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E.A. & Branches, Opinion 2020 

'Stuff ' just keeps dissappearing on Facebook and Forums!
'Stuff ' just keeps dissappearing on Facebook and Forums!
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WEASEL

November 2020

D.O.C.A. 'Weasel Words' Facilitate State Branches Actions

The DOCA wording also permitted Korda Mentha to ‘slip in’ unexpected (to the grass roots members) changes to the constitution that the grass roots members will have no hope of changing (due to the function of the two State Branches veto ability in the new constitution). Clauses 15 and 21 further cement the State Branches unequal power over members.

Specifically, I refer to this addition to the new EA constitution clauses ratified by the State Branches:

 

“Relevant Skills” are skills held by a Director or potential Director which are likely to be of benefit to the Company and/or Equestrian sport and which otherwise complement the Board’s current composition. Such skills will include at least seven

(7) years experience working in any of the fields of sports management, sports promotion or sports administration, finance, accounting, law, veterinary science or business generally.

21.        ELECTED DIRECTORS

21.1      Qualifications for Elected Directors

(D)         to be a suitable nominee by the Nominations Committee under Rule 21.2; and

 

15.1       THE BOARD NOMINATIONS COMMITTEE

 

(a)         A Board Nominations Committee will be formed by the Company.

(b)         The Nominations Committee will comprise:

(i)           a chair fully independent of Equestrian sport;

(ii)          one Director;

(iii)         one director of a Branch; and

(iv)         one member of a Discipline Committee,

 

with each Nominations Committee member appointed by the Board. (b)(c) The Board Nominations Committee will must assess nominations and candidates for all Director vacancies (including Elected Directors made under Rule 21.221.221.2, Appointed Directors, the Athlete Director and casual vacancies) and provide advice to the Board and, for Elected Directors, also the Branches Voting Members, with respect to:

(i)           the suitability of nominations or candidates for Elected Directors positions, having regard to the skills and attributes of the nominees; and

(ii)          the composition of the Board, having regard to diversity of skills, gender, and skills and backgrounds of Directors.

(d)         The Nominations Committee, by majority vote, has the power to determine that a nominee or candidate is unsuitable for further consideration by the Company, Board or Voting Members (as the case may be) and is therefore ineligible for election or appointment to a Director vacancy.

(e)         In the case of an equality of votes on a question under Rule 21.2(d), the chair of the Nominations Committee is entitled to a second, casting vote.

(c)(f) Subject to this Rule 21.2(a) and (d)Rule 21.2, the composition complete and specific duties, functions and operating procedures of the Board Nominations Committee shall be set out in a charter to be defined in the Nominations Committee terms of reference as determined by the Board and the Branches.

(d)   The Board Nominations Committee will include at least one person who is not a director or employee of the Company or a Branch and has extensive board, governance and executive experience.

 

Despite verbal assurances to myself from Craig Shepard that a ‘Nominations Committee’ is corporate best practice and that Sport Australia is fully supportive of its inclusion, these clauses functionally allow the Board and State Branches to censor nominations and manipulate the EA  board so that only ‘cronies’ are put forward and they also control the constitution; nothing that the State Branches don’t condone will ever be permitted constitutionally.

With view to the history of EA and the State Boards, these clauses cement the absolute power of the State Branches. Coupled with the veto power of 2 State Branches this clause is virtually impossible for the membership to change. 

Read how Equestrian New South Wales Board Nomination Committee worked November 2020

 

It’s worth mentioning that having a ‘skill-based board’ is nothing new, it’s what EA had for the previous 10 years and look where that has landed them!  Furthermore, 7 years’ experience in a field is manifestly excessive and will rule-out many suitable candidates. It is not as if the door is being beaten down by ‘suitable’ applicants, check with Korda Mentha on this point!

Past 'Skill Based Board' example. One amongst many

UNSUPPORTABLE ‘LOGIC ’ BY THE STATE BRANCHES RE. CLAUSE 40 OF THE ALTERED CONSTITUTION- DEMONSTRATE MORE OF THE SAME OLD GOVERNANCE

The State Branches with smaller membership numbers explained their vote in this matter by misleadingly  claiming that the ‘veto’ element of clause 40 was, in their opinion was necessary to protect their Branches’ membership’s interests against the greater power of the Branches with larger membership numbers.

 

The State Branches explanation regarding the requirement for the ‘veto’ element in clause 40  is disingenuous and not supported by the facts.  The only possible constitutional change that could disadvantage only  the members of the  State Branches with lower membership numbers would be related to the geographic location / funding of a permanent location for National competitions/ training. The EA constitution to date has never included any reference to restricting/designating geographic location/s and any future reference would be highly unlikely, unnecessary and could be covered by restricting this issue (onl) in the constitution. It should never have been offered by any of the State Branches as an excuse for denying their members one vote each on all EA matters including Constitutional changes.

 

SOLUTION

An alternative clause was suggested and ignored

Prior to the State Branches voting on clause 40 on September 15th 2020 I wrote to all the State Branches and Korda Mentha stating the facts are : Each State Branch is independently incorporated with the specific constitutional responsibility for the administration of equestrian sports in their own state; State Branches have clearly defined roles under their State Branches Constitution and the Memorandum of Understanding with Equestrian Australia. The State Branches operate in conjunction with Equestrian Australia’s clearly defined role which is on a broader National and International level.

