Notice of Special General Meeting - Proposed changes to ADA governance

4 March 2019

In April, the ADA is proposing to amend the Constitution to create a National Advisory Committee to Federal Council which will include Branch Presidents and Federal Councillors.

This is the subject of a Special General Meeting of the Australian Dental Association Inc. which will be held in the Council Room, Federal ADA Building, 14-16 Chandos Street, St. Leonards, on Friday, April 12, 2019 commencing at 9.00 a.m.  (To vote you can either attend the Special General Meeting in person on 12 April at 9am at ADA Federal Office, 14-16 Chandos Street, St Leonards, NSW or download a Proxy Form at www.ada.org.au/proxy-vote and follow the instructions.)

Here we explain why the changes are supported by the current ADA Federal Council. 

Continually reviewing that appropriate governance arrangements are in place is a healthy approach for any organisation and the ADA is no different. Over the past year, the Federal ADA has been in discussion about the role of Branch Presidents in relation to the Federal Council.

Federal Council is the governing body of ADA Inc. Those who sit on Federal Council are officers of the Association and as such are accountable for the strategy and direction of the organisation. They carry a fiduciary duty to the organisation and its members, and just like the director of any company, their personal assets are potentially available to the courts in the unlikely event the organisation ever became insolvent and there was a shortfall.

Currently, Federal Council is made up of 17 Federal Councillors nominated by branches. Under the Constitution, Branch Presidents have also been entitled to attend Federal Council meetings. However, they do not have a vote and the prevailing view in the past was that this was likely to strike a balance between information sharing, contribution and legal responsibilities.

The legal environment around governance of organisations has changed over the years and it continues to evolve and as a result, last year, a question was raised about whether Branch Presidents are in part responsible for ADA Inc as if they are Federal Councillors. As Branch Presidents don’t have a vote nor a formal right to speak at meetings, it seemed odd that they might be responsible.

Given the severity of such a question, the ADA sought legal advice which indicated that Branch Presidents are likely to be responsible as if they are officers given the extent to which they form part of the meeting. The term ‘defacto officers’ has been used to describe the situation where Branch Presidents participate in the meeting and may influence the outcomes, despite not being able to vote.

In some cases, being ‘defacto officers’ could create difficulties due to uncertainty around officer’s insurance and in a situation where there isn’t alignment of interests between ADA Inc and a particular branch. This leaves Branch Presidents without a vote while potentially being legally responsible for the decisions of Federal Council.

To address this, the ADA Federal Council requested that the Constitution and Policy Committee consider changes to the Constitution that may resolve the issues raised. The Constitution and Policy Committee, after reviewing the issues, recommended to Federal Council in November that a General Meeting be held to amend the Constitution in order to remove Branch Presidents from the requirement to attend Federal Council. Instead, a National Advisory Committee to Federal Council would be created. The National Advisory Committee would include all seven Branch Presidents in addition to the 17 Federal Councillors.

It is anticipated that the National Advisory Council would meet in conjunction with Federal Council meetings and discuss a wide range of issues which might include policy, strategy and key issues facing the profession and the ADA. The National Advisory Council wouldn’t participate in or vote on matters that would ordinarily be considered fiduciary issues, those typically considered by a Board of Directors, but may be called on to offer their advice to Federal Council on such matters.

The Federal Council made up of 17 members, would continue to meet, vote and govern ADA Inc. Federal Council meet up to three times a year (with the smaller Federal Executive Committee meeting most other months). Councillors will continue as the Officers of the Association and will carry the fiduciary responsibility to act on behalf of the Association and its members nationally.

A follow up matter that also came out of the legal advice sought was the potential legal responsibility taken on by ‘alternate Councillors’ under the Constitution. An alternate Councillor is a member who takes the place of a Councillor for a single meeting if the appointed Councillor is unable to attend. Under this model, both the Councillor and the alternate Councillor become legally responsible for the decisions of federal council related to that meeting.

It’s possible that an alternate Councillor won’t have all the background related to all decisions given that council meetings are two full days and cover significant ground. 

If ever there was a significant issue resulting in insolvency and it was traced back to the meeting in which an alternate Councillor participated, their assets would potentially become available to the courts. Federal Council supported removing the requirement for an alternate Councillor to be appointed in the absence of the Federal Councillor. The absent Federal Councillor can express their views through the President and has access to all minutes and documents. 

Communication with the branches continues to occur through a formal communique which is prepared and distributed after each Federal Council meeting.

The recommended changes are supported by Federal Council and a General Meeting has been called for Friday 12 April 2019 to consider the proposal.

For Constitutional changes to be adopted, at least 75% of members who vote at the General Meeting are required to vote in favour of the amendment.

For more information regarding these changes, email [email protected]