Sporting clubs and associations have certain legal obligations in relation to financial management. There are also corporate governance issues that need to be taken into consideration when administering a club’s finances. Whether you’re a club director, a board member or the financial director is it important you understand your responsibilities in this area.
Here is a summary of the key issues. For further information, it is recommended that you talk to your association or sporting body and/or obtain professional advice.
Directors of all sport and recreation organisations have common law duties. These require directors to act competently, honestly, in good faith and in what they consider to be the best interests of the organisation.
The broader principles of common law that directors should follow include:
Your club’s situation needs to be taken into consideration when applying these duties. This includes the type of organisation, the club’s size and nature, the composition of the board and the distribution of work between directors and other officers.
Directors and board or committee members are required to understand the needs of their sport or association in relation to statutory and common law requirements and corporate governance issues.
To help you better understand the business of your organisation and identify the responsibilities involved in your club’s financial management, read through the corporate governance and financial information checklist. This checklist should be completed by directors at least annually but can be used more often according to your needs.
If your club is incorporated under the Associations Incorporation Act (NSW) 1984 or under the Corporations Law, there are specific legal obligations in relation to financial responsibilities that apply to your club. To help you understand and meet those requirements, refer to the incorporation requirements checklist.