AGM 2011 - now Wed Dec 21st not Dec 14th

[Penelope]

There does however seem to be some contradiction to this in that section 13(g) says that the members have the right to "vote to disqualify a director" with the ability to vote "to appoint another person to the office of director".   

Is it a contradiction, or actually a safety net, that ultimately gives the members a  way of removing an appointed director and replacing them with an elected person, if their performance deems it necessary?

[RedanTiger]

Somehow I knew you'd jump on that.

Funny how you seemed to ignore Hernaman's statement that none of the top ASX 200 have the ability to appoint directors without being subject to re-election by shareholders though.

[mightytiges]

It seems there is growing strong opposition to this proposal which is good to see.

While true most of us al wouldn't know any more than any other average member, it's a bit hard to find fault with the average member given before the 2004 full board election we hadn't had any Board elections for years........

By the way the Club has sent out a Explanatory Memorandum with all the detailed constitutional changes. In the constitution it says there needs to be 100 members at the AGM to form a quorum.

(quote shortened for convenience only)

I wasn't necessarily saying that the members were to blame for those f ups, just that that past performance is hardly an argument that members know who is the best person for the club, but i do take the points you raise.

It's a delicate situation and obviously an important one. As it is now many of the important decision makers within the club are appointed and the members have no direct say on their appointment or dismissal, but the issue here for most does seem to be not so much the appointment but rather the ability to give them the flick and perhaps there does need to be some mechanism put in place?

People who feel strongly about this, and have put some thought into it, should  attend the AGM and raise their concerns in a civil and logical manner at the AGM.

Can amendments to proposals be submitted from the floor?

The club has claimed that this is best practice in the corporate world. Does anyone know how well it works and what in general has been the response of shareholders when similar proposals have been made in publicly listed companies?

That's right al. It's about accountability of the Board and having a mechanism where members have their vote to enforce that accountability.

I'm not sure how amendments to prosposals are dealt with at AGMs. Do they class amendments as part of the proposal that has been already advertised prior to the AGM so they can be dealt with then and there or are amendments seen as new business which needs 14 days notice?

6.1.2
The business to be dealt with at such Meetings shall be the reception and consideration of the Board's Report and Balance Sheet and Statements of Receipts and Expenditure, the election of members of the Board in place of those who retire by rotation or otherwise, the presentation of testimonials, and the consideration of any business of which notice has been given by advertisement as aforesaid or of which fourteen days' notice has been given in writing to the Secretary signed by any ten registered members.

[Penelope]

Somehow I knew you'd jump on that.

Funny how you seemed to ignore Hernaman's statement that none of the top ASX 200 have the ability to appoint directors without being subject to re-election by shareholders though.

i wasnt "jumping" on anything Redan Tiger, nor did i ignore what Hernaman said.
I simply thought it was a legitimate question, because the main concern seems to be that directors can appoint their cronies and thus control the board and there fore the club, bypassing or overriding the members.

From what you posted it seems there is a mechanism in place for to allow the members to prevent this, that ultimately they can step in if it looks like this is happening.

It's a simple question, not a slag off, not a personal disagreement nor a slur on you.

Yet you don't want to answer and get all defensive?

Where do I find the clause you quoted so i can have a look for myself if you aren't interested in getting to the bottom it?

[mightytiges]

Where do I find the clause you quoted so i can have a look for myself if you aren't interested in getting to the bottom it?

Here it is al. 

13.   DISQUALIFICATION OF DIRECTORS

The office of director shall be vacated:

(a)   If he becomes bankrupt.
(b)   If he be declared lunatic or be confined in a lunatic asylum or in gaol as a lunatic.
(c)   If he be convicted of any felony or misdemeanour.
(d)   If he becomes from any cause incapable of attending to his duties.
(e)   If he commits any act in breach of any of this Constitution or the by-laws of the Club rendering his membership liable to forfeiture or suspension.
(f)   If he shall be absent from three consecutive Board meetings without the consent of the Board.
(g)   If the members by Ordinary Resolution at either an Annual General Meeting or Extraordinary General Meeting vote to disqualify a director, even though director's term has not expired.  The members may then at any such meeting vote to appoint another person to the office of director.

[RedanTiger]

I simply thought it was a legitimate question, because the main concern seems to be that directors can appoint their cronies and thus control the board and there fore the club, bypassing or overriding the members.

