The information contained in this section is intended to inform members of Council and other committees of the University of their legal responsibilities as members and to provide, particularly in paragraph 8 Principles of Conduct: Guidelines for Council Members, a clear set of principles to which members can refer.
The information was reviewed in 2013 by the University's solicitors, Fisher Jeffries, who endorsed it as an accurate summary of the relevant legal principles at the review date. Information has subsequently [December 2014] been incorporated in relation to the impact of South Australia's Independent Commissioner Against Corruption legislation (ICAC Act). Further updates have been implemented [Dec 2017] following amendment to the Flinders University Act.
2. The Nature of the Corporate Entity
The University is a type of corporation often referred to as a "public statutory corporation". It is incorporated by its own Act of Parliament, the Flinders University Act 1966 (referred to hereafter as "the University Act"), for public purposes. The University is not incorporated under the Corporations Act 2001 and, for all practical purposes, is therefore not subject to that Act. At the same time, the University is not an instrumentality or agency of the Crown. Any doubts about this were clarified by the inclusion in 2005 of an explicit provision in section 3(7) of the University Act.
3. The Law that Applies to the University
The University is subject to the University Act, the rules of common law and equity as modified by the express provisions of the University Act, and of any other relevant state or federal legislation. It is also bound by its own statutes, but has the power to alter these.
4. Functions of the University
The functions of the University as a body corporate are prescribed in Section 4 of the University Act.
"The functions of the University include, within the limits of its resources -
(a) the provision of educational facilities at university standards for persons who being eligible to enrol seek the benefits of such facilities; and
(b) the establishment of such facilities as the University thinks desirable for providing courses of study, whether within the University or elsewhere, for evening students, giving instruction to and the examination of external students, and providing courses of study or instruction at such levels of attainment as the Council thinks appropriate to meet the special requirements of industry, commerce or any other section of the community; and
(c) generally, the dissemination of knowledge and the promotion of scholarship."
5. Powers of the University
The powers which the University may exercise are set out in Sections 3(3) to 3(6) of the University Act.
"3(3) Subject to subsection (5), the University is a body corporate invested with full juristic capacity and unfettered discretion, subject to the laws of this State, to conduct its affairs in a manner it thinks fit.
(4) The University may exercise its powers within or outside the State (including outside Australia).
(5) The University must not alienate (except by way of lease for a term not exceeding 21 years), mortgage or charge land vested in or conveyed to the University on trust except with, and in accordance with any terms or conditions of, an approval given by the Governor.
(6) To avoid doubt, subsection (5) does not confer any power to alienate land contrary to the terms of a trust relating to the land."
If, in the exercise of its powers, the University commits or threatens to commit a civil wrong such as a breach of contract, or acts in excess or abuse of its powers, it may be sued privately for damages or other appropriate relief.
6. Statute Law and Common Law
The University is also subject to general statute law and the common law.
Statute law comprises legislation enacted by the South Australian Government and Commonwealth legislation that applies in the State. It includes an increasing number of Acts regulating matters such as taxation, freedom of information, work health and safety, the environment, civil rights, etc.
Common law is "judge-made" law developed by the courts through decisions handed down by judges and includes common law and equity. Statute law usually reflects the non-statutory law but can differ in the penalties and remedies and the standard of conduct applied.
If the University commits an offence under any penal statute, state or federal, the University may incur a fine or other penalties set out in the legislation.
The University may also incur vicarious liability through the actions of its employees or agents, either at common law or under statute.
In summary, the University is answerable in the courts for its performance of its statutory public duties, for its behaviour as a corporate citizen engaged in dealings with other citizens and society at large, and to some extent, for the wrongful acts of persons acting under its authority.
7. Principal Duties of a Council Member to the University
The principal duties owed to the University by Council members are imposed by the University Act. They are the statutory embodiment of fiduciary duties which have long been imposed by the law of equity and may be broadly described as:
- the duty to act honestly, in good faith for the benefit of the University;
- the duty to avoid actual and potential conflicts between personal interests and the interests of the University.
- and of the duty of care, which has been determined by common law.
