When Australia was bidding to host the FIFA World Cup one of the many areas that FIFA said the Football Federation of Australia had to sort out, was ensuring that each State Federation had the same constitution which was in line with the FFA’s own constitution.
If you take the time to read the various constitutions you will find that the basics are the same in everyone, there are a few differences in some cases simply in relation to the way the game was set up in those states and territories.
At the start of January as reported in “Confusing Times for All” a lawyer specialising in Contract Law advised Not The Footy Show that the key issue was who owns Football West. The company is registered as a Pty Ltd which is the usual set up when a company has shareholders or a group of owners. This is why a Constitution is set up, to give those Shareholders the opportunity to vote and if they want sack a director of the company. The lawyer said that without knowing who owns Football west it makes the Constitution almost pointless. In fact in his opinion the words that we refer to as a ‘constitution’ are in fact merely by-laws, rather than a constitution.
If these were by-laws they would be a great deal easier to change than they are as a constitution, although this is still not as hard as many would have you believe.
Requests have been made in the past to the Board of Football West for amendments to be made to the Constitution but all have fallen on deaf ears. One that was raised in the Annual General Meeting of 2008 was that the term of Board Members be altered to a more standard two or three year term rather than the exisiting four year term. Kevin Campbell who was the original Chairman, and who presided over that AGM admitted that the four year terms had been put in place to give the organisation stability in its early years, and agreed that a three year term would be more reasonable. However he never instigated the change.
With the transformation of the State League Premier division to the National Premier Leagues in 2014 and the setting up of a NPL Standing Committee, it was again put forward that the Constitution be amended to reflect the new entity and to enable them to have a vote as Members of Football West. Once again no amendment to the constitution was made so the NPL clubs have no vote when it comes to an AGM or any other General Meeting, as they are not legally Members of Football West on account of the Constitution not being amended.
The second of these two issues is to many a fairly important amendment. Why has it not been done?
It is fairly simple for an amendment to be made “a company may modify or repeal its constitution by special resolution of shareholders or members, being a resolution passed by at least 75% of votes.” However “a company constitution may not be amended pursuant to the power in section 136(2) of the Corporations Act if the constitution specifies additional requirements that must be complied with before any amendment is effective.”
Section 136(2) of the Corporations Act reads:”The company may modify or repeal its constitution, or a provision of its constitution, by special resolution.”
Yesterday it was revealed that Football West is seeking to seek a special resolution for the first time since December 19 2006, but not to give the NPL Standing committee and therefore the NPL clubs member status, but so that the current Chairman Mr Liam Twigger can stay on beyond his two terms as a Director, and remain as Chairman.
The proposed change to the constitution shows a complete lack of understanding of the constitution, despite Football West stating that they sought advice from the FFA’s lawyers. The constitution is not there to serve individuals, but to serve the game as a whole, now and into the future. So why would you want inserted into a legal document the following rather than a basic outline of the rules be adhered to now and into the future? When Not The Footy Show showed the proposed wording to a lawyer, they laughed at it.
The proposed is as follows:
“10.12 Exception to article 10.11
a) Despite article 10.11, but subject to articles 10.12(b) and 10.12(c) Liam Twigger is eligible to stand to be elected as a Director for a third consecutive four year term at the annual general meeting related to the financial year ended 31 October 2016.
b) If Liam Twigger is elected as a Director for a third consecutive four year term at the annual General meeting related to the financial year ended 31 October 2016 and he is elected as Chairman in accordance with article 10.3 following the annual general meeting related to the financial year ended 31 October 2016, then Liam Twigger is eligible to serve one further consecutive four year term provided always that he holds the position of Chairman at all times during that term. After the end of that further term Liam Twigger may not be elected again as a director until the second subsequent annual general meeting.
c) If Liam Twigger is elected as a Director for a third consecutive four year term at the annual general meeting related to the financial year ended 31 October 2016 and he is:
i. not elected as Chairman in accordance with article 10.3 following the annual general meeting related to the financial year ended 31 October 2016 then Liam Twigger ceases to be eligible to serve the one further consecutive four year term and he must resign effective immediately.
ii. elected as Chairman in accordance with article 10.3 following the annual general meeting related to the financial year ended 31 October 2016 and then subsequently ceases to hold the position of Chairman at any time during the third consecutive four year term, then he must resign effective immediately.
