TINZ has submitted on the Incorporated Societies Bill currently being considered by the Economic Development, Science and Innovation Committee. Good governance and integrity is as important in civil society organisations as it is in public and business sector – a point we made in our National Integrity System Update 2018 Recommendation 6.
The draft bill has many good features – it promises to promote high-quality governance and make the law of societies more accessible. TINZ supports the general requirement for increased transparency from Incorporated societies, and some of the checks and balances that this will require including record keeping, better rules and dispute resolution.
But in some areas the Bill jumps ahead of practicality. Legislative change that affects communities should take a ‘do no harm approach’. It should enable and support organised community activity and aspirations, not be a hindrance. TINZ absolutely supports improved governance behaviour, but we do not think the case has been made that the extensive and prescriptive requirements set down in the Bill will engender positive behaviour change.
Most of us will know of situations where lax adherence to rules or poor rules has hurt community organisations. Communities form organisations around activities and aspirations – to provide services, cultural activities, sporting opportunities and multiple other community benefits. People become members of organisations because they support what they do, or because they want to be involved doing the mahi. This focus can sometimes detract attention from administration, governance and accountability.
The promotion of good governance and the accessibility of the law are two of wider society’s highest and most valuable ideals. They can and should be adhered to and implemented. But this should be done in a way that is inclusive and empowering of those who can lack financial, governance and administrative skill, staff and background.
The legislative response needs to take a balanced and proportionate response, to what are private organisations. The Bill leans towards bureaucratic overkill in several areas. For example officers’ duties (clauses 53-55) are modelled on those in the Companies Act 1990, requiring officers to comprehend complex legal questions that are involved in assessing the solvency test. The granular prescription on conflict of interest focusses on family connections, fully missing the contextual variation of interests. The Bill also appears to take an historical view of ‘contact details’ and ‘registered addresses’. These days many community organisations are fully digital, making physical or even postal addresses of offices, officers, and members irrelevant. We agree with the requirement for required elements to be included in constitutions, but not to the level of detail specified in the Bill.
The somewhat dated Regulatory Impact Statement advised that the potential impacts or benefits of the Bill could only be subjectively commented on because of a lack of information. That seems a poor basis on which to apply the level of prescription in the Bill. We hope that the outcome of consultation and Select Committee consideration will see improved legislation that can last another 110 years.
Here is the TINZ Incorporated Societies Bill Submission.