This proposal was brought to the Fellowship at the 2007 ISAD AGM held in Vienna on 14th October and will now be circulated to the Fellowship by email for consultation. ISAD seeks the views of the Fellowship on this proposal. Please send your comments to the ISAD administrator at: firstname.lastname@example.org
Any decision to change ISADs meeting arrangements will require an assenting vote during the next AGM in Cape Town, South Africa in March 2008.
Under new UK Charity legislation it is now permissible for ISAD to chose not to hold an Annual General Meeting (AGM) but instead to hold meetings on a schedule that better suits the organisation. In ISAD's case on a biennial basis in line with the conference programme. There are a number of reasons for ISAD to consider this.
1. Difficulty selecting a suitable meeting during which to hold the AGM.
ISAD, as an international organisation strives to hold the AGM at a meeting that maximises the number of Fellows who will be able to attend. This must also be balanced with the availability of the Executive Committee. Travel and accommodation expenses incurred must be kept at a minimum which often restricts the AGM to a European venue.
2. There is significant cost involved in holding an AGM. Room hire, catering, travel and accommodation are all unavoidable expenses.
3. AGMs outside of the ISAD conference are more likely to be poorly attended which makes achieving a meaningful quorum very difficult. If there is no genuine representation decisions must be deferred which makes expenditure invested in the meeting wasteful.
4. It may be more efficient to reassign the administrative functions of the AGM to electronic communication. I.e. distributing the accounts and annual report - an amendment to the governing document must be made to allow this and individual consent from each Fellow to receive them in this format.
5. By moving to a biennial model it may be possible to enhance the importance of the meeting, giving it more significance and consequence.
The Executive Committee and wider Fellowship will need to consider the benefits and potential drawbacks of moving to a biennial model which are set out below for discussion.
How can ISAD replace the AGM functions?
In order to ensure good governance during the years in which no AGM is held ISAD proposes the following;
1. Formal Executive Committee arrangements with quarterly teleconferences. It is possible to use free technology, such as Skype or MSN Messenger, to enhance meetings with webcam communication if desired.
2. ISAD would present the Presidents Annual Report and Accounts to the Fellowship via email. The report would also be posted on our website for Fellows to review.
3. The ISAD forum could be utilised more actively to poll the Fellowship on individual topics.
4. Moving to an entirely electronic communication strategy will increase opportunities for communication. Travelling to meetings can be prohibitively expensive and time consuming. By offering greater participation via the internet ISAD should be able to improve opportunities for the Fellowship to participate.
The legal position
ISAD has sought legal advice from our solicitor. Issues for consideration and potential resolutions are outlined below.
INTERNATIONAL SOCIETY FOR AFFECTIVE DISORDERS
AMENDMENT TO AGM REQUIREMENTS
To amend the memorandum and articles of International Society for Affective Disorders (ISAD) so that AGMs are held on a biannual basis from September 2008.
The current articles include a requirement that the Charity holds an AGM in March every year (Article 2.8). At the AGM the members (Article 2.10):
Receive the accounts
Receive the executive committee's report on the charity's activities
Accept the retirement of the Executive Committee members wishing to retire or retiring by rotation
Elect members of the executive committee (until the second AGM following appointment (Article 3.7.8))
Elect a president to act as a chairman for a two year period
Elect a secretary to serve for a two year period
Elect a treasurer to serve for a two year period
May confer the honorary title of patron
May discuss and determine any issues of policy or other business presented by the executive committee
CHANGES TO THE LAW:
From 1 October 2007 amendments to the rules relating to meetings of companies limited by guarantee will be introduced as part of the new Companies Act 2006. Amongst the provisions, the requirement to hold an AGM is abolished for all private companies, including charitable companies limited by guarantee. However, it is likely that this provision will be overridden by the express requirement to hold an AGM (Article 2.10) and to take advantage of the relaxation it will be necessary for ISAD to amend its Articles.
From 1 October 2007, ISAD may therefore amend its articles so that the charity is only required to hold AGMs on a biannual basis. The amendments would be made by resolution of the members.
However, there are a number of compliance issues which would have to be addressed in light of such a change:
1.ACCOUNTS In the articles there is a provision that the ISAD accounts
will be presented to the members at the AGM. The previous legal requirement
for this has now been amended in line with the abolition of the requirement
to hold an AGM. Instead, a copy of the accounts must be sent to every
member of the charity before the filing date at Companies House. The new
filing date for accounts will be 9 months instead of 10 months under the
New Act, with effect from 6 April 2008.
However, the provision in ISADs articles (2.10.1) will require specific amendment to enable the accounts to be presented by post, rather than at the AGM.
2.RECEIPT OF EXECUTIVE COMMITTEE REPORT There is no statutory requirement to provide members with this, although there is currently a requirement to do so within the articles. If the committee wishes to continue to present the committee report at the AGM, every other year, then the articles can remain unchanged. In the years when no AGM takes place the committee report may be sent out to members by post.
3.APPOINTMENT OF EXECUTIVE COMMITTEE MEMBERS AND OFFICERS OF THE CHARITY The AGM is the forum at which the Executive Committee is appointed by the members. Consideration needs to be given as to whether this will work for ISAD in practice if the AGM is held only every other year. There are powers in the articles for the committee to co-opt members to fill a vacancy between AGMs which could be used if necessary.
4.RETIREMENT OF EXECUTIVE COMMITTEE MEMBERS AND COUNCIL MEMBERS AND OFFICERS OF THE CHARITY At present the term of service of committee members and council members is determined by the date of the second AGM following appointment. If AGMs are only to be held biannually then it is recommended that references to "second AGM" throughout the articles are amended to "every AGM". As a result of this change the length of service as a committee member would remain at approximately 2 years.
5.AGM OR GENERAL MEETING? As there is no longer a requirement to hold an AGM, the charity could remove the reference to an AGM altogether. However, this would necessitate alternative arrangements for the appointment and retirement of committee members and staff, which may prove more cumbersome than a biannual AGM.
6.INCLUSIVITY The aim of an AGM is to provide the executive committee and its officers the opportunity to explain their management of the charity to the members. It also provides the members of the charity with an opportunity to ask questions before voting on business items on the agenda. There are no legal reasons why this opportunity should be provided on an annual basis. However, careful management and presentation of the reasons for the changes to the members may be required in some charities.
My advice on whether you may send accounts and other information to members by email instead of the post.
The advice is that schedule 5 of the Companies Act 2006 allows companies to send documents to company members in electronic form subject to members' approval. It is not necessary to ask the members to pass a resolution but the company does need to obtain individual consent by sending a request letter to each member asking for individual agreement to receive documents/information in electronic form and to supply an address. Actual consent is needed so in practice you may find you have to operate two systems, post and email, to accommodate those who do not consent.
We can supply a request letter if you would like us to.
It is also possible to supply information to members via the website but the process is more complex and we would have to give you further advice on how to do that if you need it.
BLAKE LAPTHORN TARLO LYONS
Please send your thoughts and comments to the ISAD Administrator at: email@example.com