The Brisbane charity Street Swags and its CEO founder received national media attention on the release of a Fair Work Commission decision about whether there were grounds for immediate dismissal of the CEO by the charity.

This 237 page judgment has no novel or remarkable legal issues, but it is a sobering read for those involved with the governance of non-profit and charitable organisations. We have the luxury of hindsight, but some of the warning signs were very clear:

Turnover of Officers

Evidence was presented that since the incorporation of Street Swags Limited, 17 Directors and 5 Company Secretaries had resigned, which represented one resignation every five months (on average). All the Directors were highly qualified professionals that were capable of making significant contributions to the progress and development of Street Swags.

Failure to take legal advice

The CEO failed to take heed of sensible, correct, firm legal advice given on a pro bono basis by one of the largest law firms in the country. The CEO also did everything in her power to ensure the board would not speak with the lawyers, lest the board discover their legitimate concerns relevant to the projects.

Personal conflicts of interest

The Commission found that the CEO was, blinded by love, trying to do whatever she could to satisfy her dissatisfied and frustrated boyfriend who had been sold a commercial promise that could never be fulfilled.  The CEO executed a contract without the authority of the Board with her partner.

Summary

The role played by the board and particularly the chair is critical in the governance of a rapidly growing association that have a founder/CEO.

Ms Jean Madden v Street Swags Ltd [2021] FWC 160 available at http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/FWC//2021/160.html

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