy.
  • However you choose to document this requirement, it should include a definition for serious incident and how this information will be reported to the governing body.
  • Provide governing body members with training on PSEA, child protection and complaints processes to ensure they fully understanding their responsibilities and accountabilities.  This should include training on legal, regulatory and contractual obligations in this regard including any mandatory reporting to external entities such as the police and the ACNC and to DFAT if your organisation receives DFAT funding.
  • To assist with governing body meetings, develop a template agenda with all standing items listed i.e. those that are on the agenda at every governing body meeting such as conflicts of interest and PSEA. This ensures they are not forgotten. It will also serve to increase governing body members awareness and prioritisation of these issues.

Conflict of interest

A conflict of interest arises when a person participating in decision-making, gains or is perceived as gaining an advantage (or avoiding a disadvantage) for themselves or for another organisation or person in which they have an interest, due to access to privileged information or from the outcome of the decision. Here are some practical suggestions for your organisation to strengthen its management of real or perceived conflicts of interest:

  • Review your governing instrument and any legislation that applies to your organisation to understand your legal duty to prevent and manage conflicts of interest
  • If your organisation is a company limited by guarantee make sure you promote and develop your governing body's understanding of directors duties (including the duty to avoid conflicts and to act in the best interests of the company) under the Corporations Act 2001 and the common law
  • Include a clause in your governing instrument outlining the obligations of your governing body to prevent and manage conflicts of interest.
  • Document in more detail the procedural arrangements for managing conflicts of interest in a board charter or procedures document
  • Create and document a conflict of interest policy, approved by the governing body that is applicable to directors, staff and any volunteers with decision-making authority over your partners, activities or resources. The policy should outline the following:
    • Who is responsible for implementing the policy for staff, volunteers and governing body members
    • What is the process for reporting on, reviewing and updating the policy
    • What are the consequences (e.g. paying restitution, resigning) for those who fail to comply with the policy
  • Create and document procedures for implementing the policy and ensure that governing body members and staff are well familiar with them. The procedures should outline the following:
    • Your organisation’s definition of conflict of interest
    • The requirement by directors to disclose potential and actual conflicts of interest, such as directors sitting on the governing bodies of other NGOs or funding bodies, or being employed by specialist firms that provide goods or services to your organisation.
    • Inclusion of conflict of interest as a standing agenda item on all governing body meetings
    • Where an actual or potential conflict of interest exists, the director or staff person may remove themselves from the discussion and decision-making process. The governing body or other committee determines whether this is required.
    • The procedure for addressing perceived, potential, actual conflicts of interest, including those that have already occurred
    • Procedures to ensure open and fair procurement of goods and services (or reference made to a separate relevant policy)
    • Governing body members and staff to disclose actual or potential conflicts of interest, and following this, your organisation to create a documented register of them
  • Document responses to the conflict of interest agenda item in the meeting minutes to ensure rigour and provide evidence that it was systematically considered in cases of perceived or actual conflict of interest. Records should include attendance and voting on agenda items.
  • If your organisation makes loans to members of the governing body, a documented policy must clearly describe how the loans operate. All loans or transactions with members of the governing body are to be included in your full financial reports and be publicly disclosed.
  • Provide training for all your directors and staff to ensure their understanding of conflict of interest situations, for example, how to avoid being placed in a situation of perceived obligation or indebtedness, and dealing with gifts and hospitality
  • Establish procedures to ensure fair and open procurement practices

Resources