From what you posted it seems there is a mechanism in place for to allow the members to prevent this, that ultimately they can step in if it looks like this is happening.

Yet you don't want to answer and get all defensive?

Where do I find the clause you quoted so i can have a look for myself if you aren't interested in getting to the bottom it?

As said in my original post it is section 13(g) and MT has quoted it.
The mechanism does NOT prevent cronies being appointed as you suggest.
Members can only act AFTER appointment and AFTER a resolution is put at an AGM or EGM.

As far as your question is concerned, how would I know what the purpose of that clause is since I didn't draft it or vote for it.
Perhaps you could ask the question of the Chair of the AGM since he is the one requesting alterations to the constitution.   

[Penelope]

cheers MT.

So it seems there is a safety net that ultimately makes ALL directors accountable to the members.

[10 FLAGS]

On what terms does a board have the right to rescind the right of membership from any member? For example if someone disagrees with the board or runs a campaign against them for election does the board have the right to rescind that persons membership under the rules of the new constitution?

[RedanTiger]

al, I have a suspicion that the section regarding the removal of directors may be a legal requirement under companies law in Australia. Someone more aware of these laws may be able to help.

Flags, the part of the Constitution that relates to this is section 16 - which allows the for the CEO to report any member to the board and the board may expell the member. The section probably most pertinent to your question is the bit about "unbecoming or dishonourable conduct, or conduct prejudicial to the good order and discipline of the Club" being grounds for the start of the process.

Also relevant is sections 3.2.2 - which allows the board to refuse any application for Ordinary Membership.

EDIT: There is no change to these sections in the Constitution beyond "housekeeping" of language and IMO neither should there be.
It is only in the interpretation of section 16 where there may be problems and it's a pretty open process where the written notice to the member must "set out in substance the infringement or complaint".   

[mightytiges]

This is what I found in the Corporations Act:

http://www.comlaw.gov.au/Details/C2011C00910/Html/Volume_1#_Toc297551277

Part 2D.3—Appointment, remuneration and cessation of appointment of directors

Division 1—Appointment of directors

Subdivision A—General rules

201A  Minimum number of directors

Proprietary companies

             (1)  A proprietary company must have at least 1 director. That director must ordinarily reside in Australia.

Public companies

             (2)  A public company must have at least 3 directors (not counting alternate directors). At least 2 directors must ordinarily reside in Australia.

201B  Who can be a director

             (1)  Only an individual who is at least 18 may be appointed as a director of a company.

             (2)  A person who is disqualified from managing corporations under Part 2D.6 may only be appointed as director of a company if the appointment is made with permission granted by ASIC under section 206F or leave granted by the Court under section 206G.

201D  Consent to act as director

             (1)  A company contravenes this subsection if a person does not give the company a signed consent to act as a director of the company before being appointed.

             (2)  The company must keep the consent.

             (3)  An offence based on subsection (1) or (2) is an offence of strict liability.

Note:          For strict liability, see section 6.1 of the Criminal Code.

201E  Special rules for the appointment of public company directors

             (1)  A resolution passed at a general meeting of a public company appointing or confirming the appointment of 2 or more directors is void unless:

                     (a)  the meeting has resolved that the appointments or confirmations may be voted on together; and

                     (b)  no votes were cast against the resolution.

             (2)  This section does not affect:

                     (a)  a resolution to appoint directors by an amendment to the company’s constitution (if any); or

                     (b)  a ballot or poll to elect 2 or more directors if the ballot or poll does not require members voting for 1 candidate to vote for another candidate.

             (3)  For the purposes of paragraph (2)(b), a ballot or poll does not require a member to vote for a candidate merely because the member is required to express a preference among individual candidates in order to cast a valid vote.


201G  Company may appoint a director (replaceable rule—see section 135)

                   A company may appoint a person as a director by resolution passed in general meeting.

201H  Directors may appoint other directors (replaceable rule—see section 135)

Appointment by other directors

             (1)  The directors of a company may appoint a person as a director. A person can be appointed as a director in order to make up a quorum for a directors’ meeting even if the total number of directors of the company is not enough to make up that quorum.

Proprietary company—confirmation by meeting within 2 months

             (2)  If a person is appointed under this section as a director of a proprietary company, the company must confirm the appointment by resolution within 2 months after the appointment is made. If the appointment is not confirmed, the person ceases to be a director of the company at the end of those 2 months.

