New Zealand Amateur Sport Association emphasises that community clubs are not companies

The New Zealand Amateur Sport Association (NZASA) has expressed its concerns about the impact of the Incorporated Societies Act 2022 and the Incorporated Society Regulations 2023 on community sport.

Concerned that the Act and Regulations place new obligations on volunteers equivalent to those placed on directors of public companies, it cites how, under section 47 of the new Act, those who volunteer to undertake statutory governance roles with a local incorporated sports club are required to make an equivalent declaration as would be made by the director of a public company.

NZASA notes that New Zealand’s Minister for Commerce and Consumer Affairs has recently announced moves to encourage more New Zealanders to step forward to undertake governance roles for publicly listed companies by proposing to lift some of the regulatory burden associated with being a company director, noting that “company directors are a crucial part of the puzzle when it comes to growing the economy and creating wealth for New Zealanders.”

However, Association point out that for community sport volunteers, the opposite is happening, with the new Incorporated Societies legislation and regulations acting as a disincentive to many who would otherwise support the governance of their local sport club.

NZASA highlights that “club volunteers are crucial for growing our national physical and social well-being.”

Based on preliminary data from its 2024 National Sport Club Survey, it is estimated that thousands of incorporated community sport organisations will not re-register under the new Act, with less than half of survey respondents agreeing with the statement that “overall, the legal and compliance framework for incorporated community sport organisations is “fit for purpose”, (i.e., straightforward and easy to comply with)”.

Of those who are considering re-registering, only 4% say they know what to do.

NZASA goes on to say that “while the Minister is seeking to support the future state of capital markets, the Association’s fear of an extinction event for incorporated community sport organisations grows by the day.

“We encourage the Minister to support the Association’s call for a review of the regulatory obligations impacting our community sport volunteers.”