These duties are similar to the duties and obligations imposed on company directors by the Corporations Act, although neither the Corporations Act 2001 (Cth) nor the Public Corporations Act 1993 (SA) apply to members of the University Council1
Section 5 (4) of the University Act states: "A member of the Council is not, in the exercise of his or her powers or functions as such, subject to the direction of any person or body of persons."
Section 18A states: "A member of the Council must at all times in the performance of his or her functions
(a) exercise a reasonable degree of care and diligence; and
(b) act in the best interest of the University."
Section 18B states:
(1) A member of the Council must at all times act in good faith, honestly and for a proper purpose in the performance of the functions of his or her office, whether within or outside the State.
(2) A member of Council must not improperly use his or her position to gain an advantage for himself or herself or another person, whether within or outside the State.
(3) Subsection (1) does not apply to conduct that is merely of a trivial character and does not result in significant detriment to the interests of the University.
The fiduciary duty involves both the nature of the decision (is it in the interests of the University, has the power been used for the purpose for which it was given?) and the propriety of the conduct of the decision-maker (has the Council member avoided all possible conflict between his or her interests and that of the University?).
Other examples of fiduciary relationships are those between an agent and principal, a trustee and beneficiary, solicitor and client, a director and a corporation.
The duty of care prescribed in section 18A(a) is concerned with competence.
Conduct has been measured in two ways:
- an objective standard - the person is expected to take such care as a reasonably prudent person might be expected to take on his/her own behalf;
- a subjective standard - the person is expected to exhibit in the performance of his/her duties, the degree of skill that might be reasonably expected from a person of his/her knowledge and experience.
Over time the courts have defined these principal duties and have developed standards of conduct which governments have also included in the legislation that applies to corporations. For the benefit of Council members, these duties, as they have been defined by the courts, are summarised in the following Guidelines.
8. Principles of Conduct: Guidelines for Council Members in Exercise of their Principal Duties To Council
Expressed in the form of directives for members of Council, the principles of conduct developed by the courts may be practically summarised as follows:
a. Always act honestly;
b. Always act in the best interest of the University;
c. Attend Council meetings regularly;
d. Read Council papers, be attentive at meetings and take an active part in the business of Council;
e. Be prepared to hear and consider all relevant information before making a final decision as members cannot bring a closed mind to the decision making process; it is the legal obligation of a Council member to bring a fair and unprejudiced mind to any issue before the Council meeting;
f. Never vote at the direction of another person, either an outsider or another Council member; thus, a member elected by a constituency must not vote at the direction of the constituency; the member who is the presiding member of Academic Senate must not vote at the direction of the Senate;
g. Never promote one's own personal interest;
h. Never divert or make improper use of the University's corporate business opportunities or otherwise compete with the University;
i. Never make improper use of University property or confidential information;
j. Only exercise the powers for the particular purpose for which the powers were conferred and not for some extraneous purpose, even though the extraneous purpose might appear to be in the interest of the University;
k. Always act to avoid actual or potential conflict between one's duties to the University and one's own interests;
l. Always act with reasonable care. Where the courts have had to measure the requisite degree of care and skill, they have generally demanded a subjective standard, ie a degree of skill that might be reasonably expected of someone with the knowledge and experience of the person in question;
m. Make reasonable efforts to become familiar with the affairs of the University, its public duties and functions;
n. Make reasonable efforts to be familiar with legislation and the penalties for which the University or its officers personally may be held liable if the University commits and the Council members have permitted an infringement of the legislation;
o. Ensure Council has in place policies and procedures for the administration of the University's affairs and the conduct of day-to-day business together with a system of Council supervision. Such provisions enable members of Council to trust those put into a position of trust for the express purpose of attending to the details of management.
The guidelines have been drawn up to ensure that Council is aware that high standards are expected of all directors (AS Sievers, "Directors' Duty of Care: What is the New Standard?" (1997) 15 Company and Securities Law Journal 392). The prevailing standards that apply are always open to change by Parliament and courts (Professor Baxt, Duties and Responsibilities of Directors and Officers, 17th edition, 2002, Australian Institute of Company Directors).
