Board Charter & Delegations | ACNC & s.198D Compliant

A board charter is the internal document that describes how your governing body works. It records the board's purpose, its composition, the responsibilities it reserves to itself, the standing expectations of individual members, and the way meetings are called, quorums are met, and decisions are recorded. It sits underneath your constitution: the constitution is the legally binding rulebook filed with the regulator, while the charter is the practical operating manual that explains how the board discharges the duties the constitution assigns to it.

The delegations of authority schedule is the second half of the pack, and in practice it is the part people reach for weekly. It is a structured register that maps specific decisions to specific decision-makers, usually with financial thresholds attached. A committee treasurer might approve spending up to a set limit, the chief executive a higher band, and anything above that returns to the full board. It answers a deceptively simple question: can this person sign this, on their own, today? Getting that answer wrong is how charities end up with unauthorised contracts, invalid payments, and audit findings.

The two documents are drafted to work as a set. The charter establishes that the board may delegate; the schedule records exactly what has been delegated, to whom, and within what limits. A delegation that is never written into the minute book is legally fragile, which is why the pack ties both to your meeting records rather than leaving them as loose policy.

The framework depends on your legal structure, and choosing the right one is the first decision the pack helps you document. Incorporated associations are governed by the relevant state or territory Associations Incorporation Act, such as the Associations Incorporation Act 2009 (NSW), the Associations Incorporation Reform Act 2012 (Vic), or the Associations Incorporation Act 1981 (Qld). Companies limited by guarantee, the more common structure for larger charities operating nationally, sit under the Corporations Act 2001 (Cth). Both structures, once registered as charities, also answer to the Australian Charities and Not-for-profits Commission under the Charities Act 2013 (Cth) and the governance obligations in the Australian Charities and Not-for-profits Commission Regulation 2013 (Cth).

For companies limited by guarantee, the power to delegate is grounded in the Corporations Act 2001 (Cth) itself. Section 198D allows directors to delegate any of their powers to a committee of directors, an individual director, an employee, or any other person, unless the constitution says otherwise, and it requires that the delegation be recorded in the company's minute book. The catch sits in section 190: a director remains personally responsible for the delegate's exercise of that power unless the director believed on reasonable grounds that the delegate was reliable and competent. A delegations schedule is precisely the evidence that turns a vague hope into a reasonable belief, which is why the pack treats it as a risk-management tool, not administrative housekeeping.

The ACNC layer applies regardless of structure. The six Governance Standards require, among other things, that responsible persons understand and carry out their duties, that the charity acts lawfully and protects its assets, and that decision-making can be demonstrated to the regulator. A board charter that spells out those duties, paired with delegations that keep financial control visible, is one of the clearest ways to show compliance. The regulator publishes its expectations in the ACNC Governance Standards guidance for registered charities, which is the authoritative reference point when you draft or review these documents.

The most frequent trigger is a funding application that fails its due diligence check. A community group applies for a substantial grant, the funder asks for proof that the board approved its financial controls and that spending authority is properly limited, and suddenly a handshake culture has to become a paper trail overnight. A charter and delegations pack is exactly what closes that gap. The same pattern shows up when you approach a bank to change account signatories under a not-for-profit governance structure, because the bank wants written evidence of who holds authority before it updates its records.

Growth is the second driver. A charity that once ran on volunteer goodwill hires its first paid coordinator, and the board realises nobody has defined what that person can commit the organisation to without approval. Setting delegation bands early prevents the awkward conversation that follows an unauthorised purchase. Insurers create a similar pressure point: directors and officers cover is often priced more favourably when governance documentation is complete, and a professional indemnity renewal can stall while an underwriter waits for evidence of delegated authority limits.

There are two edge cases worth flagging. The first is the charity that operates across several states through branches or chapters, where the board needs to delegate operational authority to regional committees while keeping strategic and financial control central. The second is the organisation restructuring from an incorporated association into a company limited by guarantee, a change that alters the entire delegation framework because the underlying legislation shifts from a state Associations Incorporation Act to the Corporations Act 2001 (Cth). In both situations the charter is the document that keeps the transition orderly.

