Director term of appointment
The term of appointment is how long a person is appointed to be a director.
When their term expires the director must stop
A person cannot continue to act as a director once their term has expired. They are not a director.
Any decisions made by a person after their term as a director has expired are not legally effective. For example, a vote by that person at a directors’ meeting would not be counted.
Make sure directors cease their role when their term ends to avoid the risk of your corporation’s decisions being invalid.
Learn more about invalid decisions by ceased directors in our policy statement
The maximum term
The CATSI Act sets the maximum term at 2 years. This is set law but a corporation may ask for a longer term by applying to the Registrar for an exemption from the maximum term.
The CATSI Act allows a director to be reappointed after their term expires. This is a replaceable rule, so check your corporation’s rule book to see whether your directors can be reappointed.
Example rules for director terms
Directors (other than those appointed as independent or specialist non-member directors) are appointed for [one year / two years]. Their term ends at the end of the [first / second] AGM after they take office.
Independent or specialist non-member directors are appointed for the term specified by the directors in their appointment. They can be appointed for a term of no more than one year.
The term of an appointment made to fill a casual vacancy is for the balance of the term remaining on the vacant position. However, a person’s appointment to fill a casual vacancy must be confirmed by members passing a resolution at the next general meeting otherwise the person stops being a director at the end of that general meeting.
Notify ORIC when a director’s appointment ends
A corporation has up to 28 days to notify the Registrar when a director ceases their appointment (or a person is appointed, or a person is re-appointed).
Failure to notify us when your directors change is an offence of 10 penalty units. Based on the current value of a penalty unit, 10 penalty units means your corporation could face a fine of up to $3,130.
Find out when your director terms expire
Find the term of appointment for a director by checking:
- the rules for director term of appointment in your corporation’s rule book, and
- the wording of the resolution appointing the director.
You can also check your corporation’s extract on the Register of Aboriginal and Torres Strait Islander Corporations. The extract lists the most recent information lodged by your corporation. It lists for each director:
- the date they were appointed
- their appointment term in years BUT you also must check the rule book to know if the appointment ends when the time passes or if it’s at the AGM held for that year.
What if the terms of all directors have expired?
The CATSI Act says where the terms of all directors expire at the same time, and no replacement directors are appointed, the terms of the expired directors are automatically extended until the next general meeting. This automatic extension only applies for one extension.
Case study
In a 2016 case in the WA Supreme Court, the judge found that:
- all the directors' terms had expired but were extended to the next general meeting
- the general meeting didn't appoint new directors
- the corporation therefore had no directors.
Sandy v Yindjibarndi Aboriginal Corporation RNTBC [No 2] [2016] WASC 75