5. Primary Legislation Governing Schools

Corporations Act

Board Members must comply with legislative requirements that arise under the Corporations Act 2001. It is each Board Member’s responsibility to familiarise themselves with the following sections of the Act:

  • act with care and diligence (s180);
  • be informed on matters under discussion (s180);
  • act for the proper purpose (s181);
  • act in good faith and best interests of the corporation(s181);
  • not make improper use of the position on the Board (s182);
  • not make improper use of information obtained by virtue of the Board position (s183);
  • ask searching questions (s189);
  • declare any conflicts of interest (s191);
  • not use the position for personal gain without informed consent (s192); and
  • ensure that the School remains solvent (s588G).

See section 10 Legal Obligations and Potential Liability of Board Members for further detail on what these obligations entail.

Board Members can incur civil or criminal liability for breach of their fiduciary obligations or for breach of any of their legislative obligations under the Corporations Act 2001. However, this is unlikely if good governance processes are in place and observed. Ignorance is not an excuse for a Board Member failing to comply with his or her duties.

Questions and Answers

‘I am on a School Board and I have read the duties imposed by the Corporations Act.  But what do these actually mean for me in practice? What are my responsibilities?’

It is your responsibility to:

  • inform yourself of matters under discussion (ignorance is no excuse);
  • read the Minutes and ensure they represent a true and correct record;
  • ask questions or seek explanations whenever you do not fully appreciate the issues, discussions or resolutions;
  • ask relevant questions of school officers but do not ask questions for the sake of it;
  • understand the material in front of you;
  • be an independent team player, speaking your mind rather than going along with the rest of the Board;
  • respect the confidentiality of Board discussions;
  • seek specialist advice if necessary;
  • do not use any information obtained by virtue of your position on the Board for any purpose other than for what it is intended (i.e. not for any personal or pecuniary benefit or for the benefit of any third party);
  • declare any potential conflicts of interests; and
  • be assured that the School is able to pay its debts as and when they fall due.

Boards must also be aware of the legislation, both State and Commonwealth, which governs the legal basis for operation of Victorian Schools.  An overview of this information may be downloaded here.