The Law Commission’s review of the Incorporated Societies Act affects a wide range of organisations from the New Zealand Rugby Union to the local lawn bowls club.  As the Law Commission notes in its review of the 1908 Act, the Act is ‘uncomfortably old’.  However, the majority of the not for profit sector in New Zealand is governed by it.

Does your organisation have processes in place to resolve disputes and conflicts of interest?

In its review, the Commission identified that many incorporated societies fail to have rules which competently resolve conflicts of interests and disputes.   One of the Law Commission’s key proposals is that there should be a standardised code of rules, which could act as a template for organisations that choose not to have their own specific rules.  This would benefit incorporated societies that do not have the skills and/or resources to create effective constitutions.

What would your committee’s obligations be under the new Act?

In addition, the Law Commission proposes that there should be a code of duties which would set out the obligations for committee members. These may be similar to director’s obligations under the Companies Act 1993.  Given the recent cases involving directors of financial institutions and their obligations, committee members should watch this possible development closely.

For more information about the review of the Act and the possible impacts on your organisation, or to talk about your society’s rules, call us on (04) 473 6850.