Under common law members of the management committee have obligations arising from the trust placed in them by the members to properly manage the association. This obligation is called Fiduciary Duty.
This includes:
Members of the management committee must keep up-to-date with the company’s affairs. If a member of the management committee fails to carry out their duty and as a result they are ignorant of improper conduct by another person within the organisation, then they will have no defence should they be sued in a court of law.
Failing to attend committee meetings is an example. If the association becomes insolvent, for instance, an office bearer will not be able to escape liability on the basis of ignorance through not attending meetings.
Members of the management committee must not take action out of self-interest or make use of their position for self gain or to help a friend or family member.
A committee member using their position on a committee to ensure their own selection, or the selection of their own athletes for overseas events when others more worthy are available, is an example.
A committee member must not take business opportunities that otherwise would have gone to the organisation. Here are two examples:
| a. | An office bearer who is a builder uses his position on the committee to win the contract for building the new club house for his own building company. |
| b. | An association decides to import sports equipment from overseas to sell at a profit. An office bearer, realising that there is money to be made, also begins to import and sell the sports equipment in direct competition with the association. |
Members of the management committee must not misuse confidential information.
It is important that office bearers to treat information about members with confidentiality. The membership database should not be sold or given to persons outside the management committee and/or its paid officers.
Furthermore, members of the management committee should not make use of the information contained in the association's database or any other information about members for their own business use.
Members of the management committee must exercise a degree of care and diligence over the administration of the organisation's affairs (especially financial affairs)
It is especially important that office bearers ensure that:
The Books of Account are properly audited and financial statements are produced by the auditor. Although an auditor is employed, the responsibility for the preparation of financial statements remains with the office bearers i.e. the responsibility cannot be delegated.
The association does not incur debts that cannot be paid as they fall due (insolvent trading). If this occurs office bearers can be personally liable.