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Is This a Constitutional Crisis?

Several weeks ago we published our thoughts on how to run an AGM in the midst of a Government mandated lock-down and “physical” distancing, a term used by the author Isabel Allende who suggested that at this time we should be more social with all the technology on hand! In our last article we defined how the Australian Securities and Investment Commission (ASIC) has suggested that each organisation should follow their Constitution documents.

That’s all very well if the Board or management of the company has kept up to date with the evolution of a Constitution document. This is a live example of what I have been dealing with recently – and I’m sure it applies to a lot of small organisations, especially incorporated social clubs. I am the President of a local motoring based social club whose committee typically meet monthly and discuss events for the membership, the management of vehicle registrations under the NSW Roads and Maritime Services (RMS) Historic Vehicle Scheme and what is happening within the eco-system surrounding the marque.

It is now time for our AGM to take place and a quick review of the Constitution showed that there were no clauses for technology use during general meetings, meaning that we had to hold a physical meeting. Why didn’t the Constitution allow for technology? Simply because the Constitution was based on model rules for associations incorporated under the Associations Incorporation Act, 1984! This model was great when the club was founded in 1989 however, times have moved on although there was no pressing need to update the Constitution. The club was running smoothly, members enjoyed meeting regularly and having a good lunch or dinner as part of the AGM. With hindsight, when we added an addendum to cover the RMS Historic Vehicle Scheme, it would have made sense to check to see if the main document was still fit for purpose. Again, there was no urgency because things were running OK.

There are probably hundreds of social clubs and associations in the same position – happily the NSW Department of Fair Trading has a more recent set of model rules, albeit dated 2009, that have many of the clauses that are now needed to support a modern entity. If you are involved in any social organisation, regardless of whether it is incorporated or not, it is still important to check that the foundation documents are up to date – you never know when you will need to lean on them for support!

So is this really a “Constitutional Crisis” – it could be if the organisation is large and delivers support to a wide section of the community that would be harmed by the loss of a service or would be hurt by a local public relations disaster if a member agitates because the organisation is late in dealing with this issue. In reality though, its probably not a crisis as most organisations still running a Constitution based on 1984 model rules would be small social clubs that can easily change.

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