• The statement of the board's role and reserved powers draws the line between governance and management. It lists the matters the board will not delegate under any circumstances, typically strategy, the appointment and removal of the chief executive, approval of the annual budget, and any change to the constitution. This clause is what stops a delegation schedule from quietly hollowing out the board's authority.
• The delegations of authority schedule is the operational heart of the pack, structured as a register of decisions matched to decision-makers with clear financial thresholds. It sets the bands for expenditure approval, contract execution, banking, and staffing, so that everyone from a sub-committee chair to the chief executive knows the exact ceiling of their authority.
• The meeting and decision-making procedures codify how the board actually functions: notice periods, quorum, voting, use of circular resolutions, and the standard for minute-taking. Because a delegation only holds if it is properly recorded, this clause ties every delegated power back to a resolution captured in the AGM minutes and resolutions pack.
• The conflict of interest and abstention procedure requires responsible persons to declare material interests and step out of the relevant decision. This is a direct response to the ACNC duty to manage conflicts, and it protects both the individual and the charity when a related-party transaction arises.
• The sub-committee terms of reference allow the board to stand up finance, audit, or risk committees with defined mandates, so delegated groups operate within a written scope rather than drifting into decisions the full board should be making.

New South Wales associations operate under the Associations Incorporation Act 2009 (NSW), administered by NSW Fair Trading, which sets the baseline for committee duties and meeting procedure. Where a NSW association also employs staff, the delegations schedule needs to account for obligations under the Fair Work Act 2009 (Cth), and the charter should reference the volunteer agreement framework so that the boundary between delegated staff authority and unpaid volunteer roles stays clear.

Victoria runs under the Associations Incorporation Reform Act 2012 (Vic), regulated by Consumer Affairs Victoria, which prescribes model rules that many associations adopt. A board charter drafted for a Victorian association should explicitly state where it supplements those model rules and where the rules override the charter, because a charter clause that contradicts the registered rules has no effect. The registered rules always win over an internal charter, and treating the charter as a substitute for a proper constitution is a common and costly mistake.

Queensland associations fall under the Associations Incorporation Act 1981 (Qld), one of the older statutes in this area, which places particular weight on the management committee's collective responsibility. Delegation to individuals is possible but the committee retains ultimate accountability, so the Queensland version of the schedule keeps reporting lines back to the committee unusually tight.

For any charity structured as a company limited by guarantee, the state Associations Incorporation Acts fall away entirely and the Corporations Act 2001 (Cth) governs, particularly sections 198D and 190 on delegation and director responsibility. This is the structure most national charities adopt, and its delegation framework is drafted from the incorporated association and company constitution templates rather than the state model rules.

You begin by selecting your legal structure, because that single choice determines which legislation the pack cites and how the delegation clauses are framed. From there, the form asks you to confirm the board's reserved powers, the matters your governing body has agreed never to delegate, and it pre-populates the standard set that most Australian not-for-profits keep at board level. You then set your delegation bands, entering the financial thresholds for expenditure, contracts, and banking that suit the size of your organisation, so a small association and a multi-million-dollar charity end up with proportionate limits rather than a one-size template.

The next stage builds your meeting procedures, where you confirm notice periods, quorum numbers, and whether circular resolutions are permitted, all drawn to match your constitution or registered rules. The pack then generates the conflict of interest procedure and any sub-committee terms of reference you have chosen to include. Once complete, you download the charter and the delegations schedule in editable Word and clean PDF, ready to table at your next meeting for formal adoption. That adoption resolution is what gives the documents their authority, so the final prompt reminds you to record it in your minutes.

The most damaging mistake is treating the charter as a replacement for the constitution. The constitution is the legally binding document filed with the regulator, and a charter can only supplement it, never contradict it. Boards that draft an ambitious charter without checking it against their registered rules often create clauses that are simply void, and they discover this at the worst possible moment, usually mid-dispute. The second recurring error is delegating authority without recording it in the minute book, which for a company limited by guarantee breaches the recording requirement in section 198D and leaves directors exposed under section 190. A delegation that exists only in practice is not a delegation the regulator or a court will recognise.

The third mistake is setting financial thresholds and then never revisiting them, so a charity that has doubled in size still runs on delegation limits designed for a fraction of its current budget. This forces trivial decisions back to the board and slows the organisation to a crawl, or worse, encourages people to quietly work around limits everyone knows are outdated. Boards also frequently forget to build a conflict of interest step into their delegated decisions, which the ACNC treats as a core governance duty. Finally, many organisations write the charter, adopt it once, and file it, never linking it to their ACNC compliance and governance framework or reviewing it against updated standards. A governance document that is never reviewed drifts out of alignment with both the law and the organisation within a couple of years.