Draft Constitution?

[pmccarthy]

In defence of the process being followed, it is usual to put out a version for feedback, then remind people several times and gather as much feedback as possible, then put out a final version. To put out several versions progressively based on feedback would lead to total confusion. I'm sure the feedback given, right from the first day, has been recorded and considered and incorporated into the version that we will see to vote on.

 

 

[01rmb]

Why does Recreational Aviation Australia not participate in an online forum to openly discuss ideas and issues? At the general meeting in Bundaberg I asked why the new web site did not accommodate a forum or use an existing forum for the RAA board and administration to participate in discussing issues with members. There was no interest. Occasionally this forum is frequented by the odd board member and sometimes they communicate what is happening within RAA although they regularly point out they aren't speaking for the board (although the position they would take is obvious when they sit in a board meeting). Sure, not all RAA members are on this forum but set up an official RAA section here and linked to the new web site will allow better consultation and interaction with the membership than without one.

 

RAA is going through the biggest change in many years with the development of a new constitution and the CEO and board are relying on email (an occasional fly in and a badly proofed draft) to consult with members. They are trying to convince members to that they should support it but any suggestions need to be forwarded to the CEO with no ability for open discussion. The ability to openly discuss points of view or the formal position of the board and administration and the feeling and sentiment of members would greatly benefit understanding of what is happening across the wide membership base far better than a simple email or turning up to a fly in. Especially considering the new constitution is advocating for the removal of regional board representation.

 

Why not use the technology available for consultation of RAA with members? It is great that the occasional board member does openly participate in this forum but it should be far more formalised with an official position taken.

 

 

[rhysmcc]

Bite sized pieces. Not everyone of our 10,000 members are as tuned in or as interested as you are . If it was all dumped in one go most would drown under the volume and it would all get the tldr (too long didn't read) response and be counter-productive.

Splitting up the constitution into bite size pieces make sense, so why not at the end of each "piece" include a short survey asking the members what options they consider important for them and their association. An example could be regional vs national representation.

 

Members have been given the opportunity to voice opposition and none that I am aware of has been voiced to RAAus.

I find this impossible, from reading this forum as well as my own emails, I know of at least 5 members who have voiced opposition to the constitution in it's current form. Another reason why "emailing the CEO" isn't the best way for the Board to represent the members. Section 14B (iii) provides the perfect avenue for the Board to canvas the opinion of the membership on matter of policy (which is what this draft is).

 

They were advertised well in advance and typically, very informal gatherings, sitting around in a tent where ordinary members could feel comfortable asking questions and expressing views. No secretarial staff were present and they were not held as formal meetings. I flew at my own cost to Evans Head and attended the meeting there with Mick Monck and Michael Linke - it went very well.

That's great, I was at Evans Heads but sadly had to drive back to Brisbane before the meeting. I did watch the video of an informal meeting following last years AGM, some useful information shame such recordings haven't been made from other meetings.

How many of our 10,000 odd members have been represented at these meetings, or was it so informal a check of membership wasn't recorded?

 

I guess the Board takes the view that they were elected by the members to do a job and they are getting on with it. The draft has been and is being put to the members with explanations and opportunities for comments and questions. I think you may be overstating the interest of members other than yourself and a few on here to make an unsupported contribution. Consider the typical "turnout" at elections for the Board. I believe the vast majority of members want their Board to work this way - they look to the Board for leadership.

Costs nothing (minimal) to ask the membership via electronic survey. But hey, you've been elected to the board so I guess that means your opinion now represents the membership.

 

I must be missing something. Where in the draft constitution does it say "removal of elected board members in favor of appointed board"? As far as I can see only the Members can remove a Director.

You're correct, that was my mistake. It was on a previous draft constitution and I didn't notice the change on the latest release. I'm happy to own the mistake although it's hard to notice the revisions when no change bars or version numbers are listed.

 

 

[kasper]

OK Don and co ...

 

Overall its still a very poorly drafted document - it looks like it has 'customised' from a template by a junior who really did not read it. eg under 57 notice to members from the company can be given in writing or by electronic means if the member agrees ... yet at several points in clauses they have included specific reference to electronic communications .... when you read the document from the top you get very concerned that we must do everything in writing except where otherwise allowed ... the draft looks like a patched up old document and it absolutely should not.

 

Specifics:

 

Cl65 - definition of initial member - How are RAAus intending to demonstrate the consent of an exisiting member to become a member of the company? it can't be inferred so when will we see written consent requests and what is the RAAus board plans for the inevitable situation where either the consent is not given or is not received by the change over date?

 

Cl10 - membership register - any break in membership (even a day) makes a new second membership a requirement (including a duplication of the member guarrantee under Cl4) how is this going to work with the existing member numbers? currently a 'member' number is for life ... under the requirement to maintain seperate records of memberships for the past 7 years how will the RAA admin system deal with this?

 

Cl11.1 - reference to purposes of the company ... in other clauses these purposes are specifically referenced back to Cl6 yet here they are not ... it would be better to be consistent throughout the document and I suggest that purposes as set out in Cl 6 would be better used throughout

 

Cl12.1 - classes of membership - can the Board please set out what they intend to use this for. It might be by pilot certificate class, might be by company vs individual - without a guide by the Board we cannot appreciate why this is needed and intended to be used Cl 12.2 is written to indicate that classes attache to/align to pilots certificates but its not clear.

