Relief for smaller charities from some Whistleblowing requirements

November 14, 2019
In the Media

ASIC has announced that small and medium charities which are companies limited by guarantee will now not have to prepare and adopt a Whistleblower Policy document. You can view the media release and associated documents here 

As a result, charities with revenue less than $1m can now take a more measured approach, adopting policies and processes that best suit them without the threat and urgency of the former January 1 deadline. 

Legislation amending the Corporations Act passed earlier this year provides that amongst other entities, all companies limited by guarantee were required to prepare and adopt a formal written Whistleblower Policy, including substantial details set out in the legislation, by 1 January 2020. Many religious charitable organisations take the form of a company limited by guarantee, and so at first blush this legislation imposed a significant burden on them. Partly at the instigation of representations of the CMA Standards Council, ASIC decided to conduct a public consultation to seek feedback if it was appropriate to impose this burden on all such charities. The CMA Standards Council amongst others made a formal submission to ASIC urging that relief be granted to small charities, and we are pleased to report that ASIC has agreed to exempt charities with revenue less than $1m from this requirement.

Steve Kerr, the Executive Director of the CMA Standards Council said “We are delighted that ASIC has seen the force of the arguments that making small charities spend time and money on drawing up a formal written Policy which met the detailed legislative requirements was not the best use of their resources. While the CMA Standards Council encourages every Christian organisation to have a policy or process which protects whistleblowers, heavy-handed Government intervention is not the best way to do this. We would much rather come alongside an organisation and help it prepare something which is suitable for its own unique situation.”

For the sake of clarity:

Charities which are companies limited by guarantee which have revenue over $1m still need to get a formal Whistleblower Policy meeting the statutory requirements in place by 1 January 2020;

Charities which are not companies limited by guarantee (and do not otherwise fall under the legislation) do not need to prepare a formal Whistleblower Policy, regardless of size; and

All charities which are companies limited by guarantee will have to comply with the other parts of the legislation regarding whistleblowers, including legislated protections for whistleblowers.

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