In this help sheet series, Our Community’s resident agony uncle, Chris Borthwick, offers answers to frequently asked questions about issues not-for-profits are facing.
I had a telephone inquiry recently from the chair of a community centre board asking about a forthcoming annual general meeting, where some fireworks were expected over nominations that may not have complied with the board’s recruitment policy. As usual, I said that it all depended on what the constitution said. The questioner didn’t have the constitution handy, so she emailed it to me.
The first issue, as always, was a question not of what the policy said, but of who could vote at the AGM on whether the policy should be enforced. There was, it seemed, some question of branch-stacking. Were these unexpected new members able to vote on the day? The constitution provided the test:
“As soon as practicable after the board makes that determination [as to membership], the secretary must: … notify the nominee, in writing … that the committee approved or rejected the nomination (whichever is applicable)…”
So the Board had to approve nominations. Here was a possible corrective.
Had the new members’ applications been approved by the board in time for the meeting? I put this to her. No, she said, they hadn’t been… because the board never approved new members. If they paid their subs, that was it.
Ah. So the board’s own memberships were defective. This was not necessarily a practical problem provided nobody drew attention to it – they’d been doing all right for 25 years, after all – but it was not a strong base from which to raise questions about other people’s membership.
That meant, anyway, that constitutionally speaking the only legitimate members were the founding members, who’d been members when they all applied for incorporation. Could we round up any of them? For how many years had the centre been going? Twenty-five, apparently.
Strictly speaking, then, the centre had no members at all.
Up to this point, our discussion had been more or less standard. An extraordinary number – and an extraordinary proportion – of small associations whose constitutions are based on the model rules ignore the clear dictates of their governing principles. The model rules specify that all members must be approved by the board.
While the chair did not welcome the news that the organisation technically had no members, it was not a surprise to me. So, was there time before the AGM for the board (just for the moment postponing any questions of its own legitimacy) to meet and approve memberships?
And here we graduated into a whole new world of pain.
On closer examination, the constitution didn’t actually refer to members at all. Wherever one would expect to find the word “member”, one found instead “delegate of a member”.
What that meant was that the constitution envisaged that organisations would join as members and that each member organisation would nominate a delegate to be a member of the centre, as the peak body:
“On any question arising at a general meeting of COUNTRYTOWN COMMUNITY CENTRE INC. the delegate of a member has one (1) vote only, delegates of members in association and individual members have the right to speak in debate on any resolution but do not have the right to vote.”
This represented a problem, because for 25 years the centre had had only individual members and no organisational members. For 25 years the centre had been operating under the wrong constitution, one that was utterly inapplicable. And it wasn’t possible, under the constitution, to remedy the situation, because there wasn’t, and couldn’t be, anybody who was entitled to vote through that remedy.
Luckily, the centre had called Our Community. And because we’re not a government agency, and because we’re not lawyers, we were able to summon the fairy of botch-ups, beautiful fairy Goodenough.
And fairy Goodenough waved her magic cursor over the constitution and said the magic words:
If you’re in a constitutional bind, and you want to extract yourself, just work out where you want to be and go there. In this instance, just pretend you have members, and a board, and hold a special general meeting and vote to change the constitution. Once it’s done – provided that, as here, it’s done bona fide, without advantaging any side in any ongoing arguments – nobody’s going to argue.
Nobody – not the regulator, not the courts – has any interest in pushing you to extremes just because somebody made a mistake 25 years ago. If the worst came to the worst and anybody did take it to court, the court would almost certainly just send it all back to be sorted out at a general meeting, which is what you’re doing anyway, so what would be the point?
However. That doesn’t mean that once every now and again – once every 25 years, say – it wouldn’t be a good idea for someone in your organisation to READ YOUR CONSTITUTION AND SEE WHAT IT SAYS. Honestly.
Constitutions are like airbags. For 99.999% of the time you don’t need them at all and you can just leave them in the glovebox. But it’s always possible that a moment might come when you need them very badly. And at that moment – take my word on this – you really want them to be fit for purpose.
And what about the original problem of the dodgy nominations? Well, after everything else we’d discovered about the constitution, this particular point didn’t seem quite as important any more. We decided to let them all stand and let the membership sort it out.