 

Cl13 - applications to be members must be in writing - using cl57 extends that definition to be email or other electronic means so online application is OK ... but telephone would not ... being 1 day late on ANY payment to the company ceases your membership so calling the office to pay and 'renew' will no longer be possible - how are RAAus going to deal with this?

 

Cl14.2 © Allows delegation of Board powers to the CEO ... not to other employees so thats going to be fun ... no allowing other employees to undertake anything the directors have to and no ability to delegate to others from CEO when he/she is on leave or unavailable.

 

Cl14.4 deals with a 30 day review period on membership after entry onto the register ... sorry guys but a person is a member from the time they are entered onto the register ... cl15 ... so having a second bite of the cherry to remove them after entry opens up lots of issues ... does the fact they are a member on day 1 and cancelled on day 29 mean that they are still under the member guarantee of Cl4 for the next year? by cancelling the membership you are NOT covered by the no reasons section covered in refusal to grant membership in 14.3 so as a decision it might require reasons to be given because you are cancelling membership and we are getting into slippery items that end up with court actions reviewing reasons

 

Cl14.5 seems to cover the RAAus ar$e when they cancel the membership entry under 14.4 by saying they are 'considered to be members' for the time they were on the register ... trying to cover this area in this manner is clumsy but if you are going to retrospectively remove membership we have to have this crap or suddenly any use of thet amembership to support a pilots certificate use would render then after the fact illegal wouldn't it? Not a good thing to have this retrospective 30 day removal of membership - much better to just run the disciplinary and expulsion process.

 

Cl14.6 is trying to imply agreement to the purposes of the company to any member who fails to provide it in writing - ridiculous! this is in fact trying to resurrect failed to comply applications to membership! either you HAVE to agree to the purposes and if thats in writing then that applies to everyone or abandon it as a concept but for goodness sake do not try to write back door processes to deal with potential failings in admin processes.

 

Cl16(d) this is the biggest kicker in the whole constitution - the failure to pay to the company ANY amount immediately ceases your membership. If this is passed in this form 1 day late on payment of your membership and you are immediately not a member ... and if you are a director you immediately and irrevocably cease being a director. Now for your membership annual fee that might seem logical ... but it ANY money owed to the company ... hows that gonna work with aircraft renewals? fail to renew and you have failed to pay money owed ... suddenly you have a second trigger to lose membership ... or are we going to change ALL renewals of aircraft to be not automatic (they currently come through as invoices with due dates) ... and how are we going to recognise that an aircraft can go out of registration currency by choise of owner for a time ... are we going to be requried to positively advise a decision to not reregister or face losing our membership and ability to fly??? big mess this one and IT HAS BEEN WITH THE CEO AS A SPECIFIC PROBLEM FROM MONTHS UNADDRESSED

 

Cl34.6 refers to Cl35.3 ... which unfortunately does not exist ... I think it should refer to 34.3

 

Cl36.1 refers to Cl35.6 ... which unfortunately does not exist ... I think it should refer to 34.6

 

Cl36.4 refers to Cl 35.6 ... which unfortunately does not exist ... I think it should refer to 34.6

 

36.7 restricts directors to 3 x 3yr terms ... then they need a specica resolution to be appointed ... why require a separate 75% majority vote for allowance of an appointment where they have already faced an election to get there??? illogical in the extreme because they may get enough general votes to be the electrorates choise but then fail to get a 75% majority to be allowed to be appointed - this would be a farce.

 

Cl38.3(b) reference to Cl43 delegations - but cl43 is not about delegations - I think it should refer to Cl39

 

Cl52.1(d) reference to Cl29 - wrong reference again - should be Cl28

 

Cl54 talks of the member charter - given this has the same power as the Constitution in terms of binding members can we PLEASE see the charter as part of this - particularly as the Constitution is only changed after consultation and vote by members whereas the charter is under the direct control and edit of the directors without requirement to put it to the members - I really do not like this as it is a back door to control and rules - not saying the directors intend to use it but without sighting the charter I am unhappy

 

Cl55.1 refers to Cl5858 ... typo should read Cl58

 

Cl 57 is a ripper - to be allowed to use other than written notice as communiations the Company has to have an email nominated by member and how are RAAus going to manage collection of this ... or more particularly where a member refuses to accept email, web postings, portal posting etc ... we HAVE to give notices to all members for AGMs etc and we will have members who refuse to accept electronic comms and this constitution gives the power to the member

 

Cl57(b) where and how are members going to nominate acceptance of an email address for the purposes of notices from the company ...and how/where will RAAus record that an email address is NOT to be used for notices and HOW will we manage that and ensure all notices are valid and complete?

 

Cl57© member portal notification to members only allowed if member nominates it ... same issue on recording member nominations and refusals and dealing with this mixed bag

 

Cl57(d)same issue on agreed by member ... here to record, how to record not accepted and deal with the mixed bag

 

The whole member electronic continues into 57.2 but overall its really impractical as it stands

 

There you go Board - practical issues and errors in the draft and that before considering the rights and wrongs of reducing board numbers.

 

I will copy this into an email to the CEO and pop it into the black hole of fake consultation that has been the hallmark of the whole process.

