This is based on an article I posted a few hours ago on PRE. I reproduce it here so as to raise awareness of the issue (I will confess to having lurked in these parts from time to time).
I have been through the proposed amendments carefully and strongly urge you to put in your proxy and vote against them. Apologies for the length of this post but this is an important issue that I feel is worthy of proper analysis. It’s easy to sit and take pot shots so I also think it’s fair enough that if I raise objections I should state why.
I do not object to the club having the right to appoint suitably qualified candidates to the board. I do however object to (A) those appointees not being answerable to members; and (B) by virtue of the definition of a quorum, a board decision could be made despite more than half of member elected directors voting against the decision. Used cynically, an unsuccessful or unpopular board could use these changes to entrench themselves.
The substance of the change is that in a few years the board would be made up of 6 elected directors, 3 appointed directors and the CEO or other executive of the club appointed by the board. The appointed directors do not face election and can be appointed for up to 2 consecutive terms of 3 years.
I question why any potential appointee should not be answerable to members:
1. We quite rightly expect our directors to work hard in the best interests of the club and members. In some respects it is a thankless task. How can an appointee be expected to have the drive to do so with the necessary commitment and passion if they are unwilling to subject themselves to re-election? This should not be made a role for those looking to bolster a CV or get up the pecking order at his chap's club of choice.
2. Members are the lifeblood of this club. Every time the club gets in strife we, the members and supporters, bail it out. Consider Save our Skins, our staggering membership and the FTF. We are not a club of the well to do. Our strength comes from the loyal support of the rank and file. We answer the call to arms every time an administration fails. At a time when the club continues to ask us to give more on the one hand it is not in my view justified in asking us to sacrifice an element of our democracy on the other.
3. Nor is the sacrifice of democracy justified in terms of board performance to date. Yes, the last few years have seen great improvement in a great many aspects of the club. In that respect I applaud the board and executive. However, we know all too well about false dawns. It is important to remember that a number of the current directors were part of the Casey administrations. I don’t say that to be personal, quite the contrary. This should not be a decision based on personalities or whether you trust the current board. Remember you are being asked to implement a change which will last well beyond the here and now.
4. On that I implore you to think about whether this arrangement would be acceptable if, in 3 years from now the CEO left, we had still failed to make the 8 and had not been able to retire the debt? I hope with all my heart this will never happen but raise it to make the point that in analysing the changes, please do not agree to them because you trust Gary, Brendan and Damien or are pleased with current progress. This change will be very hard to undo.
5. The club materials suggest that most clubs have the power to appoint directors. That is not completely true. Some clubs do not have that power at all. Of those that do, many such as in Hawthorn’s case require the appointed director to face re-election at the next AGM. This is a model I would be happy with. For your background the model proposed by the club mirrors Essendon’s constitution.
6. The club materials suggest these changes are consistent with modern corporate governance. This is untrue. No company in the ASX20 has the capacity to appoint directors without them being subject to re-election by shareholders. I would prefer my directors to be subject to the standards of the Commonwealth Bank or BHP, not the the Essendon Football Club.
7. The club has said that it wants to implement these changes so as to attract the necessary expertise to take the club forward. To some extent this is what the nominations committee is for but in any event nothing in the constitution as it stands today prevents the board from obtaining the external expertise it needs. For example, it could tomorrow appoint Mick Malthouse or Leigh Matthews or in the future a retired Brian Cook or Neil Balme as a special advisor or consultant to the board on a voluntary or paid basis. The only difference is that to have a vote, you need to be elected.
8. The introduction of the nominations committee is a good idea; if it does its job it will find suitably qualified candidates and give underperforming directors the nudge they need. While the nominations committee does not interfere with the normal (pre-amendment) democratic process it probably does make it harder for we ordinary folk to put up our hands if we are so inclined. One danger of the amendments is that it really does take the board to being a closed shop.
9. Please don’t disempower yourself because members have in the past perhaps made bad decisions about who they have voted for. That’s what democracy and participation is all about. It’s not always the case that those in charge know better than you. I guarantee you there will be cases over the years where your motivations regarding the club and its welfare are purer than those of some directors.
10. Please don’t vote in favour of this for fear you will be rocking the boat or disrupting the club’s current progress (which is pleasing). A “no” vote will have no real bearing on the club other than maybe scaring off a candidate or 2 who don’t want to have to ask you for their vote, and in doing so justify why they are a suitable candidate, in a year’s time.
As a separate point the changes give the board the ability to appoint an executive to the board. I question why this provision is broader than the CEO. Why for example should a board be able to appoint, for example, the head of football or even a player to the board? This capacity could be used cynically to unfairly skew elections and the public perception of board matters. The Greg Miller case in my view should have taught us that directors should not be able to use executive staff in matters of boards, governance and elections.
I welcome your views, be they for or against. Please vote by attending the AGM or sending in your proxy form to the club not less than 24 hours before the meeting. The resolution needs a 75% resolution so either way have your say and make your vote count.
