SSAA Constitution proposed changes

21-Aug-2017

Mob in Hand

EXPLANATORY STATEMENT

The Constitution is the principal document governing the structure of the SSAA and its activities.  A review of the Constitution has been undertaken which identified certain deficiencies, and lack of clarity in both drafting and the operation of the provisions.  The Board therefore proposes that the document be replaced to ensure compliance with the SSAA’s status as a not-for-profit company limited by guarantee, consistency with the Corporations Act 2001 (Cth), and to address a number of drafting issues.  The Board believes that the replacement Constitution is a simpler and more easily understood document, which sets out the essential provisions applying to the SSAA in a more logical way.

The specific provisions that are unique and integral to SSAA’s structure have been retained. There are 13 proposed changes detailed below, including the following:

  • the Objects of the Company;
  • the Membership structure and rights attaching to the different classes and categories of Membership.

A summary of the key changes is explained below. All references being to those rules contained in the proposed new Constitution.

If you have any queries that you would like answered please email ceo@selfstorage.com.au or call me on 03 9466 9699.

If you are unable to attend the AGM you can still vote by proxy. Click on the link to download your Proxy Voting Form.

Susan Phillips
CEO

Summary of Changes –

1. Objects – revised and expanded to better reflect the scope of the objects of the SSAA

2. Not-for-profit status: Application of Income & Winding up - application of income has been amended and expanded to make it clear that the income and property of the Company may only be applied to the promotion of the Company’s objects, consistent with the Company’s status as a not-for-profit entity

3. Powers of the Company - a standard provision that sets out the powers of the Company.

4. Membership Classes & Categories - Membership classes are set out in a simpler and more easily understandable way

5. General Meetings - The provisions relating to General Meetings have been rationalised to remove the duplication in the current Constitution.

6. Directors & the Board - sets out the composition of the Board, the operation of current rule 18.2 being unclear in practice. The Directors elected by Members in their categories remain unchanged.

7. Director rotation - The Current Constitution does not provide for staggered rotation/retirement of Directors, which allows the Board to manage Board composition and succession.

8. The Chair - The current provisions dealing with appointment of the Chair were unclear and inconsistent in their operation.

9. Material Personal Interest - Rules 14.4 to 14.7 have been inserted in relation to material personal interests to reflect the law and best practice governance.

10. Proceedings of the Board - These provisions have been rationalised and simplified to accord with best practice.

11. Consistency with Corporations Act 2001 (Cth) -

  • The Company must have a Company Secretary, rule 17.
  • Revised provisions relating to keeping of minutes, rule 19
  • Execution of documents, rule 20
  • Common seal, rule 21

12. Notices - These provisions have been consolidated and simplified.

13. Indemnity & Insurance - The Officer indemnity provisions have been updated and simplified to reflect the current state of the law.

Proposed changes in detail

Objects

Rule 2.1 sets out the objects of the Company. This provision has been revised and expanded to better reflect the scope of the objects of SSAA, but does not change the essential nature of those objects. The revised Objects are as follows:

1. The Objects of SSAA are to:

  • (a) promote excellence and high standards of service in the self storage industry and associated businesses, by its Members and the industry generally;
  • (b) support Members through facilitating information exchange, advocacy to government and regulatory bodies, education, and Member benefits and services; and
  • (c) engage Members through events and other activities, and foster a strong, supportive network of like-minded businesses.

2. Not-for-profit status – Application of Income & Winding up

Rule 3 in relation to application of income has been amended and expanded to make it clear that the income and property of the Company may only be applied to the promotion of the Company’s objects, consistent with the Company’s status as a not-for-profit entity. A new Rule 3.2 has been included which sets out the standard circumstances in which certain payments may be made, including payments to employees for services rendered, Director remuneration and payments to Directors for out-of-pocket expenses.

Rule 26 – Winding Up - replaces the current provision which does not comply with the requirements for not-for-profit entities, specifically that any surplus on winding up must be transferred to an entity with similar objects. Rule 26 is a standard clause which provides that in the event of winding up or dissolution any remaining assets must be distributed to a fund, authority or institution with similar objects or purposes, which is also not-for-profit. This determination is to be made by the members, or failing that, the Supreme Court of Victoria.

3. Powers of the Company

New Rule 2.2 is a standard provision that sets out the powers of the Company.

4. Membership Classes & Categories

Membership classes are set out in a simpler and more easily understandable way in rule 5.1. Certain amendments to the criteria for each class have been made for clarity and to remove inconsistencies, but the substance of the criteria applying to each Membership class has not been changed.

The terminology for “Past Member” has been changed to “Associate Member”.

Rules 5.2 and 12.1 deal with Membership categories for the purposes of nomination and election of Directors, the categories are now labelled A, B, C, D and F for ease of reference.

The rights of Members are now set out in rule 5.4 – these rights (current rules 5.2 to 5.7) have not been changed. The right to receive SSAA periodicals and magazines cannot be characterised as a constitutional right, and these references have been removed, however these remain as a privilege of SSAA membership where applicable.

