Review of the Registered Clubs Industry in NSW - Clubs NSW

9 Improving corporate governance
Nevertheless IPART recognises ClubsNSW’s concern that, in retaining member
discretion, IPART’s recommendations may not lead to extensive reform of club
constitutional restrictions. Therefore, it considers that OLGR should review the
effectiveness of the actions outlined in Recommendation 41 three years after their
implementation.
Recommendations
41 That clubs be encouraged to remove constitutional restrictions on board membership
and voting eligibility by:
– Not including any such restrictions in the model club constitution template to be
developed by ClubsNSW (see Recommendation 61).
– The Government including a provision in the Registered Clubs Act that defines the
core features of the various types of clubs.
42 That OLGR review the effectiveness of the actions outlined in Recommendation 41 in
facilitating the removal of constitutional restrictions on board membership and voting
eligibility three years after their implementation.
In addition, IPART considers that, in limited circumstances, boards should have the
option of appointing directors as a way of overcoming constitutional restrictions.
Specifically, boards should have this option if:
their club has board membership or voting eligibility restrictions in its
constitution, and
the club’s members have voted at an annual general meeting not to adopt the
model constitution developed by ClubsNSW or apply the ‘core club features’
provision of the Registered Clubs Act once effective.
In these circumstances, IPART considers that the board should be able to appoint up
to three directors irrespective of a club’s size, by majority vote of the board. These
appointments are in addition to any directors the board may appoint to fill casual
board vacancies as they arise. Safeguards to minimise the risk of this option being
abused should include:
Term limits: the term of any board-appointed director should be limited to
between one and three years, and this term should be nominated by the board at
the time of appointment.
Member ratification: at the club’s next annual general meeting, members should
vote to approve the board’s appointment of a director for term nominated by the
board.
Disclosure: the board should be required to document its reasons for appointing a
director and note these reasons in its annual report.
Further, board-appointed directors should not be permitted to comprise a
majority of a club’s board. Therefore, if a club has a board of five directors, only
two of those directors could be board-appointed directors.
Review of the Registered Clubs Industry in NSW IPART 153