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Constitution

The purpose in this draft paper is to seek agreement on some of the key features that a constitution for an organic industry peak body should have.

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We received a grant from the Farming Together Program for BAL Lawyers to draft a constitution for the interim peak body. Further details are available here. In addition to defraying significant legal expenses, constitution also now provides a very tangible document to be discussed.

Member council

Where did this idea arise?

Perhaps the issue that has caused more debate than any other is whether there should be a member council additional to a board of directors.

A clear finding from the consultations undertaken by Policy Partners was a strong desire for better forums to improve representation and discuss policy. They provided the following observation:

We suggest that the member council would be appointed for a two-year period and that the proposed biennial conference (see below) would occur mid‑term and be one focus for the council’s attention.

We have formed the view over the course of this project and through our consultations, that industry unity will be unlikely to coalesce unless a strongly representative forum, such as a member council, plays the preeminent role in enforcing accountability, setting strategic direction, developing policy platforms and resolving disputes (within the industry forums rather than in public).

The consultants raised two different options. These options were considered as part of the legal brief with BAL Lawyers in preparing the constitution.

Legal advice was for a structure more along the lines of a member advisory forum, but which also has some of the features of a member council. The legal advice was that there are certain functions and processes associated with the board of directors, specified in corporation law, and the creation of a member council must be consistent with that law. Ultimately, all powers of the company are vested by the members in the directors. Where the draft constitution provides a role to the Member Council, the board of directors has reserve powers to override that role or take a decision that may be inconsistent with the advice of the Member Council.

The name given to this hybrid structure in the draft constitution is Member Council. It most closely resembles the member advisory forum (Option 1) from the consultants' report, but with the name of Option 2. So of course, it may be confusing and confronting to many who strongly opposed Option 2.

The Executive Committee believes it came up with the best possible balance between representation and accountability, participation and professionalism.

Member Council is optional

The Executive Committee considered whether:

  • provision for a member council should be included in the draft constitution now and then debated later by members whether to remove/amend it; or
  • leave it out for now and reconsider whether to include it later.

Given the complex legal nature of the member council proposal, and that the Farming Together Program would be paying for the legal advice, it was decided to include the member council in the current draft and reserve the right to review it later.

However, to simplify this review process, the lawyers were instructed to provide a facility so that members could switch on/off the Member Council based on their assessment at an AGM of whether circumstances warrant its formation. As the board of directors hold all reserve powers, turning the Member Council off simply means that the directors then need to take on those functions that the Member Council would have performed.

Proposed functions of the Member Council

The following is a list of proposed functions of the Member Council (if a Member Council exists):

  • assessing and reviewing membership eligibility (i.e. the validity of certified organic operator status)
  • it may recommend to the Board that membership is denied or revoked
  • it may recommend to the Board what class of membership applies (i.e. full member or associate)
  • provide recommendations in respect of the eligibility or relative ranking of the candidates for position of director
  • the President of the Member Council or another councilor is chairperson of any meeting of members (i.e. AGM and general meetings)
  • it may convene a meeting of members
  • it may recommend to the Board the form of direct voting by members not attending a meeting in person
  • developing a long term plan to advance the objects of the Company and provide a framework to guide the Board in its strategic planning
  • coordinating member activities and events, including a biennial conference
  • providing a pool of experienced councilors held in high regard by the members who are available to assist the Board in facilitating good relations with key stakeholders and advocating on behalf of the industry

Powers of the Member Council

The Member Council may make recommendations to the Board in respect of any area of Board responsibility.

The Board must give due consideration to recommendations made by the Member Council.

However, the Board is not obliged to accept recommendations made by the Member Council and must act in the best interests of the Company and for the proper management of the business affairs of the Company.

The Member Council may also perform the role of a nominations committee for directors. The draft constitution provides it with the power to:

  • undertake a review of the eligibility of candidates against the requirements set out in clause 11.3
  • consider the need to ensure that the Board will have appropriate attributes, competencies, diversity of perspective, and be adequately representative of the membership
  • provide recommendations to the members at an AGM in respect of the eligibility or relative ranking of the candidates

Of course the Board also has the power to do this and may take a contrary view.

Councillors and directors

An important distinction in the draft constitution is that:

  • directors do not have to be members
  • councillors must be be either a Full Member or an Associate

Both directors and councilors may be remunerated at the discretion of the membership.

Budget

The Member Council must negotiate a budget with the Board, but the Board ultimately determines the parameters of that budget.

Objects

The objects for which the Company is established are to:

(a) facilitate an organic industry which has an authoritative voice that enhances the fortunes of all Australian certified organic operators, through advocacy, education and transparent representation;

(b) improve the competitiveness of certified organic operators through effective advocacy to governments, with industry stakeholders, and in respect of research and development;

(c) promote the integrity of certified organic productions systems;

(d) promote industry development and educate producers and consumers in respect of certified organic production;

(e) facilitate collaboration across supply chains and improve domestic and export market access for Certified Organic Operators; and promote widespread uptake of sustainable farming systems and markets based on organic principles and imbued with a culture of innovation, of progressive improvement towards best practice, of transparent integrity, of inclusive collaboration, of holistic systems, and of true value pricing.

Membership

There are two categories of membership:

  • a Full Member must  be a certified organic operator and has voting rights
  • an Associate has no voting rights

If a Full Member ceases to be a Certified Organic Operator, they must inform the Secretary immediately. Their membership eligibility may be reviewed.

Only Full Members may nominate candidates to be directors or councilors.

Corporate entities and associations need to nominate an individual representative, otherwise they may not participate as a member.

Members may cast votes on resolutions in elections electronically ahead of the AGM or general meeting.

Members may participate in meetings using technology.

Board of directors

The Company must aspire to have at least one director from a member of the following organic sub-industries:

  • agriculture
  • horticulture
  • processing
  • wholesaling/export/retail

and must otherwise aspire to be representative of the membership, especially in respect of gender.

Directors must have relevant experience and expertise in:

  • operating an organic certified business;
  • organic certification systems;
  • financial management;
  • international trade regulation and exportation of products; or
  • corporate governance and/or as a non-executive director

Any individual can only be appointed as a Director for a maximum of 3 terms of 2 years each.

The Directors are to be paid not more in aggregate than the remuneration determined by the Members divided between them in such proportions as the Board may determine under the Directors’ Remuneration Policy which is determined by the Board.

If a Director holds any office of profit or has a direct pecuniary interest in any other organisation or entity, the Company must not engage or pay that organisation or entity for goods or services during the person’s tenure as Director.

The Company may also pay the expenses incurred by the Directors provided that those expenses are properly and reasonably incurred.