Appointing and removing directors
There are rules and processes for becoming a director in the CATSI Act and your corporation's rule book.
Different ways people can start being a director
Being appointed as a director means you have started being a director.
There are different ways people can be appointed as a director.
The rules in the CATSI Act for how people are appointed as directors are replaceable. This means it's important to check the corporation's rule book to understand what director positions the corporation has, and the process for appointing people to them in the circumstances.
The types of appointments and rules in the CATSI Act are:
| Type of appointment | Process to make the appointment |
| to be a director upon the corporation's registration | by being listed as a director in the application to register the corporation, which is approved by the prospective members at the pre-incorporation meeting |
| to fill a vacant director position | by members passing a resolution in a general meeting |
| to make up a quorum for a directors' meeting | by directors passing a resolution in a directors' meeting. For this appointment to continue beyond the next AGM, it must be confirmed by members passing a resolution at the AGM. |
| to appoint an alternate for an individual director to exercise some or all of the director's powers for a specified period | by the other directors passing a resolution in a directors' meeting |
Extra rules designed by corporations
Some corporations tailor their board structure and composition in their rule book to create extra types of director positions with specific requirements such as being independent or having specialist skills or qualifications. The corporation's rules should include the process for appointing and removing people to these positions.
Appointing a director
- Understand the type of director position and circumstance for appointing someone to it.
- Check your rule book for the process that the corporation must follow for making the decision to appoint a director.
- Check the person is eligible for the director position and that appointing them will not cause the corporation to breach the majority of director requirements
- Get written consent from the person – before a person is appointed as a director that person must sign a document saying they agree to become a director of the corporation and declare they are eligible. The corporation must keep a copy of this consent.
- Get approval from the right approvers for the director position using the right process – members or the board.
- Get the person's personal details including director ID for the corporation records within 14 days of their appointment. If they don't have a director ID, they must apply for one from the Australian Business Registry Service.
- Notify ORIC of to update your corporation's records on the Register of Aboriginal and Torres Strait Islander Corporations within 28 days of the appointment.
How to stop being a director
A person will stop being a director if:
- their term of appointment ends
- they’re disqualified from managing a corporation
- the person dies
- the person resigns in writing to the corporation giving at least 14 days notice of their end date
- members or other directors remove them from being a director.
Your corporation must always have at least one director. If a director is the only director remaining, their term of appointment doesn't end nor can the corporation remove them.
Obligation to update corporation records
Each director and their corporation have obligations under the CATSI Act to keep director information updated in the corporation's records and on the Register of Aboriginal and Torres Strait Islander Corporations.
Learn more about requirements for keeping director information updated and how to do it.
Invalid appointments
To ensure a director's appointment is valid:
- the person must be eligible to be appointed as a director at the time of their appointment
- the appointment must follow the procedures outlined in the CATSI Act and the corporation’s rule book.
An invalid appointment can result in:
- immediate removal
- reversed or invalid decisions
- compliance issues
- legal penalties.
You may need to:
- report the invalid appointment and explain how you’ll rectify it
- appoint a new eligible director.
Learn more in our policy statement on invalid appointments.
Alternate directors
An alternate director is someone who is appointed to fill the place of a director for a set period or until the director can return to the role.
The rule in the CATSI Act is that a director can appoint another person in their place for a specified period with the rest of the board’s approval. The alternate director might be authorised to exercise all of the director’s powers or only some of them.
The rule in the CATSI Act for alternate directors is replaceable, so check the corporation's rule book to see if they allow directors to appoint an alternate director. Also check for rules about the role's powers, eligibility requirements or the process to appoint them.
When to appoint an alternate director
There might be times when a director is not able to perform their role for a period of time. A director might do this, for example, if they’re sick for a long time or on holidays.
Powers and duties
The alternate director can be given all of the appointing director's powers or just some of them.
When an alternate director exercises the appointing director's powers it has the same effect as if the appointing director had exercised them.
A person appointed as an alternate director has the same legal duties as every other director.
How to appoint an alternate director
The appointment must be in writing and include:
- personal details of the person being appointed as the alternate director – their name, date and place of birth, residential address, their director ID
- the date they are being appointed
- the name of the appointing director who is being replaced
- when the alternate director's appointment ends (either the set date or the circumstance)
- any conditions on their appointment such as whether they can sign contracts, reports or forms on behalf of the corporation
Records of the appointment
The corporation must keep records about the appointment:
- a copy of the written appointment
- minutes of the directors' meeting showing the decision of other directors to approve the appointment of the alternate director
- the alternate director's personal details
How to stop being an alternate director
A person stops being an alternate director if:
- their term of appointment ends
- they resign in writing to the corporation
- the appointing director can terminate the alternate's appointment at any time in writing
- they are removed.
If a corporation removes the appointing director, this does not remove the alternate director – they remain unless you remove them too.
Notify ORIC
The corporation is required to notify ORIC within 28 days of the alternate director being appointed, any changes to their details, and when their appointment ends.