In Baseball you have three strikes and you are out.
In the modern-day workplace if you receive two warnings, a third indiscretion sees you shown the door.
It would appear that in society, and in sport, the feeling is if you cannot get it right at the third attempt then you are moved on.
The year 2017 has come to an end and we find that once again, for the third year in a row, Football West has failed to hold an Annual General Meeting in a Calendar year.
This was an issue that we raised at the start of 2016 when one was not held in 2015. (Another Fine Mess) Incredibly Football West lodged an application for an extension from ASIC on January 11th three days after this piece was published, which would tend to indicate an admission of the error of their ways. ASIC, who under Australian Law should NOT have issued an extension, because the request came after the end of the Calendar year somehow found a way to issue one. Attempts to find out who authorised such an extension and how it was issued outside of the laws of the land were not answered.
A year later at the end of 2016 Football West again failed to hold an AGM in its calendar year. An issue we covered in Starting Over in 2017
To some this may not appear to be a major issue, however it is, and twice now the powers that be have not been punished for breaching the Corporations Act.
Section 250N of the Corporations Act 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, and also lawyers it has been confirmed that the section does not offer an alternative. Even though the 2016 AGM was held in 2017 an AGM should have been held before the end of the year to cover the Calendar year of 2017.
Where Football West may be confused is due to the changing of the end of their Financial year. As stated they must present their Financial report within 5 months of the end of the company’s financial year. So the Financial Report must now be presented before the end of March. According to ASIC and the lawyers we spoke to if they choose not to present the Financial Report until the end of that five month period, it is very clear, they must hold the AGM before the end of the year, and then convene a second meeting to present the Financial Report after the end of the calendar year but before the end of March 2018.
Having checked with ASIC, once again, as has been the case in the past two years no application for an extension has been lodged before the end of the Calendar year.
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. Certainly failing to comply with the Corporations Act three years in a row would be “regarded as a serious breach” according to those that we approached for their expert opinion.
So who is responsible for making sure that the AGM takes place in a Calendar year?
According to the lawyers we consulted the responsibility falls to the Chief Executive Officer as they are ultimately the head of the company and charged with running it under the laws of the country. However the Board are also culpable as their role is to “ensure corporate governance duties including legal, regulatory and financial obligations.”
Interestingly, the lawyer advised that if in the Board minutes one of the Directors has queried why the AGM has not been held within the Calendar year, and that query is recorded along with their name and any who supported the question, they may be excused as there is a record of them trying to enforce the laws of the land. If no such question has been aired all Board Members are responsible for the organisation failing to meet Australian Governance requirements.
Despite the structure of Football West, which sees Zone Representatives and Standing Committees representing “The Members” – the clubs, referees etc as per the Constitution, – and supposedly steering the organisation in the direction that “The Members” wish, the lawyer stated that legally they were not responsible. However they went on to add that “morally, they are responsible.”
The reason for this comment was explained thus, these people are elected to represent “The Members” and therefore they should on behalf of those they represent be asking for the AGM to take place within the Calendar year, and certainly demanding an explanation as to why one is not taking place in the required time-frame.
Sadly as all close to the game know, these volunteers who represent the clubs are not given an induction manual when they are elected which outlines their responsibilities and duties, so that from the start they know what is expected of them. Few have taken the time to familiarise themselves with the Constitution. We also know that many of these committees have failed to keep minutes of their meetings. So to expect them to be applying pressure in relation to the AGM being held when it is supposed to is unrealistic.
According to the lawyer we consulted had the Board, and those representing “the Members” been on top of things the CEO would have had no option but to convene an Annual General Meeting in the required time.
Having found itself in this position for a third year running, will anything change? Will ASIC take action this time around? Will the Department of Sport and Recreation show more interest than they did a year ago, when they wanted nothing to do with the issue?
With such a laissez-faire attitude is it any wonder that the game is where it is?
Maybe, just maybe, FIFA and the AFC will look deeper than just the governance issues at the FFA and will dig deeper and we will see reform at all levels across the country in 2018. WE can but live in hope.