Perth Racing Member Consultation (2) - Respecting our Heritage while embracing the Future - 8 July 2

Perth Racing Member Consultation (2) -

Respecting our heritage while embracing the future -

(a)

This is the second of two Discussion Memoranda upon which the Board wishes to consult the Club’s Members.

(b)

This Discussion Memorandum (2) covers the rationale for proposed revisions to the Club’s Bylaws and constitutional terms as well as its internal governance framework and operational policies to align them with contemporary accepted good governance principles and practice in the best interests of the Club as a whole.

Contents 1.

Introduction and background

2.

Concerns with current By-laws and constitutional terms

3.

Proposed revisions to current By-laws and constitutional terms

4.

Key elements of a proposed new “Governance Charter” to be adopted

5.

Consultation

6.

Next steps

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1.

Introduction and background Discussion Memorandum (1) summarised the rationale and benefits for the Club to become an incorporated body registered under the Corporations Act (“CA”) as a company limited by guarantee.

It is not intended to repeat those here and Members are encouraged to read Discussion Memorandum (1) to assist them in this second round of consultation.

2.

Concerns with current By-laws and constitutional terms The Club’s current By-laws present as a professionally prepared set of governance rules reasonably designed to complement the Club’s current unincorporated status and the statutory enablement of The Western Australian Turf Club Act 1892 (“WATC Act”).

However, the report of the expert governance consultant engaged by the Club highlighted some issues that warrant attention should the Club resolve to incorporate and especially if the Club wishes its governance framework to meet contemporary accepted good governance principles and practice.

3.

Proposed revisions to current By-laws and constitutional terms The following comparative table seeks to explain the main proposed changes to achieve this outcome relative to the current By-laws.

Current By-laws

Proposed revised Bylaws/Constitution

1

Absence of regulatory compliance requirements as the Club is unincorporated and not bound by the relevant statutes

Inclusion of relevant statutory and regulatory compliance requirements initially under the Associations Incorporation Act and then the Corporations Act (CA) following ultimate transition

2

Name of Club need not include the words “Incorporated” or “Limited”

The Club’s name will need to initially include “Inc” and then later “Limited” upon registration under the CA.

3

Classes of Membership currently contemplate

As different Membership classes can impose additional regulatory requirements on the Club, it is proposed for there to be only one class

• • • •

ordinary Members corporate Members life Members other classes as determined by Board



Members (all with the same constitutional Membership rights),

but with differential Membership “Category” benefits (through contractual arrangement with the Club) to recognise for example •

•

“corporate” status allowing the corporate Member to appoint a nominee to represent it at meetings with racecourse guest passes as at present; “life Member” status still recognising meritorious service to the Club and waiver of annual fees.

Perth Racing Member Consultation (2) - Respecting our Heritage while embracing the Future – Page 2

Current By-laws

Proposed revised Bylaws/Constitution

4

Application of the WATC Act

Application of the WATC Act but only while it is current and has not been repealed (which is the longer term intent)

5

Objects of Club

No change

6

Not for profit principles upon which the Club operates

No change

7

Member liability – inherent risk of personal liability (albeit unlikely) due to unincorporated status

Member liability (upon ultimate registration under the CA):

8

Resignation, suspension and expulsion of members

No material changes

9

(A) Board composition to comprise as follows:

(A) Maximum 9 Members (incl CEO) comprising as follows:

• • •

5 x elected Members up to 4 x Board appointed Directors (whose appointments should align with an AGM) 1x CEO ex officio (not specified whether or not voting)

•

• • •

each Member’s liability is absolutely capped at $1 (ONE DOLLAR) only and then may only be called upon (unlikely) in case of insolvency of the Club

4 x Member elected Directors up to 4 x Board appointed Directors (flexibility as to timing of appointments) 1 x CEO ex officio (but non-voting)

[Item for consultation/discussion: -

effectively this reduces the Board from 9 to 8 Members, excl CEO (considered to be a more manageable and appropriate Board size based on contemporary good governance philosophy)

-

alternatively the structure of the Board could remain as at present (5 x Member Elected Directors and up to 4 x Board Appointed Directors, i.e.

