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Advice from Outside the Square

Category Archives: Managing Indigenous Organisations

Related Party Benefits

Related Party Benefits are benefits, outside of normal remuneration or commercial arrangements, given by a Corporation to a related party. For example if the Chairperson is given a loan by the Corporation, or another Director is provided with free housing, outside of normal remuneration or outside of an arms-length commercial arrangement where they have provided a service and are getting paid for that service - these are Related Party Benefits. Related parties include Directors and close relatives, and the entities or companies they control. Both regulatory bodies, ASIC and ORIC, require that Related Party Benefits and transactions are approved by members at general meeting, or where allowed by the legislation, approved by the Board. They must be transparent. Even without legislation it is simply good governance to manage any transactions in which related parties gain a benefit. Clearly this could be a minefield in an Indigenous organisation. (more…)...
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