Whether a court finds that a person has breached legal duties will always depend on the circumstances in a particular case. Nevertheless, it is considered that a Council member who adopts the above guidelines as a standard of conduct and practises them conscientiously would be unlikely to be found personally liable for any damages, fines or other penalties or remedies as a result of acts or omissions as a member of Council.
9. Duties with respect to work health and safety
Consistent with Council's role as the governing body of the University and expanding on the principles for conduct of Council members, set out in paragraph 8, a Council member must make reasonable efforts to:
a. be familiar with State work health and safety legislation and the University's obligations to ensure a safe working environment;
b. be familiar with the University's work health and safety and injury management systems, including the processes for the review and audit of work health and safety and injury management systems;
c. understand the nature of the University's operations and the general hazards and risks associated with those operations;
d. exercise due diligence to ensure that the University complies with its work health and safety obligations, including that :
- the University has in place appropriate systems of work
- adequate resources are provided and used to eliminate or minimise risks to health and safety
- appropriate work and safety processes are in place including for receiving, considering and responding in a timely fashion to information regarding incidents, hazards and risks.
e. Verify the matters in d. above including by actively monitoring, reviewing and evaluating the University’s Work Health and Safety Management System.
10. Duties with Respect to Conflict of Interest
Expanding on the general principle that a Council member must not "improperly use his or her position to gain an advantage for himself or herself or another person" (section18B(2)), the University Act contains specific provisions governing the duties of members of Council who have a conflict between their personal or pecuniary interests, and the interests of the University.
These are set out in section 18C:
"(1) A member of Council who has a direct or indirect personal or pecuniary interest in a matter decided or under consideration by the Council - (a) must, as soon as is reasonably practicable, disclose in writing to the Council full and accurate details of the interest; and (b) must not take part in any discussion by the Council relating to that matter; and (c) must not vote in relation to that matter; and (d) must be absent from the meeting room when any such discussion or voting is taking place."
"(6) If a member of Council has or acquires a personal or pecuniary interest, or is or becomes the holder of an office, such that it is reasonably foreseeable that a conflict might arise with his or her duties as a member of the Council, the member must, as soon as is reasonably practicable, disclose in writing to the Council full and accurate details of the interest or office."
Note that all four components of section 18C(1) must be followed: disclose the interest, do not participate in discussion on the relevant matter, do not vote, and be absent during the discussion and the vote. Note also, that under sub-section (6), potential conflicts, not just actual conflicts, must be disclosed.
Personal or pecuniary interest is not defined, except that "a member of the Council will be taken to have an interest in a matter ... if a relative of the member, has an interest in the matter". Relative is specifically defined as being "the spouse, domestic partner, parent or remoter linear ancestor, son, daughter or remoter issue or brother or sister of the member" (sub-sections 18C(8) and (10)). It is possible that there might still be a conflict between an interest involving other relatives of a Council member, falling outside this definition, and the University's interests. Council members must assess the potential for such conflict and disclose it as appropriate.
A personal interest could include an affiliation with, membership of or holding office in particular organisations or interest groups. However, Section 18C does specifically state that:
"(2) A member of Council will not be taken to have a direct or indirect interest in a matter for the purposes of this section by reason only of the fact that the member has an interest in the matter that is shared in common with staff members, graduates or students of the University generally, or with a substantial number of staff members, graduates or students of the University."
11. Guidelines in Respect of Conflict of Interest
Expressed in the form of directives for members of Council, the principles of conduct in respect of conflict of interest, as specified by the University Act and developed by the courts, may be practically summarised as follows:
Remember that when considering whether a conflict of interest exists or not, a Council member has an interest if the Council member or a person with whom the member is closely associated on a business or personal basis would, if the matter were decided in a particular manner, receive or have a reasonable expectation of receiving:
- a direct or indirect pecuniary benefit or suffer or have a reasonable expectation of suffering, a direct or indirect pecuniary detriment; or
- a personal or non-pecuniary benefit or suffer or have a reasonable expectation of suffering, a personal or non-pecuniary detriment.
