The Best Interests Duty and Corporate Charities — The Pursuit of Purpose

(2021) 15 Journal of Equity 92

31 Pages Posted: 22 Jul 2021

See all articles by Ian Murray

Ian Murray

The University of Western Australia Law School

Rosemary Teele Langford

University of Melbourne - Law School

Date Written: June 1, 2021

Abstract

Most Australian charities are incorporated. Yet most directors, legal advisers and commentators are hard pressed to articulate a fairly fundamental obligation of charity directors: to act in good faith in the best interests of their corporation. At a time when shareholder primacy is being increasingly questioned for for-profit corporations and consideration of stakeholders or purposes is being written into corporations legislation in other jurisdictions, there is even greater need to think about what interests ought to be considered by charity directors. We argue that to act in the best interests of an incorporated charity means to act in a way that the directors genuinely believe will advance its purposes. As this is still a fairly amorphous standard, we suggest that it can be given content by means of directors’ obligations to give genuine consideration in the exercise of their powers in seeking to advance the corporation’s purposes.

Keywords: charity law, charities, best interests, purpose, duties, fiduciary

Suggested Citation

Murray, Ian and Langford, Rosemary Teele, The Best Interests Duty and Corporate Charities — The Pursuit of Purpose (June 1, 2021). (2021) 15 Journal of Equity 92 , Available at SSRN: https://ssrn.com/abstract=3889104

Ian Murray (Contact Author)

The University of Western Australia Law School ( email )

M253
35 Stirling Highway
Crawley, Western Australia 6009
Australia

Rosemary Teele Langford

University of Melbourne - Law School ( email )

University Square
185 Pelham Street, Carlton
Victoria, Victoria 3010
Australia

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