Acing Club Governance

As part of these requirements, all clubs have obligations under the Registered Clubs Act 1976 and Registered Club Regulation 2015, which includes the Registered Club Accountability Code (the Accountability Code). 

As a key priority for Liquor & Gaming NSW (L&GNSW) for 2024-26, it is important clubs are aware of and meet their governance obligations. The Independent Liquor & Gaming Authority (ILGA) has the power to impose monetary penalties of up to $11,000 and take disciplinary action against individual club directors and secretaries who breach club governance and management requirements. 

The key governance requirements are explained below. 

1. Employment contracts for top executives

Under the Accountability Code, a top executive’s employment contract must be in writing and reviewed by an independent and qualified adviser (this can be a person or body that is suitably qualified) before being approved by the Board of Directors. A top executive includes:

• the club secretary;
• a manager of the club;
• any employee of the club who is nominated by the club as a top executive; or
• any employee of the club (unless otherwise nominated) who is one of the five (5) highest-paid employees of the club, and whose remuneration package exceeds the high-income threshold set by the Fair Work Commission and who is involved in the general administration of the club or with its liquor and gaming operations.

It is important to note that the club’s human resources personnel are not considered independent advisors, however clubs can use a model contract that has been reviewed by an independent and qualified advisor. 

2. Disclosure of interests by club directors, top executives and employees

Clubs must keep a register in the form approved by the Secretary of the Department, containing the details of disclosures of interests by club directors, top executives and employees. This register is available within the accountability disclosure register provided by Liquor & Gaming NSW, which is available here. 

These interests include personal or financial interests relating to club affairs, major capital works, procurement of goods/services or hotels within 40 km of the club and gifts or remuneration received from certain persons/bodies valued at $1,000 or more. 

All relevant individuals have a responsibility to disclose their interests. Clubs must also have a clear process in place to ensure that any disclosures occur within 21 days of the person becoming aware of they have a disclosure requirement.

3. Entering into contracts

Clubs must make reasonable inquiries before entering into contracts to ensure they do not enter into contracts with particular individuals including:  

• The club secretary, a manager, or a close relative of the club secretary or manager;
• A company or body in which the secretary, a manager, or a close relative of the secretary or manager, has a controlling interest; or 
• A director or top executive of the club, or with a company in which a director or top executive has a pecuniary interest, unless it’s first approved by the club’s board.

A contract resulting from an open tender process and contracts of employment are exempt from these restrictions. 

A club can rely on a statutory declaration from the relevant persons to satisfy the ‘reasonable inquiries’ that are to be undertaken by a club before entering into a contract.   

4. Management contracts

A management contract is a contract that enables a person who is not a club director, secretary, manager or employee to have management functions at the club. 

Where a club is looking to use a management contract it must be considered whether using this is in the members' best interests. 

If a club decides to implement a management contract, they must not enter into it unless members have been notified and L&GNSW have been provided a report at least one month prior to the commencement of the contract. 

L&GNSW have a guideline specifically on management contracts, available here. 

5. Employment of close relatives

Under the Accountability Code, a close relative of a person includes a parent, child, brother, sister, spouse, de facto partner of the person, or the spouse or de factor partner of the person’s parent, child, brother or sister.

The Club has a responsibility to make all reasonable inquiries (for example, through a statutory declaration) to determine whether potential employees are defined as close relatives under the Accountability Code. 

Where a potential employee is considered a ‘close relative’, the club’s board must approve the employment. If a director has a conflict of interest with the proposed employee, they must exclude themselves from the discussion and participate in the voting in the motion in relation to the employment of the close relative. 

6. Providing information to members 

Clubs must:

• Make information related to the management and financial administration of the club available to their members and an appropriate notice must be displayed on the premises and website of the club (if any is available). 
• Make this information available to members within four months at the end of their financial year. A full list of information that must be made available can be found here. 
• Ensure this information is kept up to date to ensure they are being transparent to their members and can provide this information to them at their request. L&GNSW also have an accountability register that clubs should utilise, which is available here.
• Prepare quarterly financial statements made up of a club’s profit and loss accounts and trading accounts for the quarter, as well as a balance sheet at the end of the quarter. These must be adopted by the Board and made available to members within seven days of being adopted.

If you need further assistance, Liquor & Gaming NSW have a registered clubs' accountability guideline, available here. ClubsNSW is also available to answer any questions.