EMRC COMMENT ON PROPOSED ARTICLES OF ASSOCIATION

 

We would hope that by now all members will have had the opportunity to read and digest the content of the proposed new articles of association distributed to the membership with the September issue of Pull magazine.  As it was the complaint made by EMRC against the Board which was the catalyst for this change we feel it is appropriate for EMRC to comment on what is being presented.

 

At the outset we should say that at the conclusion of the hearing which dealt with our complaint Mr Casement QC identified that shortcomings in the current Articles were a contributory factor to the complaint insofar as they did not clearly lay down a procedure for dealing with the election of Chairman where there was more than one candidate and he recommended that the Articles be amended to incorporate that change.  Further contributory factors were the one-sided, biased statements issued in the media by the Board (which he said had generated a significant amount of heat) and the failure of the then Chairman to relinquish the Chair when the subject matter of the discussion centred on a point on which he of all the Board members had the most to gain.

 

We mention this case again not simply to go over old ground but to demonstrate that whilst EMRC complaint may have been the catalyst for change the changes now proposed are in fact very far removed from that which was envisaged by EMRC. 

 

The changes are put to the members on the basis that they represent the good governance necessary to inspire confidence in our constitution principally, it seems, aimed at the public bodies that control lottery funding.  EMRC are not against change if it will strengthen the Association but we feel that the Articles now presented incorporate changes which will not benefit the members of the Association and give absolute power to Board members who have demonstrated an inability to exercise good judgement.  We feel that the key to a stronger Association is attracting the right Board members with the appropriate level of skills and expertise who are capable of leading the Association with much better judgement than has been demonstrated in the past.

 

There has been much written, principally by our CEO, to commend these Articles to you.  The argument is that Board members have always been and will continue to be elected by the members, so control of the constitution of the Board is in members’ hands therefore the duly elected Board members should be given absolute power to run the Association as they see fit.  In an ideal world no-one could fault this logic – it is after all how our government is chosen and if it is good enough for them it should be good enough for us.  However we are unfortunately not in an ideal world and it is a fact that the majority of the current Board have never been elected by the members but have simply walked into a vacant position because no-one else wanted the job.  The membership have no idea what particular skills these unelected Board members bring to the job and have no idea what their previous experience of running a business is consequently are not in a position to judge whether their abilities make them fit for purpose.

 

EMRC have been involved in the consultation process, as have the 4 other regions of the CPSA.  We have put forward a wealth of recommended alterations some of which have been incorporated.  However there are still key issues which have not been addressed as follows:

 

Election of directors

 

a)     We do recognise the need to bring in additional skills to the Board but we do not endorse the proposal that the 2 independent directors be appointed by the Board.  We propose that the Board select the appropriate candidates and then submit their recommendations to the membership at the AGM for members to ratify or not.

b)    Provision should be made so that any candidate for an uncontested vacancy is put before the members and voted on so that the membership is completely satisfied that the candidate is appropriate for the position.     

c)     We do not concur with S22(d) that the Board may remove any Board member  (if found to be in breach of the directors’ Code of Conduct).  The Companies Act already prevents a person who has acted illegally from being a director so there is no need for this provision on those grounds.  The directors’ code of conduct can be open to interpretation and could result in an elected director being removed simply because the other Board members don’t like him/her or can’t work with him/her.

 

We believe much more could be done to promote a directorship which would encourage more members to come forward.  The skill sets are out there and are being used by the regions and the counties perfectly satisfactorily but there is a resistance amongst members to commit to a Board position largely due to how disconnected the Board is perceived to be.

 

Appointment of Chairman

The EMRC are specifically against the proposal for the Board to elect the Chairman (and Deputy Chairman) and have consistently stated so throughout the consultation period.  As the Board is constructed at present with some 80% of the Board members being unelected the members only method of exerting some influence, albeit limited, is for them to elect a Chairman of their choice.  Mr Casement’s recommendation was that the Articles be changed to incorporate a procedure, where there was a choice of candidate, for both candidates to be identified, and both candidates’ profiles to be given equal publicity so that members could make an informed judgement and vote accordingly for their preferred candidate.  His recommendation specifically did not include removing this right altogether

 

Proxy forms and their use

We do not approve of the presented format for the following items:

 

a)     The inclusion of a paragraph which caused the proxy to default to the Chairman caused great controversy at the adjourned AGM in March and the proposal to adopt a proxy form with this default clause included was firmly rejected by the membership.  It was made clear to the Board at that time that this was not acceptable as it could clearly be open to abuse particularly when coupled with the next item.  EMRC have suggested that an Electoral Officer (not a Board member) be appointed who could also act as the default proxy to ensure there is no conflict of interest.

b)    “The Chairman of the meeting may vote or abstain on ancillary or procedural resolutions put to the meeting”.  As ancillary and/or procedural resolutions will not be known in advance of an AGM a member will be unable to specify on his proxy form which way he wants to vote.  The proxy will then default to the Chairman who will vote as he wants which may not be what the member would have wished.  Again there is a clear conflict of interest which is prejudicial to members.

 

At the first consultation meeting in June the factor of distrust and lack of confidence in the Board was identified.  The answer we received to that was that “it needs to be built up over time and there has to be leeway given on all sides”  We do not perceive that the Articles now presented, which convey absolute power to the directors, as an example of leeway being given by “all sides”.  We have made the point that we do not feel the time or the climate is right now for such sweeping changes to be made and the Board should look to build a better relationship with members first so that members can embrace changes such as those now proposed with full confidence that the Board is indeed acting in the best interests of them and the Association.  

 

We are putting these points again to the Board in the hope that the 3 key issues listed above can be incorporated into the Articles before they are presented to the members on 19^th October.  We will keep you advised of any progress made and ultimately let you have our opinion of the final position.  This will enable you to use your vote wisely and ensure that whichever way you vote IT IS YOUR DECISION.

 

Finally you will be aware from our EM website that the Board have refused to co-opt Clive Hames, the candidate chosen by EMRC, to fill the vacancy left by Colin Butler’s resignation.  This is against all past protocols for dealing with such matters but we are entirely powerless to do anything about it.  The least fractious way of dealing with it would have been to have accepted ours/Clive’s offer to be co-opted for the short 3 month period leading up to the EGM but this was declined by the Board so EM region at present has no formal representation on the Board.  If anyone has any comments to make or opinions they wish to put before the Board please either contact the Board/CEO direct or forward to EM Chair Janet Stennett (janetstennett@btinternet.com) or EM Secretary Colin Butler (colincpsa@yahoo.co.uk).  In this way we can make sure that your voices are heard and your opinions are taken into account.

 PLEASE DO NOT WASTE THIS OPPORTUNITY TO HAVE YOUR SAY.