9 in total excluding the non-voting CEO) so that Member Elected Directors should be in the majority.]

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Current By-laws

Proposed revised Bylaws/Constitution

(B) Maximum duration in office:

(B) For both Member elected Directors and Board appointed Directors (9 successive years based on 3 x 3 year terms)

• Member elected Directors (9 years – 3 x 3 year terms) • Board appointed Directors (7 years – 3 year term renewable (C) Removal from office of a Director: •

by Members in general meeting

(C) •

• 10

Eligibility and nomination for Board election •

basic criteria only

•

if number of vacancies exceed number of nominations, the nominee is deemed elected

•

11

•

basic criteria (plus)

•

description of desired skills/experience/ attributes of Board members (enhanced criteria)

•

nominees for Board election to include a statement of their satisfaction of the criteria

•

Board Committee to review nominees’ attributes and provide information to members

•

method of election at Board prudential discretion

Office bearers • •

12

method of election at Board discretion

by Members in general meeting for any Director also by Board resolution for Board Appointed Directors only

No material change although must also include appointment of a “Secretary”

Chair Vice Chair

(A) Powers of Board:

(A) Powers of Board:

Relatively unlimited except for:

Relatively unlimited except for:

• clause 5.3 limits the Board from entering into the following without prior Member consultation or approval: i) ii)

All land sales (except petty); Any debt incurring transaction, or transaction, over $5m.

• any material transaction whatsoever with value over $20m (CPI indexed) unless there is prior Member consultation (after provision of information to assist Members in making a reasonably informed assessment of the matter) or conditional upon Member approval.

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Current By-laws

Proposed revised Bylaws/Constitution

(B) Duties of directors and responsibilities (and exceptions/ limitations):

(B) Fiduciary duties and responsibilities (and exceptions/limitations) under Corporations Act from time to time operate automatically

 fiduciary duties and responsibilities (and exceptions/limitations) materially as per Associations Incorporation and Corporations Acts but would need By-law amendment if the legislative provisions change

 ASIC may regulate and enforce in addition to Members having rights of enforcing themselves  stronger statutory and civil liability penalties apply incl risk of jail and banning orders (in egregious cases)

 primarily for Members to enforce themselves with no enforcement powers by ASIC/regulators

13

Members voting at General Meetings 

14

19

basic provisions

more enhanced requirements to apply consistent with contemporary good governance practice especially via Governance Charter requirements



more enhanced requirements to apply especially via Governance Charter requirements

 no material change

5% of Members 40 Members

Quorum of Members at Special General Meeting lesser of:  



basic/simple provision

Quorum of Members at Annual General Meetings lesser of:  

18

in person or by proxy in favour of the Chair or another Member in attendance

 no material change

Board Committees 

17

only with Member approval in general meeting

Review of Board performance 

16



Remuneration of Directors 

15

in person only – no proxy voting

5% of Members 200 Members

Lesser of:  5% of Members  40 Members

Dispute resolution provision: 

yes

 no material change

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Current By-laws

Proposed revised Bylaws/Constitution

20

Auditor



no material change

21

Changes to By-laws/Constitution



only by Members by special resolution (inc. 75% majority of voting members present in person or by proxy at a General Meeting of which due notice has been given)



detailed provision including proposed adoption of a detailed Governance Charter (once registered under CA)



22

Authority to pass operational/governance related rules/bylaws not inconsistent with By-laws 

23

no provision although Board can change the constitutional by-laws at any time

Transitional provision 

4.

by Board only by majority resolution of all directors without need for Member approval

not relevant

 Board can pass/change subordinate rules/by-laws BUT such rules/by-laws cannot be inconsistent with the Constitution itself 

yes, to ensure smooth transition from existing By-laws to new Constitution under the relevant legislation

Key elements of proposed Governance Charter Contemporary accepted good governance principles and practices is increasingly seeing organisations adopting a formal Governance or Board Charter to better describe and assure disciplined accountable and transparent governance arrangements concerning the operations of the Board, its Committees, the interface with management, internal organisational accountabilities and arrangements, codes of conduct, policies, practices and protocols.