Public company—confirmation by next AGM

             (3)  If a person is appointed by the other directors as a director of a public company, the company must confirm the appointment by resolution at the company’s next AGM. If the appointment is not confirmed, the person ceases to be a director of the company at the end of the AGM.

201J  Appointment of managing directors (replaceable rule—see section 135)

                   The directors of a company may appoint 1 or more of themselves to the office of managing director of the company for the period, and on the terms (including as to remuneration), as the directors see fit.

201K  Alternate directors (replaceable rule—see section 135)

             (1)  With the other directors’ approval, a director may appoint an alternate to exercise some or all of the director’s powers for a specified period.

             (2)  If the appointing director requests the company to give the alternate notice of directors’ meetings, the company must do so.

             (3)  When an alternate exercises the director’s powers, the exercise of the powers is just as effective as if the powers were exercised by the director.

             (4)  The appointing director may terminate the alternate’s appointment at any time.

             (5)  An appointment or its termination must be in writing. A copy must be given to the company.

Note:          ASIC must be given notice of the appointment and termination of appointment of an alternate (see subsections 205B(2) and (5)).

201L  Signpost—ASIC to be notified of appointment

                   Under section 205B, a company must notify ASIC within 28 days if a person is appointed as a director or as an alternate director.

201M  Effectiveness of acts by directors

             (1)  An act done by a director is effective even if their appointment, or the continuance of their appointment, is invalid because the company or director did not comply with the company’s constitution (if any) or any provision of this Act.

             (2)  Subsection (1) does not deal with the question whether an effective act by a director:

                     (a)  binds the company in its dealings with other people; or

                     (b)  makes the company liable to another person.

Note:          The kinds of acts that this section validates are those that are only legally effective if the person doing them is a director (for example, calling a meeting of the company’s members or signing a document to be lodged with ASIC or minutes of a meeting). Sections 128‑130 contain rules about the assumptions people are entitled to make when dealing with a company and its officers.



Division 3—Resignation, retirement or removal of directors

203A  Director may resign by giving written notice to company (replaceable rule—see section 135)

                   A director of a company may resign as a director of the company by giving a written notice of resignation to the company at its registered office.

203B  Signpost to consequences of disqualification from managing corporations

                   A person ceases to be a director of a company if the person becomes disqualified from managing corporations under Part 2D.6 (see subsection 206A(2)) unless ASIC or the Court allows them to manage the company (see sections 206F and 206G).

203C  Removal by members—proprietary companies (replaceable rule—see section 135)

                   A proprietary company:

                     (a)  may by resolution remove a director from office; and

                     (b)  may by resolution appoint another person as a director instead.

203D  Removal by members—public companies

Resolution for removal of director

             (1)  A public company may by resolution remove a director from office despite anything in:

                     (a)  the company’s constitution (if any); or

                     (b)  an agreement between the company and the director; or

                     (c)  an agreement between any or all members of the company and the director.

If the director was appointed to represent the interests of particular shareholders or debenture holders, the resolution to remove the director does not take effect until a replacement to represent their interests has been appointed.

Note:          See sections 249C to 249G for the rules on who may call meetings, sections 249H to 249M on how to call meetings and sections 249N to 249Q for rules on members’ resolutions.

Notice of intention to move resolution for removal of director

             (2)  Notice of intention to move the resolution must be given to the company at least 2 months before the meeting is to be held. However, if the company calls a meeting after the notice of intention is given under this subsection, the meeting may pass the resolution even though the meeting is held less than 2 months after the notice of intention is given.

Note:          Short notice of the meeting cannot be given for this resolution (see subsection 249H(3)).

Director to be informed

             (3)  The company must give the director a copy of the notice as soon as practicable after it is received.

Director’s right to put case to members

             (4)  The director is entitled to put their case to members by:

                     (a)  giving the company a written statement for circulation to members (see subsections (5) and (6)); and

                     (b)  speaking to the motion at the meeting (whether or not the director is a member of the company).

             (5)  The written statement is to be circulated by the company to members by:

                     (a)  sending a copy to everyone to whom notice of the meeting is sent if there is time to do so; or

                     (b)  if there is not time to comply with paragraph (a)—having the statement distributed to members attending the meeting and read out at the meeting before the resolution is voted on.

