Review of the Registered Clubs Industry in NSW - Clubs NSW

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9 Improving corporate governance Some stakeholders called for financial incentives to be provided to assist directors to undertake training. For example, ClubsNSW suggested subsidising training along similar lines to ClubBIZ; that is, using unclaimed Keno funds. 152 However, IPART considers that clubs should finance training. One of the factors OLGR will take into account when deciding to approve a core training module is whether it is appropriately priced. If a director does not comply with the core training requirements, IPART considers that the consequences should be in line with those for directors not complying with the pre-election package requirements discussed above. These requirements are yet to come into effect; however, as they are currently drafted, if a director does not comply with them, the director’s club could be liable for a fine of up to $1100. 153 In addition to completing the required post-election training, IPART believes it is important that directors undertake ongoing training to keep their skills up-to-date and stay in touch with current developments. In view of this, IPART considers that ClubsNSW should continue to promote ongoing training for directors as best practice. It also considers that ClubsNSW should encourage clubs to report any ongoing training undertaken by their directors in their annual reports, to increase the industry’s awareness of the importance of ongoing training. Recommendations 38 That directors be required to complete two core training modules (unless exempt on the basis of their prior learning) within 12 months of being elected to a club’s board. The core training modules should cover understanding financial statements and directors’ duties. This requirement should be appropriately scaled according to club size, so that: – for clubs with annual gaming machine revenue of greater than $1 million, all directors need to complete the core training modules – for clubs below this threshold, the board needs to ensure that at least two of its directors complete the core training modules. 39 That ClubsNSW encourage clubs to report any ongoing training undertaken by board directors in their annual reports. Encourage boards to use performance assessments to identify areas of their skills they need to improve IPART considers that club boards should be encouraged to assess the performance of individual directors and the board as a whole on an annual basis. This would help to improve directors’ skills by assisting them to identify their strengths and weaknesses. As part of the performance assessment process, directors should decide 152 ClubsNSW submission, 31 July 2007, p 163. 153 Section 47 Registered Clubs Act. 150 IPART Review of the Registered Clubs Industry in NSW
9 Improving corporate governance what ongoing training they should take part in over the next year to improve their performance. To encourage boards to conduct performance assessments, ClubsNSW should amend its Best Practice Guideline for Board Operations. The Best Practice Guideline currently states that each financial year the board should facilitate: …the giving and receiving of performance feedback for directors by their peers based on the agreed role expectations. 154 IPART considers that this guideline should be expanded, so that the board also asks directors to nominate what ongoing training, if any, they will undertake over the next financial year in light of their performance feedback. In addition, this should become a best practice recommendation (see Recommendation 50) and clubs that do not comply with this recommendation should be required under a revised Code of Practice to disclose their reasons for non-compliance in their annual report (also see Recommendation 50). ClubsNSW has indicated that it will revise its Best Practice Guideline for Board Operations to encourage performance assessments. However, it considers requiring clubs under its Code of Practice to annually report the extent that they follow the best practice recommendations is unjustified. 155 After considering ClubsNSW’s view, IPART remains convinced that this requirement is a useful way for ClubsNSW to continue to foster best practice in club corporate governance. Recommendation 40 That ClubsNSW encourage club boards to undertake performance assessments of individual directors and the board as a whole on an annual basis, by revising its Best Practice Guideline for Board Operations, and including a best practice recommendation. 9.3.2 Addressing difficulties in electing directors by encouraging clubs to remove constitutional restrictions and permitting board-appointed directors Some clubs have constitutional restrictions that limit the number of board positions social members can hold, and who is eligible to vote at board elections. 156 Stakeholders indicated that these restrictions can mean that clubs are only able to elect directors from a narrow pool, and inhibit people with appropriate skills from being elected to boards. 154 ClubsNSW, Best Practice Guidelines: Guideline for Board Operation, July 2005, p 28. 155 ClubsNSW submission, 4 April 2008, p 42. 156 The Registered Clubs Act permits the voting membership for board elections to comprise a sub-class of ordinary members, provided the sub-class constitutes at least 25 per cent of ordinary members (Section 30(9)(a) Registered Clubs Act). However, there is a requirement that ordinary members approve any resolution by a club to reduce its voting membership below 50 per cent of ordinary members (Clause 50D Registered Clubs Regulation). Review of the Registered Clubs Industry in NSW IPART 151
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Independent Pricing and Regulatory
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© Independent Pricing and Regulato
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Contents 6 Strengthening the financ
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Executive Summary Executive Summary
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Executive Summary estimated the val
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Executive Summary Therefore, IPART
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Executive Summary However, IPART al
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Executive Summary List of Recommend
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Executive Summary 15 Once the stand
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Executive Summary 29 That ClubsNSW
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Executive Summary 46 That ClubsNSW
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Executive Summary 60 That OLGR deve
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1 Introduction 1 Introduction Over
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1 Introduction 1.1.2 Review’s foc
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1 Introduction 1.2 Other reviews an
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1 Introduction 1.3 The structure of
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2 The registered clubs industry in
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3 Understanding the social contribu
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4 Measuring and reporting on club c
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5 Refining the Community Developmen
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6 Strengthening the financial viabi
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12 Making it easier for new clubs t
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13 Removing unnecessary regulatory
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14 A framework for a management pla
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A Terms of reference A Terms of ref
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A Terms of reference The proc
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B Terms of reference checklist Term
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C List of submitters, roundtable pa
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D Gambling expenditure and problem
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E IPART’s methodology for recordi
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F ACG’s approach to measuring the
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G ClubsNSW - steps to establishing
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G ClubsNSW - steps to establishing
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Glossary and Abbreviations Glossary
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Review of the Registered Clubs Industry in NSW - Clubs NSW

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