Although the Club currently has reasonably disciplined internal governance arrangements in place, they warrant improvement and extension and have not been embraced within the umbrella of a comprehensive and detailed Governance Charter.

Attachment “A” to this Discussion Memorandum (2) contains a table of contents and an introductory statement as to the rationale for a Governance Charter, to give some idea to Members as to what might be included in such a document. It is contemplated that a Governance Charter, materially guided by the descriptors in Attachment “A”, will be adopted by the Board and will have the effect of sub-ordinate rules or by-laws in the terms of the revised Constitution to be adopted.

5.

Consultation Specific issues upon which Member feedback and consultation are invited at the second consultation meeting relate to the proposed revised By-laws/Constitution and the proposed Governance Charter.

1.

Are there any specific items of concern or items for clarification that Members would like to discuss concerning the proposed revised By-laws/Constitution or the proposed Governance Charter having read this Discussion Memorandum (2).

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6.

2.

Do the proposed revised provisions (i.e. that it is only the Members in general meeting by special resolution, rather than merely the Board at present, which can amend the By-laws/Constitution) give added comfort and protective assurance to the Members?

3.

Do Members believe there to be value in the Club’s governance framework being formalised in a Governance Charter, that meets contemporary accepted good governance standards, and that is transparently available to the Members?

4.

Are the Members supportive of receiving more detailed information of the skills, experience and attributes of prospective Board members so they may make more informed assessments of the candidates when voting for Board members;

5.

Do the Members require any further clarification that under the proposed company limited by guarantee structure under the Corporations Act their personal liability is ABSOLUTELY limited to $1 (ONE DOLLAR) only, and only in the case of an insolvent failure of the Club?

Next steps Following this second consultation with Members, the Club will then: 

summarise and share the key points arising from the two consultation meetings;



have due regard to the feedback provided by the Members in finalising matters; and



prepare the notices and other documents (including the new proposed Constitutions which satisfy the applicable legislative requirements leading up to the general meetings of Members at which formal resolutions will be proposed for consideration of Members (as per the anticipated timetable for the implementation of the proposal appearing in Annexure “B” to this Memorandum).

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ANNEXURE “A”

Governance Charter The Western Australian Turf Club Limited trading as Perth Racing

Documentary Integrity Control Action Adoption of this Charter

Date of Board Resolution

Effective Date Upon the registration of the Organisation under the Corporations Act

Authorised by Board

(*) (*) (*) (*) (*) (*)

to be completed as and when the Charter may be amended or varied from time to time.

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Table of Contents PART A GENERAL 1

Introduction

3

2

Purpose, Vision and Values

3

Board

PART B - GOVERNANCE RELATED INSTRUMENTS Appendix A Organisation’s Constitution and By-laws

Appendix B Structure of Board, Committees and Key Office Bearers and Accountability Flows

Appendix C Purpose, Objects and Values

Appendix D Proforma guidelines of governance structure and procedural workings for Committees

Appendix E(1) Governance Committee Charter

Appendix E(2) Audit, Finance and Investment Committee Charter

Appendix E(3) Risk and WHS Committee Charter

Appendix F Job Description – CEO

Appendix G Board Calendar

(Strategic Governance Issues)

Appendix H Director’s Letter of Appointment

PART B - GOVERNANCE RELATED CODES, POLICIES AND PROTOCOLS Appendix I Board Members’ and Executives’ Code of Conduct

Appendix J Conflict of Interest Protocol

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Appendix K Organisation Code of Conduct/Values

Appendix L Risk Management Policy

Appendix M Board and Management Performance Enhancement Policy

Appendix N Remuneration Policy

Appendix O Diversity Policy

Appendix P Communications Policy (with Members, media and other stakeholders)

Appendix Q Whistleblower Policy

Appendix R ESG Policy

Appendix S Workplace Health and Safety (WHS) Policy

Appendix T Discrimination, Harassment and Bullying Policy

Appendix T Privacy Policy

Appendix V Human Rights Policy

Appendix W Bribery and Corruption Policy

Appendix X Business Payment Policy

Appendix Y

Equine Welfare Policy

Perth Racing Member Consultation (2) - Respecting our Heritage while embracing the Future – Page ii

Introduction 1.1

1.2

This Charter is designed as an overarching statement of governance principles and policy: •

to prescribe a range of governance principles and practices to apply to the Group;

•

pursuant to which discrete instruments relating to matters relevant to governance within the Group can be generated and incorporated as appendices to this Charter; and

•

to set forth certain protocols relating to the functions, responsibilities and behaviour of relevant personnel within the Group.