Remember when considering whether a conflict of interest exists, that a person is closely associated with the Council member if that person is:
- a spouse, child, de facto spouse or close relation of the Council member (see specifically the definition of relative in s.18C(10) of the Act);
- an employer or employee of the Council member;
- a business partner of the Council member;
- a person with whom the Council member has a current and ongoing professional relationship and from whom the Council member receives fees for professional or other services;
- a corporation of which the Council member is a director;
- a proprietary company of which the Council member is a shareholder;
- a beneficiary under a trust of which the Council member is a trustee.
Always disclose any direct or indirect pecuniary interest and be absent from any discussion or voting on the matter. For example, a member who is a shareholder of a public company would be deemed to have a direct pecuniary interest in a decision of Council to award a tender to that company;
Always disclose a direct or indirect personal interest in a matter before the Council and be absent from any discussion or voting on the matter. For example, a member who is related by birth or marriage to a person who is recommended to Council for an appointment could be deemed to have either a direct or indirect personal interest depending on the nature of the relationship;
Always disclose an individual personal interest in a matter before the Council, and be absent from any discussion or voting on the matter. For example, a member being recommended to Council for an appointment or award could have such an interest;
If unsure whether there is a conflict of a personal interest and a duty to the University Council, ask for advice from the University Secretary before a meeting, or from the Chancellor during a meeting, Notwithstanding any such advice, Council members are personally responsible for assessing and declaring any actual or potential conflict of interest. A failure to disclose a conflict of interest and comply with the provision of s.18C constitutes a breach of the Act.
Note that all disclosures of conflicts of interest are required in writing, and must be recorded in the Council minutes.
12. Legal responsibilities of Council Members in signing off the Annual Financial Statements
There is both statute law and standards which should be referred to in considering the legal obligations of Council members in signing off annual financial statements.
12.1 University Act
The primary source of the general obligations of Council members which will apply in this particular context is the Flinders University Act 1966 (SA), (University Act), re-stated in section 7: Principal Duties of a Council Member to the University and expressed as Principles of Conduct at clause 8. Although the Corporations Act 2001 (Cth) does not apply to members of the University Council, case law dealing with these duties and obligations under that Act are useful in providing guidance on how these duties and obligations should be exercised.
For example, in relation to the duty of care and diligence, in ASIC v Healey2 the Federal Court of Australia said:
All directors must carefully read, understand and focus upon the contents of financial reports, consider whether the financial statements are consistent with his or her knowledge of the company’s financial position, consider the statutory requirements, apply the knowledge he or she has of the affairs of the company, and if necessary, make further inquiries if matters revealed in the financial statements call for such inquiries …
The directors have an objective duty of skill, competence and diligence in the understanding of the financial statements that are to be disclosed to the public as adopted and approved by the directors. The objective duty of competence requires that the directors have the ability to read and understand financial statements. A director must, at least, understand the terminology used in the financial statements and understand that financial statements classify assets and liabilities as current and non-current, and what those concepts mean. This classification is relevant to the assessment of solvency and liquidity.3
The Court made it clear that directors, in approving financial statements, must bring their own knowledge of an organisation’s situation to bear and cannot simply rely on auditors or management. This case also suggests that it is unlikely that a Council member can fulfil his or her duties without being reasonably financially literate.