 

Cheers

 

 

[kasper]

Time to think ... How would a person spoiling for a fight look at this?

 

1. under this change from association to company form all 'member' become liable to at most $2 (two years membership with break can lead to 2 x $1) the issue of CASA making an ultra vires decision in approving the Ops Manual becomes more likely to be tested in the AAT or court. This change is fundamentally different from the current association rules where the liability is limited to unpaid member/registration dues at the date of winding up. Due to this change I query if this is going to make it impossible for the CASA to approve an Ops manual that requires membership under the new company structure - the membership compulsion with associated liability looks terribly like a reviewable decision of CASA that is ultra vires to CASA and can be tested at the AAT or in court.

 

2. We already have a potential problem with our current disciplinary procedures as they specifically refer to breach of the CAOs ... trying to enforce a CAO is a statutory vested in CASA - are the RAAus actually exercising regulatory enforcement under the guise of member disciplinary that is an unlawful delegation of power from CASA to RAAus? I do not know BUT we should be told unequivocally that it is not or the entire area of disciplinary will be subject to being struck down.

 

Just a couple more random thoughts ... and as the cost to apply to the AAT for review of any CASA decision that is resolved in your favour is only $100 these type of issues may well come up

 

 

[Jim McDowall]

Time to think ... How would a person spoiling for a fight look at this?

Not that I'm spoiling for a fight but I'm sick to death of bureaucrats (not just CASA) mis-using or even creating powers to achieve goals that are not of the Parliaments making including allowing private organisations to, in effect, legislate.

 

 

[DonRamsay]

I thank all members who have raised with the CEO the issues that concern you.

 

They are thereby put on official record and must be attended to. The CEO may not be able to respond directly other than an acknowledgement of receipt but all input will be given consideration.

 

Rather than trying to answer individually the pages and pages and pages of issues raised above can I ask that you look closely at the 3rd edition of the Constitution news email that will be out in later this week. It will have a link to the draft of the Members Charter and I think that it will relieve a lot of your reasonable concerns.

 

Considerable work is being undertaken on the draft of the Constitution and a further version will be released along with the draft of the Disputes Procedure as soon as available.

 

The revisions do not alter the broad thrust of the current draft of the Constitution but incorporates a considerable number of fixes. There is not much point to further discuss the current draft - better to save your ammunition for the next draft where you will be able to see what of your suggestions that have been communicated through proper channels (Admin/CEO) have been accepted. If all you've done is air your thoughts on here then that is possibly all that will happen with them.

 

 

[frank marriott]

Members should consider the possible outcomes of the proposed change and make up their own mind and vote accordingly :

 

Obviously I don't support the changes, but that is only one, the majority (or at least those who feel strongly enough to vote) will decide:

 

• With the change to a 7 member board. The possibility of 4 board members forming a group (for whatever reason) and having full control of every board decision. Whilst this is not expected, this is a reality. This is without considering the appointment of directors (paid?) which could be controlled by these same 4 - giving rise to the jobs for the boys/girls/mates - an allegation made against a previous board. This is the reality of a small group - the smaller the group the easier to "control".
   
   
  

 

 

 

 

 

• One of the reasons given was saving costs of meetings with the reduction of board members? If you are appointing paid directors then these costs would not be saved and in every likelihood increased. If a particular skill is required for a consideration, this can be obtained without appointing a paid director.
   
   
  

 

 

 

 

 

• Limited terms. The reason for this proposal is very vague to say the least. If an elected representative is considered to be effective why should they be prevented from standing for another term (forget the special provisions)? What is the intent here, there is obviously a perceived reason to include it or it wouldn't be proposed. Sounds like "we can't trust the silly voters to make a considered opinion". If it is not a problem, why include the restriction? It is a grey area to venture into when you start to legislate to stop members achieving what they actually desire.
   
   
  

 

 

 

 

 

• Conflict of interest. If a member has a conflict of interest in a decision to be made they shouldn't be permitted in the decision making process - period.
   
   
  

 

 

 

 

 

• Time to consider a new constitution - Well the proposal is still not finalised and a few weeks before the meeting is far too short IMO - it needs to be digested and then discussed with fellow members.
   
   
  

 

 

 

Whilst the proposed changes with the proposed new constitution is supported by the board it is not supported by all board members - with a majority of 4 (new proposal) this decision making by a few becomes a real consideration. Don't just think in terms of the current board members, but of the future possibilities. From what I hear generally the current board is not being attacked but think of what MAY be the result should these changes be implemented and unpopular appointments made.

 

Ultimately the members will have their say on whether they agree or not but what I would like to see is a couple of thousand votes V what we have come to expect i.e. Numbers in the hundred/s.

 

 

[rhysmcc]

Thanks for the update Don, from the boards view what is reasoning behind separating the members charter from the constitution?

 

 

[DonRamsay]

Thanks for the update Don, from the boards view what is reasoning behind separating the members charter from the constitution?

Rhys,

As you can see, The Members' Charter is inextricably tied to the Constitution and has the force of the Constitution. However, as you could guess, many (most?) of our 10,000 members would never have read the current Constitution nor the drafts of the proposed constitution. Having it popped out from the Constitution just makes it more accessible and more likely to be read than if it were buried amongst the 67 clauses of the new Constitution.