In such circumstances Liam Twigger may not be elected again as a Director until the second subsequent annual general meeting.”
First of all to those who have read by-law and constitutional documents when have you ever seen an individual circumstance ever included? Secondly, the reason that by-laws and Constitutions are in place is to protect the organisation from people staying on the board ad infinitum. When one considers that it is in the business world it is accepted that a CEO should move on after serving seven years, so that fresh blood can carry the company forward, it is understandable why with Directors should only be allowed to serve no more than two four year terms as written into the constitution. They can only serve two consecutive terms in office.
On social media the question was asked as to why Mr Twigger should be afforded the privilege of another four year term. A very valid question and it is surprising that a list of his achievements since taking over the Chairmanship from Bob Kucera in 2013 has not been released to back up his case.
Of course there are negatives as well as positives during his time as Chairman. One fairly major one being the fact that no Annual General Meeting was held within the calendar years of 2015 and 2016, as is a requirement under the corporations act. It has not been announced but apparently the Board believe that the AGM can be held when they present their financial report which has to be presented five months after the end of the financial year, but as explained in “Starting Over in 2017” this must be held in the calendar year.
Then there was the debacle in relation to promotion and relegation to and from the State League to the NPL, at the end of the 2016 season. When this was sorted out, and it is understood the Board were heavily involved in this process, did the board not ensure that the competition rules for the 2017 were an administrative top priority and that they were in place before the start of the 2017 NPL season? As it is the clubs have foolishly started the 2017 competition still with no clear understanding as to how the season will finish, and whether there will be two teams going down and none coming up or what.
The fact that this amendment is being put forward tends to show that the Board lacked forward planning. Surely knowing that Mr Twigger’s term was approaching an end another Board member was being groomed to take over as Chairman? Is that not what most organisations do? Or was it felt it would be a given that Mr Twigger would remain as Chair?
Football West is not alone when it comes to organisations having Board members becoming too involved in the day to day running of the company. Articles have been written on this topic and question why a CEO is paid a high salary if the Board are in fact the ones making the over-riding decisions. The CEO implied over the junior NPL issue, which should have been sorted by the various Standing Committees and Football West administration, that the decision had come down from the Board. Is this appropriate? The Board is there to ensure that the company is run properly, to help steer the company in a direction that will benefit all in the long term and ensure fiscal probity.
At the end of the day one has to ask why only one amendment is being put forward to the Constitution when there are plenty of other parts that could be amended at the same time and thus give it more clarity? It is sad that this is the only amendment that is felt worthy of an extra General Meeting. Surely the NPL Standing committee deserve to be made a Member of Football West? However, if that did happen it is worth noting that they would have to replace their current chairperson, because as a Life Member of Football West the current Chair is not entitled to vote on Football West issues, as per the Constitution.
It is now over to the members as to what they decide. If they accept the proposed wording then once the amendment is passed it would be effective immediately and Football West would be required to register the change with ASIC within 14 days.
There is however a but, one area that could be a stumbling block and which highlights how ambiguous the current Constitution is worded is section “7.1 Constitution and By-laws.” This reads as follows:
“(a) The Members must amend this Constitution, and the Directors must adopt, revoke or amend the By-laws, to promptly adopt changes in the model constitution and by-laws promulgated by FFA from time to time.
(b) The Members must not otherwise amend this Constitution and the Directors must not otherwise adopt, revoke or amend any By-laws, without the consent of FFA.”
Football West has advised the Members when they sent out the proposed amendments that they had “sought legal advice from FFA’s Lawyers with regards to resolving the issue” of Mr Twigger being given another four years as Chairman. They go on to say “Both Football West’s and the FFA’s constitution require that amendments to Football West’s constitution are approved by the FFA Board. Such approval was given, subject to wording provided by Business and Legal Affairs at FFA.”
What this means is that the FFA Board has approved the exact wording being presented. If the members of Football West request any change to the proposed wording and all vote on that wording to be amended, Football West will need to seek FFA approval, from the FFA Board, before the Constitution can be amended. Which would mean, with the AGM one hour after the General Meeting, Mr Twigger would not be able to stand for a third term even if in principal the clubs were in favour of the proposal.
Some may question the fact the FFA Board were happy to approve such a change? That in itself is a whole new can of worms.
It should be a very interesting evening, and one in which the Chairs of the Standing Committees and Zone Reps may appreciate just how important their role is in carrying the game forward and the responsibility they have.