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Options for Rule Changes to be put at the next AGM

 

Options for Rule Changes to be put to members at the next AGM

 

In the March 2015 AGM, members passed measures to modernise some of the governance structures of the Club, setting out more properly the roles of the Flag, EC, and General Manager in particular. This saw the GM role become much more of a “CEO” role, reporting to a Board of Directors, rather than the previous model which saw the EC more directly run the Club.

We should not stop here. Reform is an ongoing process, and there are a number of areas where the Rules of Association have not kept up with the growth of the Club, and best business practice. The suggestions below address gaps or flaws in our governance arrangements, improve accountability, enhance stability, and also propose changes to memberships to reflect the often short-term nature of our customers in Port Moresby in a way similar to that taken by other Clubs.

Proposal 1 – The position of Treasurer and lack of an internal audit function

Proposed amendments to Rule 20(g) as follows:

“(g)        Honorary Treasurer

i.      The Honorary Treasurer shall Chair the Finance, Audit and Risk subcommittee.

The role of the Finance, Audit and Risk subcommittee will be to:

  1. Provide advice and support to Club Management to develop and review annually the Club risk management framework;
  2. Provide advice and support to Club Management to develop and operate an internal audit process.

 

ii.     The Honorary Treasurer shall support and advise the Club Management, when requested, to ensure payments out of Club funds of all accounts are enacted as passed for payment by the Executive Committee, or its delegated officers, upon the ratification of the Board where applicable

 

iii.    The Honorary Treasurer shall provide support and advice to ensure the Club Management cause to be kept such proper books of accounts and other records as will sufficiently explain the transaction and financial position of the Club and enable true and fair profit and loss accounts, balance sheets and statements required by these Rules to be prepared from time to time and cause those records to be kept in such a manner as to enable them to be conveniently and properly audited.

 

iv.   The Honorary Treasurer shall present to members at the annual general meeting a duly audited financial statements prepared to Papua New Guinea Institute of Accountants standards for the financial year up to the 31st day of December in the year immediately preceding the date of the meeting, as well as a summary of the activities of the Finance, Audit and Risk subcommittee.

 

v.    The Honorary Treasurer shall present to members at the August general meeting summary financial statements for the half year up to the 30th day of June immediately preceding the date of the meeting.

 

vi.   The Honorary Treasurer shall, where required, assist management with support and advice in producing all books and other records required from time to time by the Auditor or Auditors.

 

vii.  The Honorary Treasurer shall support and advise Club Management in preparing projected budgets and business plan for presentation to the executive committee prior to the 1st of December each year.

 

viii. At the monthly meeting of the executive committee, the Honorary Treasurer shall be available for review of a summarised financial statement, which shall highlight all major expense items, for the financial activities of the club for the preceding month for Club Management should advice and support be requested”

 

Rationale: - There is currently no internal audit function within the Club and no risk management framework, contrary to good governance practice. The Club is now big enough that both are required in order to assure ourselves and members that our approach to financial & stock controls is documented & rigorous, and that our understanding of risk and loss is improved.

 

Proposal 2 - Code of Conduct for Officers, FAB, and members of controlling committees and subcommittees.

 

Insert a new Rule 52 as follows:

 

52.          Officers, members of the Board, and members of controlling committees and subcommittees are required to adhere to the following Code of Conduct:

 

  1. Office-holders should act honestly, in good faith and in the best interests of the Club as a whole.
  2. Office-holders have a duty to use care and diligence in fulfilling the functions of office and exercising the powers attached to that office.
  3. Office-holders should use the powers of office for a proper purpose, in the best interests of the Club as a whole.
  4. Office-holders should recognise that the primary responsibility is to the Club as a whole but may, where appropriate, have regard for the interest of other stakeholders of the Club.
  5. Office-holders should not make improper use of information acquired as an Office-holder.
  6. Office-holders should not take improper advantage of the position of Office-holder.
  7. Office-holders should properly declare and manage any conflict or perceived conflict of interest with the Club.
  8. Office-holders have an obligation to be independent in judgement and actions and to take all reasonable steps to be satisfied as to the soundness of all decisions taken by the Executive Committee, Board or relevant Committee on which they sit.
  9.  Confidential information received by Office-holders in the course of the exercise of duties remains the property of the Club and it is improper to disclose it, or allow it to be disclosed, unless that disclosure has been authorised by the Club, or the person from whom the information is provided, or is required by law.
  10. Office-holders should not engage in conduct likely to bring discredit upon the Club.
  11. Office-holders has an obligation, at all times, to comply with the spirit, as well as the letter, of the law and with the principles of this Code.

 

  •   The suggested Code is directly modelled on the Australian Institute of Company Directors Code of Conduct. Some of this will exist in Company law, and there are the broad “show cause” provisions, however this would serve to make clearer the ethics expected of senior management and other Office-holders.

 

Proposal 3 - Shorter-term memberships and Social Memberships

1.            Amend Rule 9 to change the following with effect from 1 January 2017:

      (a)    Full membership;

2.            Amend Rule 9 to add a new sub-class of member:

  1. Social membership

 

 

3.            Amend rule 10 as follows with effect from 1 January 2017:

10.          FULL MEMBERSHIP

(a)          Full membership may be granted to persons of either sex.

(b)          Ordinary members are eligible to vote at general meetings, to stand for election as Officers, subject to rule 35 (b), Board Members and to take part in Club competitions.

(c)           Full membership fees shall be set at a rate 25% greater than Social memberships, with any future changes subject to Rule 40.

4.            Amend the Rules with effect from 1 January 2017 to replace the terms “ordinary membership” and “ordinary members” and “ordinary member” with the terms “full membership” and “full members” and “full member” respectively wherever the term appears.

