Accountability for making decisions

Different people (or groups of people) can make decisions on behalf of the corporation.  

The corporation’s members make decisions about important matters for the corporation. Directors look after and make decisions about corporation operations.

Directors can delegate powers to staff so they make decisions too.

Members’ decision-making

Very important matters should be decided by the corporation’s owners – the members.

Resolutions passed by members are called members’ resolutions.  

Depending on the decision that has to be made, they might be:

• ordinary resolutions  
• special resolutions.

Members’ resolutions are usually made at meetings, but you can seek members’ approval outside of meetings.

Decisions about big issues or change  

When a corporation needs to decide on a big issue or change, the members must pass a special resolution.

Special resolutions require a stronger agreement (more votes in favour) to pass than ordinary resolutions. They need 75% of the total votes in favour of the resolution.

You need to pass a special resolution for certain decisions in the CATSI Act or your rule book, including to:

• register a new corporation or amalgamate with another corporation
• change a corporation’s name
• amend a corporation’s rule book
• cancel a member’s membership (for certain reasons only)
• transfer the corporation’s registration to another law
• wind up a corporation, and decide how to distribute assets in a winding-up.

Decisions about ordinary/regular corporation matters

Some matters are part of regular business. Members decide these by ordinary resolution.

A majority of votes is needed in favour of the resolution for it to pass (unless your rule book says otherwise).

Some decisions are made at least once a year. These decisions are part of the business (on the agenda) of every annual general meeting (AGM):

• Confirmation of the minutes of the previous AGM.
• Who will be the directors.
• Who will be the auditor of the corporation’s financial report (if you do one) and how much they’ll be paid.

Other matters for members to decide by ordinary resolution include:

• approval to give a financial benefit to a related party, such as a director
• the amount of remuneration to be paid to directors (only if the rule book says directors are paid)
• a resolution proposed by members (about something the members want to put to a vote).

For significant decisions, like purchasing a property, directors sometimes ask members to decide.

Directors' decision-making

Directors usually make decisions about the corporation’s:  

• strategic direction
• activities
• business ventures
• budgets
• employment of senior staff.

These decisions are made using a directors’ resolution.

A director can also delegate powers to staff.

They might do this so staff can make decisions on hiring junior staff or paying bills.