Understanding your governing document
The management committee/board must ensure that the organisation understands and complies with its own governing document, relevant laws, contractual obligations and the requirements of any regulatory bodies.
(Supporting principle to Principle 2 of The Code of Good Governance)
When an organisation chooses its legal structure, it takes on a particular set of rules that govern how the organisation will operate. This is called your "governing document" but may be more commonly referred to as your constitution.
Your governing document provides essential information about your organisation including its:
- Purpose (objects);
- Activities it can be involved in;
- Beneficiaries (who can benefit from your work);
- Geographic area you can work within;
- Powers of the management committee;
- Rules for running meetings;
- Voting procedures;
- Election of the management committee;
- Election of office-bearers;
- Financial requirements; and
- Winding down (closure).
Governing documents must be formally approved. This approval process generally requires the document to be:
- Adopted at a meeting e.g. Annual General Meeting (AGM);
- Signed by the Management Committee members (those in office when it is adopted); and
- Dated the day of the meeting at which it was agreed.
It is essential that minutes of the meeting be recorded to show that the document has been formally agreed.
The Management Committee is then responsible for ensuring that the governing document is put into practice.