5.            Create a new Rule 15A:

15A.       Social memberships

(a)          Social memberships may be granted to persons of either gender.

(b)          Social members are not eligible to vote at general meetings or to stand for election as Officers or Board Members but may take part in Club Championships, competitions and may use and enjoy all the facilities and privileges of the Club.

(c)           Social memberships may be granted for periods of 12, 6 and 3 months on application.

(d)          Social memberships may be single or family memberships

(e)          Social membership fees shall be the same as ordinary membership fees as set from 1 January 2016 (where these are for a 12-month period), no more than 7 months pro-rata of such fees (where the membership is for a 6-month period), and no more than 4 months pro-rata of such fees (where the membership is for  3-month period).

(f)           Future changes to Social membership fees shall be subject to Rule 40.

 

Rationale – this practice is similar to that employed by similar Clubs and recognises that a large number of people simply do not join or renew memberships where they are expecting to be in country for less than 12 months. A significant part of the membership base is drawn from those who are here on 3-year contracts, or less, which may not start or finish around the start/end of a calendar year. It also draws a distinction between those who wish to be active in Club meetings, governance and leadership, and members who do not, with a corresponding variation in fees.

 

Proposal 4 - Increase the EC/Management spend limit without FAB clearance to K100,000

Amend Rule 30 (a), (b) and (c) so that the term K50,000 where it appears reads instead “K100,000”.

 

  • – K50,000 is not a sensible limit on capex spending for an organisation of the current turnover and size. Key marker Clubs operate at a K100,000 limit before controlling approval is required. By way of context, the Club fortnightly payroll is about K80,000, and our monthly electricity bill is over K100,000. The proposal does not otherwise change FAB role or power of veto.

 

 

 

 

Proposal 5 – Change Executive Committee officeholder terms of office to 2 years, with half-Committee elections at each AGM

 

Amend Rule 19 as follows with effect from 1 January 2017:

 

 

19.          EXECUTIVE COMMITTEE

 

(a)          There shall be an Executive Committee consisting of the following officers: The Commodore; The Vice Commodore; Rear Commodore; Marina Captain; The Honorary Secretary; The Honorary Assistant Secretary; The Honorary Treasurer; The Social Secretary; and Three General Committee persons.

 

(b)          Subject to the provisions of this Rule and of Rule 21 at least six positions on the Executive Committee shall be elected at the Annual General Meeting.

 

(c)           Subject to this rule, each member of the Executive Committee shall be entitled to remain in office for two years where they have been elected by an Annual General Meeting held in or after 2017. They shall vacate office at the Annual General Meeting which takes place  two years after their election, however, subject to these rules, may seek re-election at that Annual General Meeting.

 

(d)          Members of the Executive Committee appointed pursuant to Rule 21(c)(ix) shall vacate office at the first Annual General Meeting following their appointment.  

 

(e)          Where there are not six vacancies among the members of the Executive Committee at any Annual General Meeting by virtue of subclauses (c) and (d) of this rule, vacancies to take effect at the next Annual General Meeting shall be selected by one of the following means to achieve the required number of vacancies:

                (i)            The Commodore may ask for volunteers to vacate office; or

                (ii)           The Commodore may cause the Honorary Secretary to draw lots;

 

(f)           Members identified pursuant to subclause (e) above shall vacate office at the next Annual General Meeting, however, subject to these rules, may seek re-election at that Annual General Meeting.

(g)          If they are not otherwise elected as Flag Officers or Committee persons, the Immediate Past Commodore, the Captain of Sail elected under the provisions of Rule 26 and the Game Fishing Representative shall also be members of the Executive Committee with the same voting rights and privileges as a duly elected Committee person.

 

Rationale – Having a full Executive Committee election each 12 months makes stability of planning and purpose hard to achieve. Members and Management need some certainty to the direction of the Club. Half EC elections at AGMs is more likely to allow expertise to grow amongst Committee members. Members will still retain the right to call an SGM to remove EC members who are not performing.

 

 

Proposal 6 – Finance Advisory Board to have ¼ election at each AGM.

 

Amend Rule 28(g) and create new Rule 28(h) as follows with effect from 1 January 2017:

 

(g)          A member once elected to the Board shall hold office until:-

(i)            they cease to be eligible to hold the position on the Board; or

(ii)           they absent himself from three consecutive meetings of the Board without reasonable justification; or

(iii)          they resign; or

(iv)         they are dismissed from office by the Executive Committee for gross misconduct in their capacity as a Board Member; or

(v)          any other person is duly elected by the members at a Special General Meeting to the position they hold; or

(vi)         they are required to vacate office by operation of subclause (h).

 

(h)          At least one position on the Board shall be vacant at and subject to election at a Special General Meeting each year, such meeting to be held immediately prior to the Annual General Meeting. Such vacancies shall arise or be identified by the following means:

                (i)            By operation of subclauses 28(g)(i) to (v);

                (ii)           By operation of rule 21(c)(Xiii); or

                (iii)          The longest-serving Board member who has held office for four years or more shall vacate office for the purposes of this rule; or failing these alternatives

                (iii)          a Board member may volunteer to vacate office in writing to the Honorary Secretary; or

                (iv)         a vacancy shall be determined by the Honorary Secretary drawing lots.

 

Rationale – current FAB elections may theoretically be “for life”. As a Club run for the members, this may lead to insufficient ability of members to periodically review the composition of the Board. ¼ Board elections each year will enable this without causing instability. Board members who vacate office for the purposes of these provisions may stand for re-election. 

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