In recent news, a club who expelled a member has had to pay $50,000 plus court costs to the member, as well as reinstate their membership. This has not been the first time that a club has had to pay damages to an expelled member and had to reinstate them, and this is not to say there are members that we may have to expel from time to time. However, these penalties come about predominantly from the club not following its constitution, or the club’s constitution does not set out due process for managing a perceived recalcitrant member or a member they believe has not acted in the best interest of the club.
An important point I always highlight in my corporate governance workshops is that boards and committees need to understand that today we live in a litigation society. Nobody is responsible for their own stupidity and people are prepared to fight for their rights and natural justice; often the outcome can cost the club dearly and cause significant embarrassment.
No sporting club member would participate in a sport if they were not aware of the rules; a club constitution is the rules of the game so to speak for club directors and committees.
New changes to the Queensland Associations Incorporation Act coming into effect over the next few months, is strengthening members rights to natural justice in disciplinary matters. It is just one of several changes that is going to require most clubs incorporated under this Act to substantially review their constitution.
Many constitutions are old and too long, they are not easy to read and understand and do not reflect modern language, standards, or ethics. They contain many rules that are not required or not valid, and quite often limit the club board or committee to manage the business in an efficient and effective manner. The worst-case scenario is that they can sometimes leave clubs at risk and open to unreasonable challenges from members or litigation.
The lessons learnt from this case is to make sure you know your clubs’ rules and follow them, or it could cost you dearly. If you have concerns about your constitution and if it reflects what your club needs, or if you would like some guidance, drop me an email at email@example.com or go to our website https://dws.net.au/consulting-services/governance/ to learn more.