12.2 Australian Charities and Not-for-profits Commission Act 2012 (Cth) (ACNC Act)
One of the governance standards introduced under the ACNC Act on 1 July 2013, is relevant to signing off annual financial statements. A registered entity (Flinders University is a charity registered with the ACNC) must take reasonable steps to ensure that its responsible entities (here, Council members) are subject to, and comply with, the following duty that specifically addresses the management of financial affairs:
5(2) (f) to ensure that the registered entity’s financial affairs are managed in a responsible manner;
In regards to this duty the ACNC has stated that registered entities should have appropriate and tailored financial systems and practices in place suitable to the size and circumstances of the entity and the complexity of its financial affairs.4 Specifically in regards to financial statements, the ACNC suggests:
- Council members should be alive to issues of significant variation in expenditure or income and ask for additional information if considered necessary. The Council may wish to seek independent advice if there is any serious discrepancy or uncertainty;
- financial information should be received at regular intervals before each board meeting. This information may include the latest financial accounts, a comparison of actual figures against the budget, an explanation of any variations from the budget, or details of cash flow and closing bank balances;
- ensuring there is a culture where Council members are not embarrassed to ask questions about the accounts.5
12.3 Public Finance and Audit Act 1987 (SA)
The Public Finance and Audit Regulations 2002 (PFA Regulations) provides that the University is a public authority for the purpose of the Public Finance and Audit Act 1987 (SA) (PFA Act).6 As a prescribed public authority under the PFA Regulations, the University is required to deliver its financial statements to the Auditor-General within 42 days after the end of the financial year (31 December, in the case of the University) that the statements relate to.7
The financial statements must be accompanied by a certificate of compliance with the requirement that the statements:
a) are in accordance with the accounts and records of the University;
b) comply with the relevant Treasurer’s instructions;
c) comply with relevant accounting standards; and
d) present a true and fair view of the financial position of the University at the end of the financial year and the results of its operations and cash flows for the financial year.8
The certificate must also include a statement as to the effectiveness of the internal controls adopted by the University for the financial year over its financial reporting and preparation of the financial statements.9
The certificate must be signed by:
a) the Chief Executive Officer - in the University’s case this is the Vice-Chancellor; and
b) the person entitled to preside at meetings of the Council which, in accordance with section 18(4) of the University Act, is the Chancellor (or in his or her absence a member of the Council elected by those present); and
c) the officer responsible for the financial administration of the University (the Chief Financial Officer).11
The PFA Act states that it is an offence under section 23 for a person to intentionally or recklessly provide the Auditor-General with a certificate that does not comply with the requirements set out above, with a maximum penalty of $5,000.11
12.4 HESA and ARCA
Section 19-10 of the Higher Education Support Act 2003 (Cth) and section 58 of the Australian Research Council Act 2001 (Cth) prescribe obligations in relation to financial statements which require that financial statements are provided in a prescribed form.
The prescribed form for financial statements is currently provided in the Financial Statement Guidelines for Australian Higher Education Providers for the 2013 Reporting Period (which changes on an annual basis).
This form includes the requirement that relevant officers certify in annual statements in respect of monies provided by the Australian Government that the monies were used for the purpose for which they were provided.
Certification is required to be provided by the Vice-Chancellor and a Member of Council on behalf of the Council declaring as follows:
“The amount of Australian Government financial assistance expended during the reporting period was for the purpose(s) for which it was intended and [the University] has complied with applicable legislation, contracts, agreements and program guidelines in making expenditure.
[The University] charged Student Services and Amenities Fees strictly in accordance with the Higher Education Support Act 2003 and the Administration Guidelines made under the Act. Revenue from the fee was spent strictly in accordance with the Act and only on services and amenities specified in subsection 19-38(4) of the Act.”
13. Personal (Direct) Liability of a Council Member to the University
Duties owed to the University arise as a result of the member's acceptance of the position on Council and are owed to the University alone, not to persons outside the University.
Thus, a breach of duty would be a breach of a duty owed to the University and would be actionable only by the University.
The Council may remove a Council member from office on the ground of serious misconduct as provided under section 6(6)(d). Section 18D specifically provides that non-compliance with a duty imposed under sections 18A, 18B or 18C "will be taken to be serious misconduct and a ground for removal of the member from office".
The Council would have to decide whether to seek remedies such as damages for losses incurred by the University or recovery of gains made by the member, as a result of a breach of a duty owed to the University. Under section 18E, the University is specifically given the power to bring a civil action against a member or former member of Council for breaches of the duties imposed under sections 18B or 18C.
Were the Council to decide not to take action against a member who was in breach of duty, the circumstances could be such that the Attorney General might decide to intervene and bring an action on behalf of the University in order to achieve a remedy.
In summary, liability on the part of a member of Council to the University would be likely to arise only if loss had been caused to the University by a member of Council who was in breach of his/her duty and it could be shown that the loss was a result of the breach of duty.
14. Liability of a Council Member to Third Parties
Council members owe no duty, under the University Act or at common law, by virtue of their office, to anyone other than the University. Nor can they be made liable to third parties for the debts or other contractual engagements of the University. In this respect, their position is different from company directors who, under the Corporations Act, in limited circumstances relating to insolvent trading by the company, are made personally liable for debts.
