Starting Over in 2017

If a striker continually finds himself offside, or a goalkeeper keeps dropping the ball the chances are the coach will drop the player concerned. Yet somehow when it comes to the administration of the game of football the same mistakes can continually be made, and no one is held responsible.

“You can never make the same mistake twice because the second time you make it, it’s not a mistake, it’s a choice,” is a quote attributed to Business Broker Steven Denn, and it is hard to disagree with him.

Football in Western Australia had one of its lowest moments at the end of 2016 with the debacle surrounding relegation and promotion from the State League to the National Premier Leagues of WA. It was a situation that no one wants to see repeated. Therefore one would expect all of the rules and regulations for the coming season to be looked at promptly, adjusted and signed off before the start of the extended new season in 2017; the league has been expanded from 12 to 14 teams. Yet the clubs have apparently been advised that the review will not be completed until late April, when the new NPL season will have already started! Why the delay, and why would the clubs agree to kick off another season before everything is in place and agreed upon?

This does not come as a surprise to many followers of the game, as it is regularly a case of deja-vu when it comes to football in WA.

Take for instance the matter of an Annual General Meeting. In 2016 Not the Footy Show ran a piece titled “Another Fine Mess” which highlighted that Football West had broken the law by failing to hold an Annual General Meeting in the calendar year of 2015, and had lost the right to request an extension.

Incredibly Football West applied for an extension on the 11th of January three days after our article was published and the Australian Securities and Investment Commission (ASIC), who had advised that no extension could be granted now the year had passed, did in fact issue an extension on the 25th of January 2016.

The Corporations Act states in section 250P that an extension can only be granted if “If the company applies before the end of the period within which the company would otherwise be required to hold an AGM, ASIC may extend the period in writing. ASIC must specify the period of the extension.” Football West were bound by the Corporations Act to hold their AGM before the end of the calendar year 2015. They did not apply for an extension until after 2015 had ended, therefore ASIC did not have the power to issue an extension under the rules laid out in the Corporations Act.

After that happening at the end of 2015 who would believe that Football West would then in 2016 make exactly the same mistake again, and not hold an Annual General meeting? Can you remember the quote above? “You can never make the same mistake twice because the second time you make it, it’s not a mistake, it’s a choice.”

A call to ASIC at the start of 2017 confirms that no application for an extension has been lodged at the time of writing, and as they did in 2016 they confirmed that despite holding the 2015 AGM late, and in 2016, Football West were obliged under the Corporations Act to hold their AGM for 2016 before the end of 2016.

No doubt Football West will once again apply late for an extension and no doubt ASIC will break regulation protocols and issue one. The Department of Sport and Recreation will again shrug their shoulders and say that as far as they are concerned there is nothing untoward despite Football West receiving over $2.7million in registration fees from members of the public, and just under half a million from referees. Surely all these people deserve the organisation to adhere to Australian law?

Where the board may feel they have a leg to stand on is the fact that they moved their reporting period for financials to the end of October, rather than as it had been in the past, September. The Corporations Act states that the Accounts must be presented within five months of the end of the financial reporting period. So now they must be presented to the members by the end of February 2017.

Section 250N of the Corporations Act is very clear about the legal situation. 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 requested a legal opinion and spoken to ASIC both parties have advised that the AGM MUST be held in the calendar year, and if the accounts are not ready in that period then a seperate meeting must be convened within that five month period to present the financials. So the Financial Report must now be presented before the end of February 2017 but the AGM must still be held in the calendar year.

This is the second year in a row that no AGM has been held in a calendar year, it is also the second year in a row that no request for an extension has been lodged before the end of that reporting period. This is a serious breach of the corporations Act, not once but twice. Just to show how serious these offences are, the penalty for failing to hold an AGM is a Criminal Act and a fine or three months in prison is the penalty.

It will be interesting to see if anything happens in relation to these breaches.

When the AGM does eventually come around there will be more things for the Members, the Standing Committees and Zone reps to consider, as there should be a complete overhaul of the Board under the rules of the constitution.

Interestingly the new Football West website no longer has the Constitution available, (Lucky we saved a copy) neither does it list the Board members and when they were appointed.

