Law, rules and obligations

Having good policies and procedures in place can help a corporation operate smoothly and in line with the law and regulations.

Sources of rules and obligations 

Following and enforcing the rules from the law and agreements helps a corporation stay compliant while showing good governance practices. 

Corporations registered with ORIC are bound by the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (CATSI Act). 

There are also a lot of other laws that apply to corporations in Australia.

CATSI Act

The CATSI Act provides the legal framework for how Aboriginal and Torres Strait Islander corporations operate. 

Meeting your obligations under the CATSI Act keeps your corporation running smoothly. Not meeting obligations under the CATSI Act may be breaking the law. 

The Registrar is an independent statutory office holder appointed by the Minister for Indigenous Australians to administer the CATSI Act. 

Read more about the Registrar’s powers and position.

The corporation rule book 

The rule book is also known as the corporation’s constitution. It lays out the way the corporation is run and managed. 

Rules differ between corporations because they’re set up to suit the corporation’s unique circumstances.

Funding agreements

Corporations that receive funding must follow the funding agreement terms outlined in their agreement.

Each agreement will have specific conditions that must be met. These include:

• project timelines
• milestones
• deliverables
• reporting requirements.

Use the funds strictly for the purposes outlined in the funding agreement. Using funds for the wrong things can lead to legal penalties and lower chances of future funding.

Check your funding agreement carefully and meet the obligations listed. 

Contracts

A contract is when you agree to:

• do work for another person or organisation
• hire another person or engage and organisation to do work for you.

Contracts are binding agreements. Breaking the rules of a contract is bad business and can cause legal issues.

Learn more about contracts at business.gov.au.

Policies and procedures

Policies and procedures help with consistency in the corporation’s work. Having these in place promotes good governance and helps with compliance. 

A policy is a set of rules for the corporation to follow in order to achieve a specific goal, such as compliance with a law. Policies tell corporation officers and staff about what to do (such as directions, limits, principles, and decision-making guidance) and why. 

A procedure is the step-by-step instruction for how, when, and where a policy will be followed. A policy defines a rule, and the procedure defines who is expected to do it and how they are expected to do it.

Review and update your policies and procedures regularly so they stay relevant. Involving the board, members and staff in the review process can help make complete and useful policies.

Governance policies

A board governance policy outlines the roles and responsibilities of the board. It includes:

• procedures for board meetings
• decision-making processes
• conflict of interest management.

A code of conduct sets standards for ethical behaviour and responsibilities of directors, employees, and members. It addresses issues such as confidentiality, integrity, and accountability.

A conflict of interest policy defines what a conflict of interest is and how it should be managed. It includes procedures for declaring and addressing conflicts during meetings and decision-making.

Financial management policies

A financial management policy describes how financial records are maintained, monitored, and reported. It usually covers budgeting, financial reporting and internal controls to prevent fraud.

A procurement policy is the guide for purchasing goods and services. It ensures clear and fair procurement processes.

An audit and risk management policy sets up procedures for internal and external audits. It defines how to identify and assess risks and manage them in the corporation.

Operational policies

A human resources policy covers recruitment, hiring and employment practices. It includes:

• employee rights and responsibilities
• performance management
• disciplinary procedures.

A health and safety policy ensures a safe working environment for employees and members. It includes procedures for reporting and managing workplace incidents and hazards.

An information management policy defines how the corporation collects, stores and protects information. It includes data privacy and confidentiality procedures, especially about member and financial records.

A community engagement policy describes how the corporation interacts with the community it serves. It might have strategies for communication, consultation, and involving community members in decision-making.

Procedures to support policies

A meeting procedure details how to conduct board meetings, annual general meetings, and other member meetings. It notes:

• notice requirements
• quorum rules
• minute-taking practices.

A complaint-handling and dispute procedure outlines a process for addressing:

• complaints from outside and within the corporation
• disputes between members, staff or stakeholders.

It ensures issues are handled fairly, clearly, and quickly.

You might also have a training and development procedure outlining how directors, managers and staff get ongoing and quality training. It includes making sure everyone is informed about their roles and responsibilities and any changes in the law.

Two-way governance

Two-way governance is when Indigenous governance and corporate governance are combined to govern an Aboriginal and Torres Strait Islander corporation. 

Meeting all the Indigenous and corporate governance needs can:

• overload the corporation and its directors
• raise legal issues about their decision-making.

The CATSI helps with this by streamlining administration according to the corporation size.

• In small corporations with little funding and few liquid assets, informal arrangements can work well. They should not be overburdened by red tape.
• Medium to large corporations need to formalise their practices more if they are to survive and be successful.