EXPLANATORY MEMORANDUM
Supplemental Royal Charter of the Institute of Chartered Accountants in Australia
Approval of new By-laws
On 22 August 2007 a Supplemental Royal Charter ("the Charter") was granted to the Institute of Chartered Accountants in Australia ("the Institute"). Article 21 of the Charter provides that the Institute may from time to time, by resolution approved by a ballot conducted in accordance with the By-laws, make such By-laws for the better execution of the Charter, the furtherance of the objects of the Institute and generally for regulating the affairs of the Institute as to the Institute seem fit and may from time to time rescind, vary or add to any By-laws and make others in their stead, but so that the By-laws for the time being are not in any respect repugnant to the laws of the Commonwealth of Australia or of any of the States or Territories comprised in the Commonwealth or inconsistent with the express provisions of the Charter.
Article 22 of the Charter provides that no By-law or any rescission or variation thereof or addition thereto shall come into operation until the same shall have been submitted to and approved by the Governor-General in and over the Commonwealth of Australia or the person for the time being administering the Government of the Commonwealth of Australia.
Article 23 of the Charter provides that the Board of the Institute shall cause all such By-laws, when approved, to be printed and published together with the formal approval of the Governor-General in the Official Gazette of the Commonwealth of Australia.
The Institute is now seeking the approval of a new set of By-laws, incorporating a number of amendments.
The proposed amendments to the By-laws were made by resolution approved by the requisite majority of members in an electronic and postal ballot of members conducted in accordance with the By-laws in November 2012.
The principal amendments to the By-laws involve:
- introducing a definition of “document”, specifically stated to include an electronic mail
- adding a disciplinary sanction that permits the removal of a member’s fellowship status
- expanding the bases on which disciplinary action can be brought against a member to include where the member has entered into undertakings or consent orders, and where the member has had the imposition of a condition or restriction on any professional registration or licence
The opportunity has also been taken to make a minor change to the language of the By-laws that identifies conditions that must be satisfied for admission to membership of the Institute, and to remove reference to a refund of application fees for an unsuccessful application for membership, so that the matter of such refunds can be dealt with by business policy rather than via the By-laws.
Full version of the new By-laws document can be obtained on the Institute of Chartered Accountants in Australia’s website http://www.charteredaccountants.com.au/The-Institute/Governance/Our-governance-model.aspx.
Witness under my hand 13/2/2013
Quentin Bryce AC
Governor-General
Overview
The Supplemental Royal Charter of the Institute of Chartered Accountants in Australia, enacted in 2007, aims to provide the Institute with the authority to enact By-laws that facilitate the execution of the Charter, the promotion of the Institute's objectives, and the regulation of its affairs. The By-laws must align with Australian laws and the explicit provisions of the Charter, with any changes needing approval from the Governor-General. The Institute is now proposing a new set of By-laws, incorporating amendments approved by members in 2012, to refine the definition of "document" to include electronic mail, introduce a new disciplinary sanction involving the removal of a member's fellowship status, expand the grounds for disciplinary action to include breaches of undertakings or consent orders and restrictions on professional registrations or licenses, and adjust the language regarding membership admission conditions and the refund of application fees. The new By-laws reflect the evolving professional landscape and the Institute’s commitment to maintaining high standards of practice and accountability among its members.
Scope and Application
The Supplemental Royal Charter of the Institute of Chartered Accountants in Australia, as approved, allows the Institute to enact By-laws for its governance and regulation, subject to certain conditions and the approval of the Governor-General. These By-laws are integral to the administration of the Institute and encompass a range of provisions, including disciplinary measures, definitions of terms such as "document" which now includes electronic mail, and criteria for membership. The Charter stipulates that any By-laws or amendments must not conflict with Australian laws or the Charter's explicit provisions. Furthermore, these By-laws are to be published in the Official Gazette of the Commonwealth of Australia once endorsed by the Governor-General. The proposed amendments, which were subject to a member ballot and approved in November 2012, include significant changes such as the introduction of a new disciplinary sanction that can result in the removal of a member's fellowship status, expanding the grounds for disciplinary action, and adjusting the language of the By-laws to streamline the membership admission process and remove references to refund policies for unsuccessful applications.
Key Provisions
The main operative sections of the Supplemental Royal Charter of the Institute of Chartered Accountants in Australia, as outlined in the Explanatory Memorandum, are Articles 21, 22, and 23 (Articles 21-23). These articles govern the Institute’s ability to make and amend its By-laws. Article 21 provides that the Institute can create, rescind, vary, or add to By-laws, as long as they do not conflict with Australian laws or the Charter itself. Article 22 stipulates that no By-law can take effect until it has been approved by the Governor-General. Finally, Article 23 mandates that once approved, these By-laws must be published in the Official Gazette of the Commonwealth of Australia.
The obligations and requirements imposed by the Charter on the Institute are significant. The Institute must ensure that any proposed By-laws do not contravene the laws of Australia or the express provisions of the Charter. Additionally, the Institute must conduct a member ballot to approve any changes to the By-laws, and subsequently seek formal approval from the Governor-General for these amendments. The Board of the Institute also has the responsibility of ensuring that all approved By-laws are printed and published in the Official Gazette. The Charter requires transparency and adherence to legal frameworks in the governance of the Institute.
Breach of the provisions outlined in the Charter can have serious consequences. If the Institute were to create By-laws that contravene Australian laws or the Charter itself, such By-laws would be null and void. Moreover, if the Institute fails to seek approval from the Governor-General for any proposed By-laws, those By-laws would not come into effect. While the Charter does not explicitly state penalties for such breaches, failure to comply with legal requirements could lead to legal challenges and potential liability. The integrity of the Institute’s governance is paramount, and adherence to the Charter’s stipulations is critical to maintaining its legitimacy and legal standing.