Another Fine Mess

The recommendations of the Crawford Report and the structures put in place following the formation of the Football Federation of Australia were supposed to have ensured that all involved in the game had a voice, and that the game was run in a transparent manner. Sadly this has not always been the case. Yet who is to blame?

Should the FFA as the Governing body of the sport be making sure that all of the state bodies are run properly, or does that responsibility fall with those elected to the Standing Committees? Certainly the latter need to, in many cases, be far more across the constitutions under which the game is operating.

In Western Australia the state’s governing body Football West failed to hold an Annual General Meeting in 2015. Whose job is it to ensure that an AGM is called? The FFA or the Standing Committees?

To some this may not seem a big deal, but unfortunately it is a big deal, a very big deal.

Only in extreme cases will an extension beyond the year be granted to companies, but according to the Australian Securities and Investments Commission (ASIC) no such request was made.

This is no minor issue and is in breach of section 250N of the Corporations Act. This section reads “A public company must hold an AGM at least once in each calendar year and within 5 months after the end of its financial year.”

Having spoken to ASIC who are the arbitrators, they confirmed that the section does not offer an alternative. An AGM should have been held in 2015. A follow up meeting in which Football West presents their Financial report must be held within 5 months of the end of the company’s financial year. So the Financial Report must now be presented before the end of February 2016.

This may confuse those who pay close attention to details. The reason being in the Chairman’s report at the AGM held on 18 December 2014 he stated “The Board has decided that a better representation of the activities for each season will be provided by closing the financial year at the end of October after these activities have concluded. Consequently, the Board has applied to the Australian Securities and Investments Commission for relief to adjust the financial year from 30 September to 31 October.”

When Not The Footy Show spoke to ASIC they advised that they had not received such a request and that they still have the reporting period ending on September 30th. Hence why the deadline is the end of February and not March 2016.

One has to wonder why an AGM was not held within the required 12 months. This is a major breach of the Corporations Act and one that ASIC described as “very serious.”

If the CEO simply forgot to arrange an Annual General Meeting, the Board are responsible to ensure that one is held, and therefore all are culpable. Sadly many Board members in sports throughout the state fail to realise their legal responsibilities. If there are financial irregularities you are responsible, and claims can be made against your personal finances. You are fully accountable, and decisions such as this are very important and fall under the laws of the state

The failure to hold the AGM within the calendar year is an offence under the Criminal Code. So it is a criminal offence. Fines and in more serious circumstances prison can be the punishment.

What affect does this have on the running of the game? Some would argue that any decisions made by the board post December 18th 2015 could be voided if challenged by the members.

Knowing the seriousness of this failure to hold an AGM some could raise a motion that the stakeholders no longer have faith in the board.

When it comes to receiving funding from Government bodies, that funding could be placed in jeopardy. Not The Footy Show made calls to such bodies who simply advised that a breach of the Corporations Act was ‘looked upon very seriously.’ They would understandably not be drawn on the impact such a breach could have financially. They emphasised that they were more focussed on good governance.

When the AGM is held, and one would suspect that it will be before the end of February, bearing in mind that there has to be 21 days notice before the meeting can be held. If any positions on the Board are available then they must be advertised and the Nominations Committee assess those applications after the deadline to apply has closed. Then a vote would be held at the AGM. That again could delay the AGM further.

To add to the very messy mix is the issue as to whether the NPL Standing Committee can vote at the AGM. Sadly they cannot, despite what some are claiming. Voting is based on the rules set down in the Constitution. When the Football West Constitution was last amended back in December 2006 there was NPL, so the NPL Standing Committee is not listed. Yes, under the by-laws Football West could create such a committee, but as for voting rights only those listed in the Constitution, which is a legal document, can vote. If they do vote at the AGM then the AGM risks being voided if people protest.

In addition to this fact the Chair of  NPL Standing Committee Peter Koulizos was made a Life Member of Football West in 2014 and therefore would have been disqualified from voting. In the Constitution its states under Section  9.6 Rights of Life Members:

(a) is not to be counted in a quorum under article 5.1;

(e) is entitled to attend and speak at general meetings;

and (f) is not entitled to vote at any general meeting.

With a new season fast upon us, the game should not be focussing on breaches of the Corporations Act or constitutional issues, yet sadly it is. Why? Has the Board failed to make sure that due process is followed and everything is done according to the law? Should the FFA have had someone monitoring this? Or have the members of the various Standing Committees, who are elected to represent the masses, dropped the ball?

There will undoubtedly be finger pointing, as this should never have occurred. The question is will anyone be held accountable legally, and by the sport, and if so what will be the consequences?

 

 

 

Another Fine Mess

One thought on “Another Fine Mess

  • January 8, 2016 at 8:42 pm
    Permalink

    Well fact there was no AGM. I checked the Corporations Act and you are right they have broken the law and the penalties can be heavy. There is no doubt that someone has to be held accountable. The question is who? The Chairman should step down and the Standing Committees who hold the power need to use that power and make much needed changes. This is a chance for the game to get back ohm the right track. Let us get a board who can control the CEO and act in the best interests of the game in this state and not just follow orders from the FFA. Standing Committees stand up and be counted!!!

Leave a Reply

Your email address will not be published. Required fields are marked *