In the Football West Constitution Under “section 10.16 Appointed Directors” it states:
“(c) An Appointed Director hold office for a term of two years or such shorter term as may be determined by the Directors, and subject to approval by the Nominations Committee under article 10.21, is eligible for re-appointment.”

This means that all three appointed Board members must step down. Sherif Andrawes was appointed in July 2012, and should have actually stepped down by now. Rob Mackay was appointed after having served two terms as an elected Board Member in January 2015. Anna Liscia was appointed in 2014.

When we look at the make up of the elected members of the Board, under the constitution half of them must be rotated. Under section 10.7 Rotation of directors it states:
“(a) Despite article 10.6, at the annual general meeting relating to the financial year ended 30 September 2006 and at each second subsequent annual general meeting one-half of the Elected Directors must retire from office.
(b) If the number of Elected Directors is not a whole number which is a multiple of two, the number of Elected Directors is to be rounded down to the next whole number.”

It is important to remember that any AGM held at the start of 2017 will in fact be the one relating to 2016, which falls in that two year cycle.

Ms Janette Spencer comes to the end of her two allowed periods of four years on the Board, so must step down.

Chairman Liam Twigger was also elected in 2008 and to some it may appear that his two terms of four years have passed, and so he must step aside as well, but as he was appointed Chairman in 2013, when Bob Kucera stepped down, he has not served two full terms as Chairman.

Under section 10.12 of the constitution looking at exceptions to the rule when it comes to the stepping down of Directors its states:
“(a) if an Elected Director has served two consecutive terms as a Director but has not served as Chairman, or has served only one of those terms as Chairman, that person is eligible for election as Chairman for one further consecutive four year term. After the end that further term, they may not be elected again as a Director until the second subsequent annual general meeting;”

So if he wishes to stay on as Chairperson, and the Board wish him to hold such a position, Mr Twigger may remain in the role for another four years.

What it would mean however is that the next longest serving member of the elected Board members would have to step down even if they have not reached the end of their second four year term. As the constitution states “one-half of the Elected Directors must retire from office.”

With three Board members having to step aside Deputy Chairman Henry Atturo who was appointed in 2010 would be one who would be forced to step down. Along with him must go one more of the appointed Board members, as there are currently six appointed members.

Mr Lui Giuliani was appointed to the board when Mr Kucera stepped down in 2013 but was only elected at the AGM in 2014 along with Mr Gary Adshead and Mr Jason Petkovic. Some would argue that Mr Giuliani is therefore the one who should step aside, however as it is based on how long each member has served as an elected Board Member, it will come down to who of the three wishes to step aside, or which is voted to leave.

Of course throw into the mix that with three Board members stepping down there must be advertisements for applications for three new Board members to be published, then under the the Constitution due process must be followed:

“(a) A Member or a Director may nominate a person to stand for election as a
Director (Proposer).
(b) Another Member or Director must second the nomination (Seconder).
(c) A nomination must be in a prescribed form as determined by the Company and signed by the Proposer and Seconder and delivered to the Company no later than a date specified by the Company in any year in which an election of Directors will be held in accordance with this Constitution.
(d) The nomination must be accompanied by a statutory declaration made by the nominee confirming that, to the best of their knowledge and belief, they are not disqualified from standing for office as a Director by virtue of anything in article 10.4.”

A Nominations Committee needs to be created and they must vet the applications and if necessary interview those who have been nominated prior to the AGM to ensure that they meet the required criteria, and are not involved with any clubs in Western Australia in any official capacity.

This is yet another reason why the failure to hold the Annual General Meeting in the calendar year is such a major issue. It means that everything is pushed back and opens the game’s governing body to possible legal challenges. Not again many will say. However, sadly it does as any decisions made now, after the past year has come to a close, and Board members terms of office have legally expired, decisions made can be challenged as being unconstitutional.

One has to wonder how twelve months down the track the game finds itself having not learned the lessons of a year ago and has once again not held an AGM. Why have the Standing Committees and Zone Reps not questioned this fact?

We are only three days into 2017, but surely the running of the game has to improve. Hopefully in 2017 more people with an understanding of the legal meaning of a Constitution will find voice or be elected to the vacant positions on the board, and we will find the game, and the various competitions run according to the rules that have been put in place to safeguard both.