Rule 5.7 is a new provision to clarify that where a person meets the criteria of two Membership Classes, they may apply for Membership in both classes. In such a case, that Member will be a Member in two capacities, they must pay Membership Fees applying to both Classes, and they may exercise the rights of both Classes, including the right to nominate and vote for Directors in certain categories (where applicable).

5. General Meetings

The provisions relating to General Meetings have been rationalised to remove the duplication in the current Constitution. Rule 10 deals with General Meetings, and the provisions have been updated and clarified to be consistent with the Corporations Act. The current provisions dealing with the conduct and business of general meetings have been removed, as these are overly prescriptive and in any event, are regulated by the Corporations Act and the general law.

The quorum for a General Meeting (Members entitled to attend and vote present) has been changed from the current number of 25 to the number of current Directors in office, plus five.

New rule 11.7 deals separately with Member voting by ballot in certain circumstances (currently dealt with in rules 15(b) and (c)), and provides that a ballot may be conducted in writing (postal) or electronically.

The provisions dealing with proxies have been modernised and simplified, rules 11.8 to 11.11, and the Constitution now provides that a Member may appoint any person as a proxy (current rule 15(h) restricts appointment to another Member).

6. Directors & the Board

Rule 12.2 sets out the composition of the Board, the operation of current rule 18.2 being unclear in practice. The Directors elected by Members in their categories remain unchanged.

Rule 12.2 also provides for up to an additional four Directors that may be appointed by the Board. Current rule 18.2(i) also permits the appointment of additional Directors to the Board, and the new Constitution expresses this more clearly. This provision provides flexibility for the Board to recommend persons with appropriate skills and expertise that will benefit the Company and Members as a whole.

The power of the Board to appoint a person as a Director to fill a casual vacancy is set out in rule 12.5. Where the vacancy is in respect of a Director elected by a Member category, that vacancy must be filled by a person eligible to be elected in that category, rule 12.3(b).

References in the current Constitution (current rules 18.2(f) and 19(d)) to elected Directors representing categories have been removed as these are inconsistent with the law relating to directors’ duties, including that a Director must act in the best interests of the Company (the Members) as a whole.

Director rotation – Terms

The current Constitution does not provide for staggered rotation/retirement of Directors, which allows the Board to manage Board composition and succession. The rotation provisions applying to Directors elected by the Members is now set out in rule 12.8. Directors appointed by the Board are not subject to the rotation provisions, however any Director is elected or appointed for a term of three years, and an appointed Director would be subject to review by the Board at the end of a term.

The maximum period for which a person may hold office either as an appointed or elected Director is six years, rule 12.7.

The Chair

The current provisions dealing with appointment of the Chair were unclear and inconsistent in their operation. Rule 13 provides as follows:

  • at the first Board meeting following the AGM, the Board must appoint one of their number as Chair, and one of their number as Deputy Chair, both of whom hold office for one year; and
  • the maximum period a Director may hold office as Chair or Deputy Chair is six years.

The Chair or Deputy Chair may be either an elected Director or a Director appointed by the Board.

Material Personal Interest

Rules 14.4 to 14.7 have been inserted in relation to material personal interests to reflect the law and best practice governance, as follows:

  • a Director must give the other Directors notice of a material personal interest relating to the affairs of the Company, which may be a standing notice; and
  • where a Director has a material personal interest in a matter being considered by the Board they must not be present while that matter is being considered and may not vote on the matter.

Current rule 21 dealing with the powers and duties of the Directors has not been retained, proposed rule 15 sets out the powers of the Board generally, including that the Board exercises all of the powers of the Company (refer rule 2.2) other than those that must be exercised by the Members.

Current rule 18.3 allowing for the appointment of Alternate Directors has been removed.

Proceedings of the Board

These provisions have been rationalised and simplified to accord with best practice and are now contained in rule 14. The quorum for a Board meeting has been changed to a majority of Directors, and the requirement for passing a resolution amended to a majority. The Chair does not have a casting vote in the event of a tie.

The provisions relating to written resolutions have been simplified and clarified, rule 14.3.

7. Consistency with Corporations Act 2001 (Cth)

The following have been inserted to ensure consistency with the Corporations Act:

  • The Company must have a Company Secretary, rule 17.
  • Revised provisions relating to keeping of minutes, rule 19
  • Execution of documents, rule 20
  • Common seal, rule 21

Current rule 23 dealing with the CEO and Treasurer has been removed, and replaced with rule 16 which provides that the Board may appoint a CEO on any terms and conditions determined by the Board.

8. Notices

These provisions have been consolidated and simplified and are set out in rule 23.

Indemnity & Insurance

The Officer indemnity provisions have been updated and simplified to reflect the current state of the law. These provisions relate to the Company indemnifying Directors and other officers (which includes the company secretary and CEO), and taking out insurance to cover the costs and liability of officers if a claim is made against them as a Director or officer of the Company.


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