The Road Ahead : October 2014
ROADAHEAD.COM.AU 62 THE ROAD AHEAD OCT/NOV 2014 Direct voting (rule 8) The New Constitution provides the board with discretion to use ‘direct voting’ for general meetings. Direct voting is something that has come about in recent years and allows a member to inform the Company directly by post or online on how the member wants to vote at a general meeting (instead of by appointing a proxy or representative). Direct voting is an alternative to the existing method of voting by proxy, attorney or representative (which will still be available even if a process of direct voting is introduced). To allow the Company to use direct voting a specifc rule needs to be included in the New Constitution. This will allow the board to potentially use new processes to increase fexibility for members to cast their vote (if eligible) and to increase participation rates at general meetings. Director nominations, elections and rotations (rule 9) The director nomination, election and rotation provisions are generally on the same terms as in the Existing Constitution, with modifcations to simplify the interpretation of certain provisions. The major change from the Existing Constitution is that a new mechanism has been included to allow the board to create a position for one or more directors (up to a maximum of three) who do not represent a specifc zone (and does not satisfy the usual eligibility requirements – e.g. by residing in a particular zone). This is to provide fexibility going forward for the board to recommend persons with appropriate skills and expertise that will beneft the Company (and members as a whole). Such directors would not be subject to retirement by rotation, but the New Constitution provides for their position to be reviewed by the board every four years. Maximum term for directors (rule 9.13) The New Constitution includes a new tenure qualifcation requirement for directors at re-election, of having served less than 12 years, starting on the date a director was frst elected. This refects the existing policy of the board. The board considers that a 12 year limit will ensure that each director is able to assist the Company over an extended period of time, but also encourage appropriate succession plans to be made on an ongoing basis, to encourage the appointment of new members of the board, bringing new and fresh ideas. A discretion has been retained for the board to extend this limit (by a further full four year term), to ensure stability of succession planning of the board. For example, if a planned successor was not available at the end of the 12 year period, this provision will allow the applicable director to remain in place while steps are taken to identify an appropriate person. Elections to be conducted at the AGM (rule 9.18) The director election provisions have been modernised in the New Constitution, so that elections can now be conducted at the AGM rather than by ballot, if considered appropriate. However, the Company has retained the ability to continue to operate a ballot via the new direct voting provisions (see above). Any such ballot could be conducted by post or electronically (e.g. through a dedicated voting website). The role of the Returning Offcer has also been retained. Extra services and director expenses (rule 9.22) The director remuneration provisions have been modernised in the New Constitution. The director fee cap (to a maximum limit of $1,300,000) which was approved at the AGM in 2013 has not changed. The New Constitution includes wording to make clear that directors are entitled to payment for expenses incurred by them in performing their duties and for additional remuneration in performing extra services (e.g. for the RACQ Insurance Limited board).