             (6)  The director’s statement does not have to be circulated to members if it is more than 1,000 words long or defamatory.

Time of retirement

             (7)  If a person is appointed to replace a director removed under this section, the time at which:

                     (a)  the replacement director; or

                     (b)  any other director;

is to retire is to be worked out as if the replacement director had become director on the day on which the replaced director was last appointed a director.

Strict liability offences

             (8 )  An offence based on subsection (3) or (5) is an offence of strict liability.

Note:          For strict liability, see section 6.1 of the Criminal Code.

203E  Director cannot be removed by other directors—public companies

                   A resolution, request or notice of any or all of the directors of a public company is void to the extent that it purports to:

                     (a)  remove a director from their office; or

                     (b)  require a director to vacate their office.

203F  Termination of appointment of managing director (replaceable rule—see section 135)

             (1)  A person ceases to be managing director if they cease to be a director.

             (2)  The directors may revoke or vary an appointment of a managing director.

 

[Penelope]

Ef, there is some hard reading in there.

From reading that, if this proposal goes through, any person appointed to the postion must still gain approval from the members by a vote.

Public company—confirmation by next AGM

             (3)  If a person is appointed by the other directors as a director of a public company, the company must confirm the appointment by resolution at the company’s next AGM. If the appointment is not confirmed, the person ceases to be a director of the company at the end of the AGM.

So this must have happened with the 2 current board appointed dirctors?

Also, the members can eff off any director by a members vote and that right is set in stone by law.

203D  Removal by members—public companies

Resolution for removal of director

             (1)  A public company may by resolution remove a director from office despite anything in:

                     (a)  the company’s constitution (if any); or

                     (b)  an agreement between the company and the director; or

                     (c)  an agreement between any or all members of the company and the director.

[RedanTiger]

Agreed that it's hard going.
At the AGM before the vote the question really needs to be asked whether the Appointed Director has to be confirmed by the following AGM.
Perhaps the new Constitution allows the clause to be overridden as in section 201E.2(a) of MT's post.

From reading that, if this proposal goes through, any person appointed to the postion must still gain approval from the members by a vote.

Public company—confirmation by next AGM

             (3)  If a person is appointed by the other directors as a director of a public company, the company must confirm the appointment by resolution at the company’s next AGM. If the appointment is not confirmed, the person ceases to be a director of the company at the end of the AGM.

So this must have happened with the 2 current board appointed dirctors?

No.
The two new directors (Walsh and Speed) were appointed to take over the duties of vacating directors (Cameron and Lord) in October until their re-election in November.
Since there were no other candidates, due to the Nominations Committee, these two (and Free) were the only candidates for three vacant positions and they were deemed to be elected.

I also just saw that the Executive Director can be appointed at any time and for any term (8.1.24)

[Penelope]

From reading that, if this proposal goes through, any person appointed to the postion must still gain approval from the members by a vote.

Public company—confirmation by next AGM

             (3)  If a person is appointed by the other directors as a director of a public company, the company must confirm the appointment by resolution at the company’s next AGM. If the appointment is not confirmed, the person ceases to be a director of the company at the end of the AGM.

So this must have happened with the 2 current board appointed dirctors?

No.
The two new directors (Walsh and Speed) were appointed to take over the duties of vacating directors (Cameron and Lord) in October until their re-election in November.
Since there were no other candidates, due to the Nominations Committee, these two (and Free) were the only candidates for three vacant positions and they were deemed to be elected.

For some reason I had it in my head we already had two board appointed directors and this was extending it to three, but these two are regarded as elected.

got me buggered where i got that idea from.

As they are deemed to be elected, unnoposed,, then

[WilliamPowell]

No.
The two new directors (Walsh and Speed) were appointed to take over the duties of vacating directors (Cameron and Lord) in October until their re-election in November.
Since there were no other candidates, due to the Nominations Committee, these two (and Free) were the only candidates for three vacant positions and they were deemed to be elected.

I also just saw that the Executive Director can be appointed at any time and for any term (8.1.24)

Redan, Dont 'quite agree with your assertion that there were no other candidates due to the Nominations Committee, granted they are interviewing candidates and explaining what is involved and then supposedly recommending who they believe to be the best candidate I don't believe they are in a position to actually stop someone from nominating under the consititution.

[Penelope]

No, but if most of us wanted to run they would tell us we would be better off not wasting everyone's time.