The Organisation, as the parent entity on behalf of the Group, is committed to implementing high standards of governance. In determining what those high standards should involve, amongst other relevant governance guidelines and principles, the Organisation has had regard to standards generally endorsed for like organisations by relevant governance and director institutes.

The Organisation is registered with ASIC as an Australian public company limited by guarantee and therefore abides by the Corporations Act (as applicable).

1.3

The Charter takes into consideration the Constitution, Corporations Act and the WATC Act.

1.4

In 2025 the Organisation transitioned its structural governance framework from:

1.5

•

an unincorporated association albeit recognised under the WATC Act including with its Chair empowered as if the Chair were a corporation sole on behalf of the Organisation;

•

as an interim stage in order to ensure the Organisation’s continuity of being over the transition, to being an incorporated association under the Associations Incorporation Act 2015;

•

ultimately to registration as a company limited by guarantee under the Corporations Act. Pending the prospective repeal of the WATC Act, the Organisation’s governance framework needs to respect the parallel continuance of: (a)

the WATC Act (and the empowerment of the Chair in the terms of that legislation);

(b)

the Organisation’s Constitution also being adopted by the Board as “by-laws” in the terms of s.13 of the WATC Act.

1.6

This Charter is intended to complement the Constitution, and to constitute By-laws in the terms of the Constitution, however to the extent of inconsistency between this Charter and the Constitution, the terms of the Constitution prevail.

1.7

This Charter is intended to operate by way of a series of Sections and/or Appendices which may be added to or varied from time to time, the totality of which comprise this Charter.

1.8

A copy of this Charter is to be: (a)

kept with the Organisation’s corporate secretarial records;

(b)

made available to each Director and senior executive for reference purposes; and

(c)

made available to Members and stakeholders by disclosure on the Organisation’s web-site under its “Governance” section.

1.9

Relevant Sections and Appendices to this Charter will be the subject of specific communication and education to relevant personnel within the Group to assist them in meeting the Organisation’s expectations of them.

1.10

The Organisation accepts that merely by the Board adopting this Charter, of itself does not ensure the actual or cultural compliance within the Group of the principles and policies espoused by this Charter.

1.11

It is the Board’s commitment to work towards the principles and policies in this Charter becoming a practical and cultural reality for the Group in all respects.

1.12

This Charter has been adopted by resolution of the Board on the date appearing on the cover to this Charter, effective from the date also there appearing. It can only be amended or varied by resolution of the Board.

1.13

This Charter is to be the subject of periodic review and recommendation to the Board to ensure it remains contemporary and relevant to the circumstances and needs of the Group.

ANNEXURE “B” Anticipated Timetable Date

Event

22 April 2025

Initial advice of proposal in Club newsletter

14 May 2025

Publication of Discussion Memorandum #1

27 May 2025

Member meeting (1) for consultation purposes on the overall initiative

8 July 2025

Publication of Discussion Memorandum #2

15 July 2025

Member meeting (2) for consultation purposes on proposed revisions to By-laws/Constitution

August 2025

Report to Members on main feedback received from Member consultation

October 2025

Members to approve incorporation (Associations Incorporation Act) and adopt proposed revised By-laws/ Constitution at the Club’s AGM

December 2025

Meeting of Members to approve transition of registration and adoption of proposed revised compliant Bylaws/Constitution.

Q1 of 2026

Approval of transfer of registration by ASIC and effective date of revised compliant By-laws/Constitution.

Feb/March 2026

Effective date for Completion of Initiative