It is in the area of statutory offences that Council members may be at real personal risk of liability for the wrongful acts of the University. There is an increasing tendency for legislation to impose heavy penalties on corporations for offences under the legislation, and to make the directors and other officers and managers personally liable as well (often referred to as lifting the corporate veil). In some cases, third parties are given the right to proceed against the directors for compensation in respect of the offence.
Examples of this can be found in legislation relating to Dangerous Substances, Work Health and Safety, Competition and Consumer, Environment Protection, Equal Opportunity, Privacy, Superannuation Guarantee Administration, Taxation Administration, Fair Work and Fair Trading.
Much of this legislation is capable of applying to the University and of rendering Council members and other executives of the University personally liable for an offence by the University.
Provided, however, that the Council takes reasonable steps to ensure that there is an effective system for ensuring that the University complies with its statutory obligations, it is unlikely that a Council member would be pursued and held liable for statutory offences.
Reforms to Commonwealth and State legislation in 2012 and 2013 harmonise the imposition of personal criminal liability for corporate fault across all Australian jurisdictions with the objective of modifying or removing personal and vicarious liability of directors and other executives of bodies corporate for offences committed by the bodies corporate. The effect of this reform is discussed below.
Part 16, below, deals with protection for Council members against some of these potential liabilities.
15. Directors' Liability Legislation
The SA Directors Liability Act commenced on 17 June 2013 and is part of the implementation of the Council of Australian Governments’ (COAG) directors’ liability reforms which aim to harmonise the imposition of personal criminal liability for corporate fault across all Australian jurisdictions.
The Personal Liability for Corporate Fault Reform Act 2012 (Cth) (Commonwealth Directors Liability Act) amends Commonwealth legislation to achieve a number of objectives.
Notwithstanding that the SA Directors Liability Act, the Commonwealth Directors Liability Act and equivalent legislation in other States purport to modify or remove personal and vicarious liability of directors and other executives of bodies corporate for offences committed by the bodies corporate, the reform does not affect the general obligations and responsibilities to act in the best interests of an entity, to act honestly and in good faith for the benefit of an entity and exercise a reasonable degree of care and diligence in performing duties, which are clearly set out in the University Act and re-stated in section 7: Principal Duties of a Council Member to the University and expressed as Principles of Conduct at clause 8.
16. Protection against Liability
The University is not permitted at common law to pay for insurance to indemnify its Council members against liability to the University for breach of their duties to the University.
Such insurance may be available for Council members to purchase personally or as a group, but the cost would have to be met entirely by the Council members personally.
Section 29 of the University Act provides an indemnity by the University for Council and committee members against all claims and actions for acts or omissions undertaken in good faith in the exercise of their powers or duties. This would include statutory fines and penalties but not those of a criminal nature nor those expressly limited by the imposing statute.
Additional protection is provided by the University's Management Liability policy, which provides protection against claims made by third parties against Council members. Council members are not required to contribute to the cost of the policy.
This policy may also provide coverage for certain fines and penalties, provided it is not unlawful for the insurer to provide coverage in the particular circumstances. Policy exclusions, limitations and thresholds apply.
16.1 Deed of Indemnity, Access and Insurance
To mitigate the risk of personal liabilities being incurred by Council members or Senior Officers in the course of carrying out their duties and functions, the University enters into deeds of indemnity with relevant categories of indemnified persons (i.e. Council members and certain Senior Officers) to provide a further level of potential protection beyond that offered by statute and the existing insurances. This includes protection against legal defence costs which are often unmanageable for most individuals in a contested statutory prosecution, and may exceed any actual penalty.
17. Rights of Council Members
For a member of Council to discharge his/her duties to the University requires the member to have a sound working knowledge of the affairs of the University and of its economic, political and social environment and an understanding of its resources and its commitments. Accordingly, the member has a right to have prompt and direct access to information about the University's business and to place items of business before Council.
The right to information must be balanced against the University's need in very limited cases to maintain the utmost confidentiality concerning details of an agreement or contract with a third party. Council members must have confidence in the executive of the University and, on occasion, this may extend to being prepared to support a decision whether or not the individual Council member has all the details of the decision. However, if a Council member believes that his or her general duty to exercise a reasonable degree of care and diligence can only be met by access to certain information, then ultimately that member of Council cannot be denied the information if he or she demands it.
