Responsibilities of directors
Individual directors have responsibilities and obligations that help them contribute to the board's responsibilities and use the board's powers appropriately.
Responsibilities and obligations
Know the business of the corporation
Know the corporation’s history, its core functions, and relationships with other organisations and stakeholders.
Understand the operating environment
Know the corporation’s stakeholders and their level of influence on the corporation.
Be aware of community issues and interests.
Be aware of relevant industry trends and opportunities.
Monitor threats and opportunities.
Monitor operations
Ensure outcomes are documented for each operational area.
Review information about effectiveness and efficiency of operations.
This may come from reports to the board from staff, business partners, funding bodies or consultants, or feedback from stakeholders, customers or the community.
Monitor the financial position and performance, and whether the corporation can pay its debts on time
If the corporation cannot pay its debts, you must stop the corporation from trading and get advice.
Every year the board must pass a resolution that the corporation is solvent.
Ensure the corporation keeps records and registers
Directors are personally responsible for:
- ensuring corporation records are up to date, such as registers of members and former members, personal details of directors, minutes of meetings, and resolutions made outside meetings
- updating corporation information on the Register of Aboriginal and Torres Strait Islander Corporations
- ensuring the corporation keeps proper financial records that explain all corporation transactions and its financial position and performance.
Provide information about themselves
Directors must notify their corporation within 14 days of changing their personal details or circumstances. This might include:
- change of address or phone number
- getting a director identification number (director ID)
- becoming disqualified from managing corporations
- no longer meeting the corporation’s eligibility requirements to be a director.
Work within the corporation’s structure
Understand the relationship between the board and management.
Identify and document overlapping roles.
Understand the corporation’s operational structure and lines of accountability.
Understand the relationship between the board and any related entities, if your corporation has any.
Ensure complaints are handled effectively
Ensure the corporation has a process to handle complaints and feedback from internal and external stakeholders, for example:
- receiving and documenting complaints
- evaluating complaints
- if appropriate, gathering further information and responding
- documenting the outcome
- if relevant, implementing any outcome.
Follow legal requirements when carrying out board functions
Know what laws apply to the corporation.
Follow the requirements of the CATSI Act.
Follow the corporation’s rule book.
If the corporation employs people, know and follow workplace laws.
Know and adhere to requirements of funding agreements.
Follow the legal obligations of directors and other officers
Follow your fiduciary duty, your legal duties under the CATSI Act, and other obligations for directors. For example:
- apply for a director ID
- disclose all material personal interests you have.
Follow the corporation’s policies and procedures
Follow any codes of conduct, policies and processes, such as:
- the board’s decision-making processes
- confidentiality
- speaking publicly
- use of assets
- access to bank accounts
- record keeping requirements.
Make decisions on behalf of the corporation
Make decisions in good faith and for a proper purpose, that are in the best interests of the corporation, not your own or someone else’s interests.
Do not be involved in making decisions that you have a personal interest in.
Come to directors’ meetings prepared so that you can contribute effectively to the board decisions.
Read papers and do research, so that when the meeting begins, you are ready to debate key issues and options.
Know what matters are on the agenda for the meeting.
Find out how a decision will affect the corporation’s business performance. This is especially important if the decision involves corporation money or could affect the corporation’s reputation.
If you need professional advice, get it.
If you suspect the corporation cannot pay its debts on time, do not allow the corporation to carry out business as usual or make any decisions that could cause the corporation to incur further debt.