Although universities are registered as charities for business purposes, they have some very unusual characteristics when compared with many other not-for-profit types of organizations. As such, In-House Legal Counsel recruitment, Company Secretary recruitment and Executive Search firms such as Greenfields, which specialize in this area, need to ensure that candidates fully understand some of the key differences and potential challenges of working in this field.
The Australian Charities and Not-for-profits Commission or ACNC was created in 2012 to regulate Australian charities and not-for-profit organizations on a national level, including areas such as their governance arrangements and/or practices and fundraising activities. The ACNC carries out the indicators proscribed by the Charities Act 2013 (CTH).
The definition of ‘charity’ according to this legislation includes advancing education for the public benefit. Charities need to be registered with the Australian Charities and Not-for Profits Commission so that they may be entitled to tax exempt status (which includes an exemption from GST) as well as certain other exemptions and benefits, such as the ability to give tax deductible receipts, something highly important to donors.
In general, it is suggested that many Australian universities view the ACNC as simply adding another and perhaps redundant and unnecessary layer of regulation and bureaucratic red tape, and that, apart from updating the corporate details from time to time (as required), the submission of the financial report and Annual Information Statement (AIS) is the only obligation. A non-profit or charity organization's Secretary needs to be aware that such a view is an oversimplification of the requirements imposed by the ACNC, and it is incorrect, to boot. While it is true that institutions which adopt the highest standards of corporate governance (based on their own internally developed governance standards) will almost certainly comply with the basic and fundamental requirements of the ACNC guidelines, Company Secretaries still need to assess themselves against the guidelines issued by the ACNC as well.
If they require nothing else, the ACNC guidelines will provide the basis for a helpful self-assessment and good governance quality check, which is an added assurance that things are in order.
For those in the position of In-House Legal Counsel, the Governance for Good guide and Governance Toolkit is particularly helpful for determining when and if certain guidelines are being met. Charities must promptly notify the ACNC of any significant breaches of the ACNC Act or Governance Standards, and the Secretary and the In-house Legal Counsel are often the forefront of this compliance. This leads us to question how many universities are compliant.
A task for the Head Secretary of any university registered with the ACNC should be to review their own continual obligations under the ACNC Act, including how their existing governance arrangements compare with those currently advocated by the ACNC and its requirements. Interestingly enough, the ACNC emphasises that members of the charity board council have a duty to prevent the charity (of which they are a director or council member to operate while it is insolvent. This is often missing as a requirement in university acts.
This duty is in addition to ensuring that the financial affairs of the charity are managed responsibly. All In-House Legal employees should be aware that this is evident in the context of the current reliance (and risks) that many universities have on income received from full-fee-paying Chinese students. The conduct of operations outside Australia (covered by the ACNC External Conduct Standards) is also noteworthy, especially for universities with significant offshore campuses and arrangements with third party service providers. In-house Counsel must ensure the university is abiding by all regulations in this matter.
The tenets of the ACNC Governance Standards apply, which includes transparency and accountability from the university. The presence of these two tenets promote public trust and confidence in their giving.
In-House Legal Counsel recruitment and Company Secretary recruitment can be challenging in this sector, yet very rewarding, considering the blend of commercial imperatives and social purpose, combined with political overlays.
Arbitration And Mediation Counsel India - Anirban Ray is an Empanelled Arbitrator in Bombay High Court and holds extensive experience in managing all contractual matters of construction tenders including tendering, contract awarding, construction supervision, mediation services and dispute resolution.
