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By Greg Thom, journalist, Institute of Community Directors Australia
Former charity directors are allegedly being harassed to register for director identification numbers (director IDs) when they are no longer required to do so.
Former charity directors are allegedly being harassed to register for director identification numbers (director IDs) when they are no longer required to do so.
In at least two instances related to the Community Advocate, regulators have been accused of threatening elderly former directors with prosecution or liability for charity debts if they don’t comply.
The former directors were contacted by Australian Business Registry Services (ABRS) staff who advised them they were required by law to register as directors with the Australian Securities and Investments Commission (ASIC).
When the former directors said they did not have to do so because this process has been handled by the Australian Charities and Not-for-profits Commission since 2017, they were incorrectly told they were required to register with both organisations.
The ABRS website states that a director ID is required for anyone who is a director of a company, registered Australian body, registered foreign company or Aboriginal and Torres Strait Islander corporation.
It describes a director ID as a unique identifier given to a company director who has verified their identity with the ABRS and says it is designed to prevent the use of false or fraudulent director identities.
One of the people who has been harassed left the board of the employment services sector not-for-profit CVGT Australia in 2017 and is no longer a director of any organisation.
CVGT company secretary Michelle Taylor said the tone of the ABRS representatives was aggressive and had left two elderly former directors distressed.
“When our former director called the ABRS they were told, firmly, that they ‘were listed on the ASIC record’ as a director and faced prosecution if they did not apply for a director ID,” said Ms Taylor.
After she contacted the ABRS on the former director’s behalf, the ABRS acknowledged the error, Ms Taylor said, but she remains concerned that the organisation is not coordinating with the ACNC and that other former directors may continue to be harassed to apply for a director ID they do not need.
“I’m furious about it. I’m so angry,” said Ms Taylor.
“Many of these former directors are likely to be elderly and will be just as distressed as my former director was.
“They’re getting phone calls and being told things like, if you don’t resign as a director, which they already have, you’re going to be liable for all the charity’s debts. I mean, the stuff they are being told is appalling.”
Ms Taylor said she had heard anecdotally of other examples of former directors being harassed when contacted by ABRS.
“I’ve spoken to other people who said this is happening all over the place.
“I also imagine that ABRS are not complying with Australia’s privacy and confidentiality law as they are requiring citizens to provide personal information for a registration that they do not need.”
“Many of these former directors are likely to be elderly and will be just as distressed as my former director was."
An ACNC spokesperson told the Community Advocate it would be best to seek comment from the Australian Taxation Office (ATO) in relation to the ABRS director ID program.
An ATO spokesperson said the office aims to support and assist all directors in obtaining their director ID.
“Generally, we aim not to pursue directors who have resigned. We would be happy to take the details of specific clients affected so that we can support them and identify any appropriate improvements to our processes.”
The ATO said directors of companies are required to obtain a director ID, and this includes directors of companies that are charities.
“The vast bulk of directors that were appointed prior to the regime starting were required to apply for a director ID by 30 November 2022.
“Newly appointed directors now need to apply prior to appointment. ABRS is making contact with directors who have not yet applied.”
The ATO said any client who is are no longer a director of a company that is also registered as a charity should contact the ACNC to request the necessary updates be made to the Charities Register.
“We are strengthening training and processes for our staff to support directors and former directors of companies that are charities in relation to director ID requirements.
"Whilst we aren’t aware of a circumstance where our staff have given incorrect information to former directors about their obligations, we are always interested in any information or intelligence that indicates where we may have areas for improvement."
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