Good Governance Series #3
The PMSA & ACNC
Following the first ‘Good Governance’ blog, many have asked why the Australian Charities and Not-for-profit Commission’s (‘the ACNC’s’) Governance Standards were not referred to, and whether the PMSA’s registration with the ACNC and (questionable) compliance with the ACNC’s requirements meant that the PMSA had the ‘sound governance practices’ it claims.
ACNC Governance Standards - Background
The Australian Charities and Not-for-profit Commission Act 2012 (Cth) (‘the ACNC Act’) commenced on 3 December 2012 after extensive public and sector consultation (and with considerable advance notice). The ACNC Act regulates charities and not-for-profit organisations, including the PMSA and all but one (1) of its (known) related entities.
The Australian Charities and Not-for-profit Commission Regulation 2013 (Cth) (‘the ACNC Regs’) made under the ACNC Act established a set of ‘Governance Standards’ in subdivision 45-B with which charities and not-for-profits must comply. The Governance Standards commenced on 1 July 2013, again after extensive public and sector consultation (and with considerable advance notice).
Quite sensibly, allowances were made for affected organisations to transition to these new rules. Specifically, it stated at section 45.130:
“(1) If the governing rules of a registered entity, as in effect on the day this Regulation is registered, prevent the registered entity from complying with a requirement of Subdivision 45-B, the registered entity is exempt from the requirement until 1 July 2017.
(2) However, the registered entity must comply with the requirements of Subdivision 45-B as far as is possible, without breaching its governing rules.”
Now, I don’t know about you, but the last time I looked at my calendar it was March 2018. The last time the PMSA amended its Constitution and By-laws (the governing rules) was 1 September 2010. Goodness only knows what state supporting documents and practices are in.
So, while all the other charities and not-for-profits have been running around for the past 6 years reviewing their governance arrangements, including constitutions, charters, frameworks, policies, procedures, systems and processes, you have to ask: ‘Exactly what has the PMSA been doing?’
The Five Governance Standards
Be that as it may, if you have read the first ‘Good Governance’ blog, you will see that the Governance Standards are not good indicators of the existence of good governance. I have, therefore, only provided below the ACNC’s brief summary of them. For those interested, more detailed guidance is available on the ACNC website (apologies for sounding like the PMSA).
How the Governance Standards apply
This is the important bit. The regulatory framework:
“…establishes …. a set of minimum governance standards to apply to registered charities … Charities will need to comply with these standards to be, and remain, registered with the ACNC.
The governance standards are intended to reflect a minimum set of outcomes for registered charities, rather than mandate ‘best practice governance’ or detailed procedures and requirements necessary for effective not‑for‑profit (NFP) governance.”
Development of Governance Standards – Consultation Paper 2012, Section 2 of the Consultation Paper, Page 5 and following.
The Governance Standards are the bare minimum standards to be met. That is, in fact, how legislation and regulatory frameworks operate – they provide the bare minimum standards of behaviour to be met before the State will exercise its power and authority to intervene.
Compliance with legislation or a regulatory framework does not go anywhere near to ‘good practice’, let alone ‘best practice’, and it does not prohibit doing better than the standard in the legislation or regulatory framework.
Reporting to statutory authorities does not equal acting transparently and it does not equal being accountable to stakeholders. It does not equal providing sufficient or quality information to stakeholders, and it does not equal a prohibition on the PMSA doing so – that lays squarely in the choices made by the PMSA Council and the Churches.
Remember that every time the PMSA refuses to do something on the basis that it meets legislative requirements. Remember it too when the PMSA PR machine sprouts self-congratulatory communications about how fantastic it is because it meets legislative requirements.
The bare minimum is not a fantastic achievement. It is an embarrassment. It is a disgrace that the governing body of four of the most elite, expensive educational institutions in the country cannot, and does not want to, do better than the bare minimum for our children and other stakeholders.