 

 

[coljones]

Rhys,As you can see, The Members' Charter is inextricably tied to the Constitution and has the force of the Constitution. However, as you could guess, many (most?) of our 10,000 members would never have read the current Constitution nor the drafts of the proposed constitution. Having it popped out from the Constitution just makes it more accessible and more likely to be read than if it were buried amongst the 67 clauses of the new Constitution.

I think the question at this moment is: who writes,enacts and changes the various charters, bylaws, rules etc that are not explicitly tied into the constitution and what role does the rank and file (aka, the masses) have in the process?

 

 

[DonRamsay]

Frank,

 

Thanks for this well written post clarifying your concerns about the new Constitution.

 

I hope I can answer them to your satisfaction.

 

. . .

• With the change to a 7 member board. The possibility of 4 board members forming a group (for whatever reason) and having full control of every board decision. Whilst this is not expected, this is a reality. This is without considering the appointment of directors (paid?) which could be controlled by these same 4 - giving rise to the jobs for the boys/girls/mates - an allegation made against a previous board. This is the reality of a small group - the smaller the group the easier to "control".
   
   
  

What you are concerned about is mathematically possible and was just as possible on a 13 person Board and, as you say, did happen prior to 2013. The big difference is that the current Constitution is overviewed by the ACT's Office of Registry Services (ORS) whereas under our new form of incorporation we will come under the direct supervision of the powerful Australian Securities and Investments Commission (the other ASIC).

The ORS proved to be, in my view, a toothless tiger when called on to reign in the old Board's excesses. Despite numerous formal written complaints about the old Board acting in breach of our Constitution, the ORS chose to do nothing. That was why we had to go to the extraordinary lengths of a General Meeting called by the members. That action by the members was opposed by the Board as hard as they could and used considerable members funds in attempting to stop the members meeting.

 

Under the new constitution, the Directors have a duty to ensure that candidates have the knowledge to operate at Board of Directors level. The Directors do not control who is voted onto the Board as that remains the right of members. Any group of Directors that set out to dominate the Board and act inappropriately, that is other than in the best interests of all members, would come to the unwelcomed attention of ASIC. Directors are exposed to quite severe penalties as prescribed by the Corporations Act if Directors do not act in good faith and for the benefit of ALL members.

 

We will have more capable, more disciplined and more accountable Directors under the new Constitution. To give you an example, at the last election for the Sth Australian Region, there were two highly qualified candidates but, as SA has an entitlement of only 1 Board Member we got the benefit of only one of those two candidates.

 

• One of the reasons given was saving costs of meetings with the reduction of board members? If you are appointing paid directors then these costs would not be saved and in every likelihood increased. If a particular skill is required for a consideration, this can be obtained without appointing a paid director.
   
   
  

While there is a provision in the new Constitution to be able to compensate Directors for the considerable time and energy they contribute there are no plans to actually do that at the moment or, in my view, for the foreseeable future. Similarly, we have under the new Constitution provisions for registration and management of Spacecraft but we aren't planning on running flight training schools for astronauts just yet.

 

Nobody would argue for directors of a local aero club to be remunerated for being on the Club's management committee. However, there could come a day, e.g., when RAAus has, say, absorbed all the other RAAOs and much of recreational GA has been placed under the self-administration model and taken under RAAus's wing. If we were talking about a body with 25,000 members and a turnover in the $5 million to $10 million range it could be cost effective to have a senior legal and finance people on the Board. If we don't offer to compensate those people then we may not get the level of Directors that we would then need. There is a very large difference between running an organisation of that size and your local flying school with a CFI and one instructor.

 

• Limited terms. The reason for this proposal is very vague to say the least. If an elected representative is considered to be effective why should they be prevented from standing for another term (forget the special provisions)? What is the intent here, there is obviously a perceived reason to include it or it wouldn't be proposed. Sounds like "we can't trust the silly voters to make a considered opinion". If it is not a problem, why include the restriction? It is a grey area to venture into when you start to legislate to stop members achieving what they actually desire.
   
   
  

I once put a Special Resolution to an RAAus AGM to limit the term of Board Members to, if I recall correctly, three terms. It was voted down by the Board.

The argument for limited terms is that we are a more mature organisation now than we were 30 years ago. It would not be unfair to say that the Board now has a much higher average age than the kids had when it was kicked off. There are many reasons for limiting the terms of Board Members and they include fresh ideas, not imposing on the same small group for 25 years or more, etc.

 

The new Constitution does not limit the time a highly regarded, young Director (e.g. Mick Monck) can spend in the service of RAAus on the Board. But, if Mick wanted to spend more than 9 years on the Board he would need a Special Resolution to be allowed to do that. There are examples with the EAA in the USA where one person has done a brilliant job over decades in the top job so it shouldn't be precluded - just made a bit more difficult. I have no doubt that MIck Monck could do another 15 or 20 years on our Board and, if he's doing as good a job then as he's doing now, he would easily pass the test of a Special Resolution.

 

• Conflict of interest. If a member has a conflict of interest in a decision to be made they shouldn't be permitted in the decision making process - period.
   
