Types of rules
There are different types of rules for a corporation’s internal governance. There are rules that:
- are set in the law and cannot be changed
- can be replaced
- can be changed
- are specific to the corporation.
All our model rule books have a combination of rule types
Section 57-5 of the CATSI Act provides a list of the main provisions of the CATSI Act that deal with the internal governance of Aboriginal and Torres Strait Islander corporations.
Related
Set laws
Provisions of the CATSI Act apply to all corporations. You have to follow them even if you don’t write them in your rule book.
What you can do with these rules: You cannot change these rules but there are some you can ask the Registrar to be exempt from.
You must apply for an exemption and if it’s granted then make sure your rule book reflects the change.
Examples
The CATSI Act sets the minimum and maximum numbers of directors (s. 243-1 and 243-5). An exemption from the maximum number of directors may be given to corporations that require more than 12 directors – for example when there are 16 families who are members of the corporation and the corporation wants a director to represent each family.
The CATSI Act has various rules about when corporations must hold meetings and when they must report. The rules about meetings are also exemptible for example if your main activities better align to a calendar year cycle rather than financial year. To ask the Registrar for an exemption, you need to explain why the rules in the Act are inappropriate or impose unreasonable burdens on your corporation, such as the expected cost of complying with the rules, or practical difficulties they present.
The rule about how a person stops being a director is set in the CATSI Act (s. 249-1). The Registrar has no power to exempt a corporation from this rule.
The CATSI Act says that a director must be appointed for a maximum term of 2 years (s. 246–25) but you might want longer period.
Replaceable rules
Provisions of the CATSI Act that a corporation can adopt as is or replace. Even if you don’t write a replaceable rule in your rule book, it is still part of your internal governance rules and you still have to follow it.
What you can do with these rules
You can adopt these rules exactly as they’re written in the CATSI Act or replace them with rules about the same topic. What suits your corporation might be a rule that’s a little bit different or very different. You can make it completely different to the CATSI Act as long as your rule is about the same topic. There’s no set format or wording – you get to decide.
When you ask your members to vote on adopting a proposed the rule book, the resolution needs to say the members agree to adopt the proposed rule book AND any replaceable rules that haven’t been written in the rule book.
Examples
The CATSI Act provides a way to work out the quorum for a general meeting – s. 201-70(1)–(2). You may want to replace the CATSI Act version to say quorum requires a representative from each family group to be present or a higher number of members to be present.
The rule about who may appoint a proxy at a general meeting is a replaceable rule. The CATSI Act version says that a member who is entitled to attend and cast a vote at a general meeting may appoint anyone else as their proxy to attend the general meeting and vote on their behalf (s. 201-90).
A lot of corporations replace this rule to limit who a member can appoint as their proxy. Rather than ‘any person’, they make it ‘another member of the corporation’.
Many corporations also make rule that stops a person appointed as a power of attorney for a member from using their power to appoint a proxy for the member.
Some corporations replace it with a rule that says no proxies are allowed.
Changeable rules
Provisions of the CATSI Act that a corporation can adopt as is or change. Some rules in the CATSI Act allow a corporation to change parts of it to better suit their needs. There are usually limits to what part and how much each rule can be changed.
What you can do with these rules
You can adopt these rules exactly as they’re written in the CATSI Act or change the parts that are changeable.
Examples
The CATSI Act says that a corporation must give at least 21 days’ notice of a general meeting (s. 201-20) but a corporation can extend that to a longer period.
The CATSI Act says the minimum age of members is 15 years old, but a corporation can change the age to make it higher (not lower).
The CATSI Act says that by default, a corporation cannot charge membership fees (s. 144-15). You can, however, add a rule to charge a membership fee, as long as the members have agreed on the price at a general meeting.
The CATSI Act says that an appointment of proxy document must be received at least 48 hours before the relevant meeting (s. 201-105) but a corporation can change this rule to reduce or extend the period of time.
Specific rules
The corporation’s specific rules – its constitution. The constitution contains everything that is customised or tailored to the corporation, that is:
- the corporation’s rules required by the CATSI Act (its name, objectives, membership eligibility and internal dispute resolution)
- any of the provisions that were replaced
- any of the provisions that were changed
- any other special rules the corporation added (other rules are only allowed if they are workable and consistent with the Act).
There are extra rule book requirements to consider if your corporation is a registered native title body corporate (RNTBC).
These rules are all based on the corporation's specific needs and processes. They might include extra rules to support good governance; rules that reflect traditional decision-making structures and processes; or rules that support the corporation’s purpose such as being a charity or an RNTBC.
Some corporations adjust their governance structure by having rules about sub-committees or advisory and elders’ groups. Other corporations adjust their rules to reflect make their culture, such as making sure family groups are equally represented.
Examples
Required rules: Every corporation must have rules for:
- its name
- its objectives
- who is eligible to be a member of the corporation. Getting this rule right is especially important for corporations that manage or hold native title. They must ensure that all the common law holders described in the native title determination can be represented.
- how internal disputes must be resolved.
Other rules that support good governance
- The CATSI Act doesn’t have a mechanism for postponing a general meeting after it’s been called. Many corporations add this rule: The corporation can postpone a general meeting after it has given notice for it, if certain circumstances arise – such as death of a community person, natural disaster… or a pandemic!
- If a corporation allows non-Indigenous people to become members, they must not accept a person’s application to become a member if it puts non-Indigenous people in the majority. To make things fair these corporations might want to add a rule to say: Membership applications are decided in the order they are received by the corporation.
Other rules might reflect your traditional culture or corporation’s key activities
- Ensuring you have the right mix of knowledge and skills in your board might be important to your corporation’s success. You might require your board composition to be an equal number of men and women as directors; a representative from each family, language, or community/town group; or for specialist skills to be covered.
- Your corporation might benefit from having a committee or advisory group to give advice to the board on certain matters, such as culture and heritage, or industry, before the board makes a decision.
Other rules needed if your corporation has a specific purpose or activity
- To meet the requirements for registration as a charity or to receive tax concessions certain rules need specific wording. For example, a charity’s rules must ensure the corporation is not-for-profit that is, it only uses its money to further its objectives, not to distribute profits to members.