Review of the Registered Clubs Industry in NSW - Clubs NSW

9 Improving corporate governance
While there was some disagreement about the extent and seriousness of this
problem, IPART considers that such constitutional restrictions are likely to reduce
the effectiveness of the board. Therefore, it considers that clubs should be
encouraged to remove restrictions on board membership and voting eligibility from
their constitutions.
Some stakeholders indicated that they have experienced significant difficulty in
effecting constitutional changes. Therefore, IPART considers that both ClubsNSW
and the Government should play a role in encouraging clubs to remove their
constitutional restrictions. In particular, the following steps should be taken:
The model club constitution template ClubsNSW is to develop (see
Recommendation 61) should not contain any board membership and voting
eligibility restrictions. Clubs would complete the constitution by inserting the
core features of their particular club in the objects section.
The Government should amend the Registered Clubs Act to include a provision
that defines the core features of the various types of clubs (eg, RSL clubs support
certain ANZAC traditions, leagues clubs support their affiliated football teams).
This would give members comfort that if they changed their club’s constitution,
its core features would be protected by legislation.
Members could vote to replace their club’s existing constitution with the model
constitution or apply the ‘core club features’ provision to their club in exchange for
removing constitutional restrictions from their existing constitution.
ClubsNSW proposed that a provision be included in the Registered Clubs Act to
require that at least 25 per cent of a club’s ordinary members be ‘full voting
members’. That is, at least 25 per cent of a club’s ordinary members would be
entitled to vote on all club business (including constitutional changes) and be entitled
to stand for election to a majority of board positions. 157 This would potentially widen
the range of people who could become directors. Further, clubs would have the
flexibility to define who should constitute a ‘full voting member’.
IPART sees merit in this proposal. Its mandatory nature would overcome some of
the barriers to constitutional change, such as cost and member apathy. However, it
considers it unlikely that this proposal would be appropriate for all club types. For
example, many golf clubs give playing members greater voting and board rights than
social members, in light of the more substantial fees paid by playing members. If
playing members comprise less than 25 per cent of the club’s ordinary members,
ClubsNSW’s proposal could unduly dilute their interests in the club.
Further, IPART considers that members should be able to choose whether, in light of
their club’s circumstances, they should remove its constitutional restrictions. For this
reason, Recommendation 41 below does not remove this member discretion, but
attempts to make it easier for clubs to overcome some of the more common concerns
of their members.
157 ClubsNSW submission, 4 April 2008, p 40.
152 IPART Review of the Registered Clubs Industry in NSW