   
  

Agreed. And the new Constitution does not avoid that principle. However, this is not as black and white as you might imagine. Virtually every person who can be a Board Member is going to have a degree of personal interest in every matter that comes to the Board. For example, if the annual budget contained a provision for an increase in fees, every Director will be personally affected. Similarly, if a reduction in fees or even no change in fees was proposed every Director has a potential conflict of interest - do they look after their personal best interest by voting against a fee rise or do they look after their personal best interest by voting in favour of an increase so RAAus remains viable and he can continue to have access to low regulation aviation?

 

The important thing is every Director must consider their personal interest and if it is material (significant not trivial) must declare it.

 

Clause 43.3 requires Directors with a material personal interest to not vote and not participate in the discussion.

 

Clause 43.4 recognises that it may be in the best interest of RAAus to hear from a Director who has particular expertise in an area even though they have a material personal interest. For example if they were the only CFI on the Board then the Board's discussion could well benefit from input from a CFI on the matter.

 

Without Directors and Officers insurance you would be financially insane to agree to be a director of a company. But, the premium for D&O's insurance must be approved by the Board even though they each have a material personal interest in having D&O insurance.

 

Allowing a director with a material personal interest to participate and vote on an issue has very severe conditions placed on it by Clause 43.4 and the Corporations Law.

 

• Time to consider a new constitution - Well the proposal is still not finalised and a few weeks before the meeting is far too short IMO - it needs to be digested and then discussed with fellow members.
   
   
  

Agreed Frank. Time is short and we have a deadline to get this done so we can start the new Company with effect from the start of the new financial year, 1 july 2016. To delay it for another year is more undesirable than having to work harder to get it done in time for the new financial year. The Board has been working hard on it for the last few weeks and will continue right up to the deadline for getting the final draft to the members for a vote.

 

I earnestly encourage everyone to not dismiss this critical-to-the-future of RAAus project out of hand because they are not prepared to take the time to read yet another bloody draft. We are delaying the draft that was to come out last Friday to next Friday to ensure we have a document that is near final draft.

 

Communication to date hasn't been perfect but it will have been reasonable by the time we get to vote.

 

 

[DonRamsay]

I think the question at this moment is: who writes,enacts and changes the various charters, bylaws, rules etc that are not explicitly tied into the constitution and what role does the rank and file (aka, the masses) have in the process?

The Board approves the Charter and the Members elect the Board. It is not a lightning fast reaction but it is inevitable if the Directors stuff it up.

Key words like Natural Justice and Procedural Fairness are not just pretty words. And even if they were taken out of the Charter by a rogue Board, they would be taken as implied by any court.

 

 

[rhysmcc]

Under the new constitution, the Directors have a duty to ensure that candidates have the knowledge to operate at Board of Directors level. The Directors do not control who is voted onto the Board as that remains the right of members.

Do you not see a flaw in this system? While I'm sure the current board has the best intentions, what will stop future boards in limiting or excluding certain members from nominating based on not having the "skills required"? The skill set is not defined and is decided by the board of the day.

 

The Directors ARE in control on who gets elected because THEY get to choose who we vote between! If the former board had this power I wonder how many of the current board would have been able to nominate?

 

 

[DonRamsay]

. . . what will stop future boards in limiting or excluding certain members from nominating based on not having the "skills required"? The Directors ARE in control on who gets elected because THEY get to choose who we vote between! . . .

The Directors are not given that power by the new Constitution. They cannot choose who gets to stand for election as long as they meet the requirements of Clause 34.3, "a person who is eligible for election as a Director of the Company." and they comply with the election process (Clause 34.5).

 

You may be thinking that the Directors get the power to exclude anyone for any reason because of Clause 34.5:

 

"The Directors shall ensure that the process of calling for nominations and the election of Directors shall take account of the skills and experience reasonably required to have oversight of the Company."

 

but that would be an incorrect reading.

 

The key words are "the process . . . shall take account of ". It does not give the Directors carte blanche to write a process to exclude anybody that they don't like. The (as yet unreleased) Members' Charter requires Procedural Fairness and Natural Justice and, in my view, would prohibit unreasonable discrimination.

 

What Clause 34.5 is about is ensuring the election process takes account of skills and experience of the candidate. It does not give the Directors the right to exclude somebody because they lack a PhD in Corporations Law.

 

Consider a typical election statement that you'd have seen lots of over the years which go along the line of "I'm an aviation enthusiast and I fly a J230. I have been a member of the AUF/RAAus for more than 20 years. My aim is to work hard to implement some innovative ideas that will greatly benefit members. etc."

 

Under Clause 34.5, the Directors would be obliged to send that statement back to its author and ask for the statement to be revised to include details of "the skills and experience reasonably required to have oversight of the Company". Under Clause 34.5, the Directors are obliged to ensure that the statement from the candidate addresses these matters as they would have been advised when the Directors invited candidates to be nominated. A potential candidate would disqualify himself/herself if they refused to follow the election process.

 

The statement in that example would have been completely acceptable under the election process if it also included the comment "I have no previous experience in senior management of a small/medium sized corporation nor as a director of a company, nor have I successfully completed any corporations management education/training courses." The Members are entitled to know that rather than just how many different types of aircraft they've flown or that in private life they are a highly skilled geologist.

 

The point is that members in voting must have been clearly informed of the candidate's "skills and experience reasonably required to have oversight of the Company" if the members are to make an informed decision when casting their vote.

