Incorporated Societies Act under review 25 June 2011
We are continually reminded of governance obligations for directors and trustees. And it’s easy to understand why these principles are so important for publicly listed companies or indeed any organisation which is responsible for administering significant assets and income. But it can be so much harder for people to understand and apply those obligations when we are talking about small community organisations, which are reliant on the goodwill of volunteers who are prepared to take on positions of responsibility for the greater good of the community.
The Law Commission has also addressed dispute resolution procedures for societies. Again, this is sensible. Poorly drafted constitutions and consequential wrangling between members often make their way to the High Court. Everyone knows this is a colossal waste of time, energy and money, but these disputes seem to arise time and time again. I agree with the Law Commission that societies should have some kind of dispute resolution mechanism that does not involve the High Court as the Court of first instance. It will be interesting to see which dispute resolution model is ultimately preferred.
Submissions on the Law Commission’s issues paper close on 30 September 2011.