Where a member insists upon being supplied the information in disregard of a claim for confidentiality by those who handled the matter on behalf of the University, the member would be obliged to act in accordance with the guidelines adopted by Council in relation to confidentiality.
Where an individual member of Council requests information or documents, that request should be via the Chancellor or Vice-Chancellor, and the information and documents would usually be provided to the Council as a whole. This is because Council members function as a collective and not individuals.
18. Procedures for Lodging Disclosure of Interest by Council Members
18.1 At the commencement of a Council member's appointment, he or she is required to complete a Disclosure of Interests form and lodge it with the University Secretary, who will circulate a copy to all Council members with the Agenda papers for the next meeting. If a member's interests change (including a material increase in the nature or extent of an interest), the member must ensure that a new form is lodged as soon as is reasonably practicable with the University Secretary for circulation to Council members with the Agenda papers for the next meeting.
18.2 A copy of each Council member's Disclosure of Interests form (Appendix 11) will be held on a University file and will be made available on request through the University Secretary for Council members to peruse. The Chancellor and the University Secretary are entitled to remind Council about an interest that has been disclosed by a Council member where this is relevant to a matter decided or under consideration by the Council.
18.3 The Council Agenda will contain a regular item to provide members with an opportunity to disclose any personal or pecuniary interests which may affect the proper process for decision-making on any particular agenda item. If a member becomes aware of an additional interest that has not previously been declared, he or she must advise the Chairperson or the University Secretary before the meeting or, where this is not reasonably practicable, inform Council of the matter in writing at the meeting, and take other action in accordance with 18.1 above.
18.4 If an actual personal or pecuniary interest in a matter decided or under consideration by Council is disclosed by a Council member, that Council member must not be present during Council discussions of the matter and must not vote on the matter, unless the other non-interested Council members have passed a resolution that:
- identifies the Council member, the nature and extent of his or her interest in the matter and its relation to the affairs of the University; and
- acknowledges that those Council members are satisfied that the interest is one falling within section 18C(2) of the University Act (namely, an interest that is shared in common with staff members, graduates or students of the University generally, or with a substantial number of staff members, graduates or students) and should not disqualify the Council member from being present or voting on the matter at the Council meeting.
18.5 If a Council member believes there is a potential conflict of interest, the University requires the same standards as apply to an actual conflict. Thus a potential conflict must be disclosed in accord with these procedures, and the Council member must not participate in discussion of or vote on the matter.
18.6 All disclosures made under this section will be recorded in the confidential minutes of Council.
19. Independent Commissioner Against Corruption
The functions of South Australia’s Independent Commissioner against Corruption (ICAC) include:
(i) the identification and investigation of corruption in public administration; and
(ii) the prevention or minimisation of corruption, misconduct and maladministration in public administration, including through referral of potential issues, education and evaluation of practices, policies and procedures;
The intent of the Independent Commissioner against Corruption Act 2012 (the ICAC Act) is to treat members of Council and its standing committees as public officers within the meaning of the Act, so that they then have an obligation to report corruption if they become aware of it, and are subject to the sanctions under the Act.
The key implication of the legislation for Council members, especially external members who operate in the wider community, is the need to be particularly aware of and to recognise potential conflicts of interest between personal or business interests and the interests of the University [Refer to the clause 11 guidelines for Council members to follow in respect of conflict of interest]. A former Chancellor of the University of New England, for example, was investigated by the NSW ICAC in relation to his purchase in 2005 with a business partner of a hotel from the University’s student union which he failed to disclose at the time to the University.
More information about ICAC, including a link for making a complaint report is available at www.icac.sa.gov.au or the University’s webpage http://www.flinders.edu.au/whistleblowers/ and from Council paper C 9/4/14, available on request from the Council Secretary.
1 However, the University Act does make one reference to the Corporations Act in section 6(7)(f), which provides for the office of a Council member to become vacant if the member is disqualified from managing corporations under Chapter 2D part 2D.6 of the Corporations Act.