 

To reiterate, the Board are required to have a process for electing Directors but they are not entitled to refuse to accept a candidate that has been nominated by two members and they conform with the Constitution. There is no member who could claim to be unreasonably refused candidacy if all they have to do is make an accurate declaration of their suitability to be a Director under the Corporations Act.

 

Under the Members' Charter the words "Procedural Fairness" and "Natural Justice"are included.

 

You should see the Members' Charter and the next draft of the Constitution by Friday of this week.

 

Fair enough?

 

Don

 

 

[DonRamsay]

I think the question at this moment is: who writes,enacts and changes the various charters, bylaws, rules etc that are not explicitly tied into the constitution and what role does the rank and file (aka, the masses) have in the process?

Col,

As per the current Constitution, the Board votes in By-Laws on the basis of a motion for a Board Resolution moved and seconded in a Board Meeting. The By-Laws must be on be matters allowed by, and not in conflict with, the Constitution. Same goes for the Members Charter.

 

The role of the hoi poloi is the same under the new Constitution as it is now - they elect the people who make the By-Laws. The difference is that under the new Constitution, Procedural Fairness and Natural Justice apply and the Directors have a severe task master (ASIC) for any Director who does not act in good faith and for the benefit of all members.

 

Don

 

 

[kasper]

The Directors are not given that power by the new Constitution. They cannot choose who gets to stand for election as long as they meet the requirements of Clause 34.3, "a person who is eligible for election as a Director of the Company." and they comply with the election process (Clause 34.5).You may be thinking that the Directors get the power to exclude anyone for any reason because of Clause 34.5:

 

"The Directors shall ensure that the process of calling for nominations and the election of Directors shall take account of the skills and experience reasonably required to have oversight of the Company."

 

but that would be an incorrect reading.

 

The key words are "the process . . . shall take account of ". It does not give the Directors carte blanche to write a process to exclude anybody that they don't like. The (as yet unreleased) Members' Charter requires Procedural Fairness and Natural Justice and, in my view, would prohibit unreasonable discrimination.

 

What Clause 34.5 is about is ensuring the election process takes account of skills and experience of the candidate. It does not give the Directors the right to exclude somebody because they lack a PhD in Corporations Law.

 

Consider a typical election statement that you'd have seen lots of over the years which go along the line of "I'm an aviation enthusiast and I fly a J230. I have been a member of the AUF/RAAus for more than 20 years. My aim is to work hard to implement some innovative ideas that will greatly benefit members. etc."

 

Under Clause 34.5, the Directors would be obliged to send that statement back to its author and ask for the statement to be revised to include details of "the skills and experience reasonably required to have oversight of the Company". Under Clause 34.5, the Directors are obliged to ensure that the statement from the candidate addresses these matters as they would have been advised when the Directors invited candidates to be nominated. A potential candidate would disqualify himself/herself if they refused to follow the election process.

 

The statement in that example would have been completely acceptable under the election process if it also included the comment "I have no previous experience in senior management of a small/medium sized corporation nor as a director of a company, nor have I successfully completed any corporations management education/training courses." The Members are entitled to know that rather than just how many different types of aircraft they've flown or that in private life they are a highly skilled geologist.

 

The point is that members in voting must have been clearly informed of the candidate's "skills and experience reasonably required to have oversight of the Company" if the members are to make an informed decision when casting their vote.

 

To reiterate, the Board are required to have a process for electing Directors but they are not entitled to refuse to accept a candidate that has been nominated by two members and they conform with the Constitution. There is no member who could claim to be unreasonably refused candidacy if all they have to do is make an accurate declaration of their suitability to be a Director under the Corporations Act.

 

Under the Members' Charter the words "Procedural Fairness" and "Natural Justice"are included.

 

You should see the Members' Charter and the next draft of the Constitution by Friday of this week.

 

Fair enough?

 

Don

to answer your question - no. Absolutely not fair enough.

If this is actually what is expected then this board and this constitution are stark bonkers.

 

What we need are flyers and visionaries for sports aviation regardless of prior corporate experience and requiring everyone to state their prior corporate experience amounts to a de facto selection criteria that has nought to do with the purpose of the association.

 

You probably will write off this view as one from someone with nothing positive but really this desire to make people state corporate background which is nothing to do with the purpose of the association is wrong headed. Corporate director training is available at low cost for any/all directors and we really should be focusing on the desire and direction people can provide on the purpose of the association.

 

 

[Jim McDowall]

There is no member who could claim to be unreasonably refused candidacy if all they have to do is make an accurate declaration of their suitability to be a Director under the Corporations Act.

The Corporations Act (sec.9) defines a director of a company as ‘a person who is appointed to the position of director’.

There are no statutory academic, business or other qualifications to be appointed as a director of an Australian company, either public or

 

proprietary. The only legal requirement is that a director must be at least 18 years of age to be appointed (sec.201B).

 

It is usual for a company’s constitution to state that a director need not be a shareholder,but in some companies this is a prerequisite.

 

Also, a constitution may specify certain other requirements to be a director.