 

As  explained previously, ‘protection of the smaller State Branch member’s rights ‘ is realistically and functionally only required regarding any Equestrian Australia’s constitutional alteration regarding highly unlikely geographic matters that theoretically could be proposed e.g. where National and/or qualifying events, training, would be held; it is extraneous to requirements for all other constitutional changes.

In my letter I suggested that it should be possible to word Clause 40 so that the veto element only comes into effect when there is a constitutional alteration related to specific matters pertaining to geographic locations. My suggestion was ignored by Korda Mentha and the State Branches.

 

If the State Branches were genuine in their objection to the 1 vote, 1 member disadvantaging the State Branches with smaller membership numbers, my solution should have satisfied all parties.

 

The Minority rules – democratic- No!

Under the constrictions of the now enacted clause 40, theoretically 2 states with possible  a total of 2064 members can veto the wishes of the remaining states with 18484 members!

Democratic- not!

Demonstrating good governance- No.

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BOARD
LOGIC
SOLUTION
MINORITY
NOMS
VETO40
BRANCH NUMBERS 2020.jpg

Theoretically, if Clause 40 was employed by 2 small State Branches, for example  E.Tas  with and E. South Australia (with a total of 2064 members), to veto a Constitutional Change carried by the other State Branches (using the membership figures above from the EA Annual report- with a total of 18484 members) the inequality and abuse of power is clear and un-democratic. Especially when it is possible that these same State Branches have already voted using their own single vote each and their State Branch could theoretically use the the veto power against their members wishes, members who may have voted in favor of the constitutional change. What happed to one vote, one member?  This ability is patently absurd!

The State Branches with larger membership should have been able to stand up for the democratic rights of their members and out voted the ‘minor branches’, isn’t this democracy?  It is my understanding that only the Queensland Branch voted against clause 40, the other 4 Branches, including the larger branches, voted for clause 40.

 

I received no replies from any of the State Branches regarding my suggested modification to clause 40; clause 40 was carried by the State Branches unchanged. The State Branches are determined to retain control over EA , not reflecting any commitment to changes as required for the return of government funding. State Branches behaviours since this vote further demonstrate their dictatorial, unconscionable manner of administration - read on.

 

THERE WAS AN 'LEGAL SOLUTION' - The Administrators  were asked to pursue  445G of the Corporations act to resolve the issue of Clause 40- they didn’t.

The Corporations Act clause 445G does provide Administrators with means to resolve the situation that Korda Mentha was faced with. Remember that the governance of Equestrian Australia (and the Branches, independently) comes under the jurisdiction of ASIC and the Corporations Act.

Under the Corporations Act 445G-  from my lay-persons interpretation there appears to be a recourse that could have been taken by the Administrator to apply to the court to seek a judgment regarding the legality/ vary the wording of the DOCA Clause 7a to ensure that there was no flexibility other than to achieve the material outcome of recognising the Participating Members (grass roots members) as a class of members of the Company with the same voting rights as currently held by the Members (the State Branches).i.e. equal voting rights on all mattersRegardless of the outcome this measure would have provided a legal decision. Under 445G it appears that the court has quite a wide range of powers and possible actions; granted, there was the possibility if this measure was taken there was a remote possibility that the DOCA could be invalidated and EA forced into liquidation. However, I.M.O. this was a remote possibility as the court had the power to vary the deed.

The Administrators were well-aware of the outcry from the grass roots members over Clause 40. Which is still on-going in January 2022.  Despite requested in writing, they decided not to pursue a legally available resolution that could have provided a fairer outcome for grass roots members.

Prior to the State Branches vote on September 15th 2020 I wrote to the Administrators and asked that  they pursue a legal resolution to this impasse between grass roots members and their State Branches, the Administrator could apply to the court for a decision:

See the applicable clauses in the Corporations Act. I've highlighted the important sections so you can make up your own mind.

ACTIONS TAKEN BY HORSES MOUTH

Web-pages are all very well but, without alerting those with the power/authority to actually do something they are just words on the internet. 

Horses Mouth has sent these letters to the authorities  (see also ASIC)

My letter to Korda Mentha on the 445G solution to Clause 40

My Letters to each State Branch - Solution to Clause 40

The Petition re Clause 40

Cover to Korda Mentha re the petition 1 Sept 2020

HIGH PROFILE ELITE COMPETITOR HEATH RYAN SPEAKS OUT ON THE

VOLUNTARY ADMINISTRATION PROCESS

Credit:  excerpts EQLife Articles

Was E.A. really insolvent? 

#Voluntary Administration, #EQ, #process, #veto, #tribunals, #Justice, Ricky MacMillan, #secrect, #Sport Australia, #insolvency, #injustice, #Heath Ryan, #blindsided, #timing, #transparency, #funding, #lies,#timeline, #inequality, #deception, #Insurance, # Board, #ordinary members

Heroic Heath has never shrunk from expressing his opinion and in these three excerpts he doesn't hold back the punches. I'm personally thankful that Heath's opinions support mine and the evidence and vice versa. Heath also poses some curly questions regarding solvency. Take special notice of Heath's opinion that E.A. was not dependent on the Sport Australia funding, without the high-performance component of governance Equestrian Australia could be self sustaining on members leveys.

445G
LETTERS
HEATH
PETITION
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