 

A person can, however, be disqualified from being a director unless ASIC or the Court consents (eg an undischarged bankrupt or have been convicted of various offences such as fraud or offences under company law, such as a breach of duties as a director or insolvent trading)

 

Even major public companies do not have the proposed rules. Instead much reliance is placed on the commonsense of the shareholders that vote. Some despotic "democracies" have similar vetting arrangements for elections (eg Iran). Perhaps it is elitist to presume that people without formal qualifications (like Bill Gates) may not be suitable as directors.

 

The outgoing board should not have any role in the conduct of elections from the time nominations are called. This democracy in action and how we end up with the governance (Governments?) we deserve.

 

 

[DonRamsay]

Kasper, Kasper, Kasper,

 

I had been doing my best not to respond to a person who thinks everyone's view but their own are abnormal due to a hereditary or acquired brain defect.

 

But, let me swallow my pride and respond to you anyhow.

 

. . . What we need are flyers and visionaries for sports aviation regardless of prior corporate experience . . .

We tried that and look where we ended up - within an inch of being wound up.

 

But what skills and experience are relevant? Well, it has a lot to do with the size of the organisation you are looking at. Let's start with the Management Committee of an aero club with perhaps 40 members and I would agree with your description of what's required to be on the management committee. Mind you, one accountant on the Committee to look after the books or do the audit can be useful and a lawyer to help us with club riles and leases, etc. The Club management Committee I sit on has both and is thus well resourced. Somehow we still manage to also be pilots, maintainers and have a modicum of vision.

 

Now, let's go to the other end of the spectrum and look at what you'd need in terms of the "skills and experience reasonably required to have oversight of the Company" for a director of a Fortune 500 company, say, American Airlines (the world's largest Airline). Just a bunch of "flyers and visionaries"? Nobody needed with corporate, legal, engineering or finance skills on the Board? I don't think even you would claim that would be appropriate and I'm certain that Wall Street and American Airlines' bankers would expect the directors to have the "skills and experience reasonably required to have oversight of the Company".

 

OK, so where do I see RAAus fitting on this spectrum? A fair way up from a 40 member aero club and a long way below American Airlines. You draw the line wherever you like and I promise I won't aggressively and disrespectfully accuse you of being "stark bonkers". After all, your view is derived from your own intellectual capacity, analytical ability and life experiences including skills and experience acquired in management. And my view is based on guess what? - the exact same things.

 

It is not reasonable for one person to dismiss out of hand another persons' opinion as "stark bonkers" - unless of course you happen to have psychiatric qualifications that you haven't made us aware of and are capable of telepathic diagnosis of psychoses.

 

. . . and requiring everyone to state their prior corporate experience amounts to a de facto selection criteria that has nought to do with the purpose of the association.

Again, that's your view. I would be appalled if you really thought having any management capability in a top management role was a drawback or that voting members should be denied this information because they might favour the enthusiastic skilled and experienced candidate over the just enthusiastic but without skills and experience.

 

The candidate's declaration is in no way a "de facto selection criteria [sic]". All RAAus asks is that candidates state what it is that they have done before that will fit them out for a job as a director. It is up to the Members to decide, as they do now, what criteria they will use in choosing between candidates. All the Constitution does is impose on Directors a duty to ensure that Members are provided with useful information by candidates so voting members can make an informed choice.

 

If the voting members are of your persuasion Kasper, and value enthusiasm over skills, experience and enthusiasm, then they will vote that way but if they want somebody in charge who understands their obligations as a director and has the skills and experience to be effective at that level then they will appreciate having been given that information about each candidate.

 

. . . this desire to make people state corporate background which is nothing to do with the purpose of the association is wrong headed.

RAAus was formed as an incorporated association otherwise described as a body corporate or simply a corporation. How is having skills and experience in business management "nothing to do with the purpose of the association"? How is it a handicap to doing a the best job at Director level? How does being able to read a balance sheet and analyse and criticise a budget not form part of the core skills needed to sit at the top level of management of an enterprise like RAAus? How does a background in corporate risk management disqualify somebody from overseeing the risk profile of a body like RAAus that governs a risk prevalent activity?

 

Corporate director training is available at low cost for any/all directors and we really should be focusing on the desire and direction people can provide on the purpose of the association.

On the contrary, it is relatively expensive and not necessary for anyone who has had that experience. It also takes up the limited time of part-time, volunteer directors that could be otherwise devoted to the business and purpose of RAAus.

Possessing "skills and experience reasonably required to have oversight of the Company" does not make one incapable of flying nor of having vision. After all, only Members can be Directors of RAAus and last time I looked all Members were enthusiastic, amateur pilots and maintainers. Why should an enthusiast pilot with an MBA be less competent at Board level than an enthusiast pilot who has no management experience?

 

Incidentally, there is no ban on saying in your election statement how enthusiastic and what great vision you have for the future of RAAus.

 

Don

 

 

[coljones]

As passing thought. Under Corporations law we can have well supervised companies like Queensland Nickel and Dick Smith or we could register as a trade union and get mugged by every right wing politician, their running dogs and the shock jocks and have expensive enquiries under the workplace relations act. If you want supervision and procedural fairness I am not sure I would get it under the Corporations Act. Just a thought.

 

 

[DonRamsay]

Jim,

 

I clearly can have no argument with all the above legal points you make.

 

I don't know where it comes from but there seems to be this impression that the Constitution gives the Board the right to can say who can be a Director and who can't. That is simply not the case. Clause 34 sets the requirements and does not give the Board any discretion in the matter.

 

The Corporations Act (sec.9) defines a director of a company as ‘a person who is appointed to the position of director’. There are no statutory academic, business or other qualifications to be appointed as a director of an Australian company, either public orproprietary. The only legal requirement is that a director must be at least 18 years of age to be appointed (sec.201B).

The requirements to be a director of RAAus are explicitly set out in Clause 34 and none are contrary to the Act and none require particular experience or skills.

 

It is usual for a company’s constitution to state that a director need not be a shareholder,but in some companies this is a prerequisite.

It is a prerequisite to be a Member to be a director of RAAus Ltd.

 

. . . Even major public companies do not have the proposed rules.

To which Clauses are you referring to here?

 

Instead much reliance is placed on the commonsense of the shareholders that vote.

As is the case presently and in the proposed Constitution. Democracy is the worst form of government you can have . . . . except for every other form. W S Churchill. Democracy gave us Ronald Reagan and G H W Bush but that's a cost of doing business. We've had some Board members I wouldn't feed but they were popularly elected. Under the proposed Constitution the directors will be popularly elected. The process for the election will be, as it is now, encased in By-Laws approved by the Board. No change. The only "new" thing relates to ensuring the voting Members are given vital information about the skills and experience of the candidates. It is then, as you say, up to the voters "common sense" to decide who will serve RAAus the best.

 

The outgoing board should not have any role in the conduct of elections from the time nominations are called. This democracy in action and how we end up with the governance (Governments?) we deserve.

The Directors will have no role, at any stage of the election process. The rules for the process will be crystal clear and it will be the Public Officer / Company Secretary who runs the election on the rules proscribed in the By-Laws - just as happens now.

Nowhere in the proposed Constitution does it require any skills or experience as a prerequisite to be a candidate or to be elected.

 

Don

 

 

[DonRamsay]

Oh, what I'd give to see the CFMEU mugged - the ever virtuous untouchables who run the ALP with an iron fist and big bucks that were obtained totally above board and beyond reproach. ASIC has Royal Commision like powers but even a Royal Commission doesn't seem to be able to clean up the CFMEU. And the banks have to contend with ASIC and APRA but we need a Royal Commission as well? That's just class warfare payback.

 

 

[Jim McDowall]

The Directors will have no role, at any stage of the election process.

Don you said:

 

Under Clause 34.5, the Directors would be obliged to send that statement back to its author and ask for the statement to be revised to include details of "the skills and experience reasonably required to have oversight of the Company". Under Clause 34.5, the Directors are obliged to ensure that the statement from the candidate addresses these matters as they would have been advised when the Directors invited candidates to be nominated. A potential candidate would disqualify himself/herself if they refused to follow the election process

This leaves your statement at odds with your view:

 

impression that the Constitution gives the Board the right to can say who can be a Director and who can't. That is simply not the case. Clause 34 sets the requirements and does not give the Board any discretion in the matter.

and also:

 

The Directors will have no role, at any stage of the election process. The rules for the process will be crystal clear and it will be the Public Officer / Company Secretary who runs the election on the rules proscribed in the By-Laws - just as happens now.

It is concerning that the Constitution requires subsidiary documents and by-laws to make it work. One would hope and trust that in no way do they provide the capacity for the Board to reduce or modify members rights AND that the Constitution provides a mechanism for member review of any change such as ratification by referendum of members. In the meantime, the new by-laws etc would operate.

 

 

[DonRamsay]

Jim,

 

My poor choice of words saying the Directors do any election admin. The Company Secretary runs the election process with no input from the Directors of the day. The Directors' role is well in advance of any election and consists of approving a set of By-Laws that are consistent with the Constitution to govern the conduct of the election. This is exactly the same as now. The Directors have a set of By-Laws and the Public Officer (= Company Secretary) conducts the election process from calling for nominations to announcing the winners and runner-ups.

 

. . . It is concerning that the Constitution requires subsidiary documents and by-laws to make it work.

As I wrote above this is the same situation as now. And I think you will find that most corporations have Board approved By-Laws.

 

One would hope and trust that in no way do they provide the capacity for the Board to reduce or modify members rights AND that the Constitution provides a mechanism for member review of any change such as ratification by referendum of members. In the meantime, the new by-laws etc would operate.

Yes to both of those points and we will all get to see that well in advance of being asked to vote on their adoption. The Members' Charter specifically bars the Board from reducing Members' rights in any way. It is regrettable that the draft Members' Charter has not been distributed yet but you should see it quite soon.

 

We all need to cut the Office (and the Exec ) a bit of slack at the moment as the current workload is insane. The finishing touches are going on to a new edition of the Tech Manual and the Ops Manual, a new Constitution and the Members' Charter and submissions to CASA for increased MTOW and access to CTA plus quarterly financial analysis and Financial Plan preparation.

 

 

[cooperplace]

I emailed the CEO over a week ago suggesting that the draft constitution should at least have a table of contents at the start -makes it a lot easier to navigate thru the document. There's no reply to my email, and there's no table of contents. So you have to page thru the entire document to find something.

 

The failure to respond to my suggestion undermines my confidence in the process.