1 . Our Club ’ s Constitution is up to date .
Clubs should ensure their constitution is regularly reviewed . The constitution is a club ’ s primary governing document – an out of date constitution can have real impacts on the club ’ s operations .
For instance , if the club is about to discipline a member , it will need to check whether the process is compliant with its constitution , and , whether the procedure in the constitution is in turn compliant with the rules of natural justice and other applicable laws . If not , the disciplinary procedure may be flawed to the extent of allowing the member to successfully challenge the outcome .
Some constitutions impose restrictions on how much the club can spend or borrow , and this may need to be changed before the club starts a major development .
As the constitution can only be amended by special resolution of the club ’ s members in general meeting , there are time and cost implications involved in doing major updates . Regular review means that changes to the constitution can usually be included in the matters considered by the members at the Annual General Meeting . This may reduce the need to hold special general meetings to update the constitution over time .
2 . Our Club has an effective compliance framework .
Compliance is not optional for a well-run club . Clubs are highly regulated , and it can be difficult to stay up to date with the legislation and incorporate compliance into dayto-day operations and strategic planning . However , clubs must make sure they are across this .
We can all learn several lessons about the importance of compliance and good corporate governance from disciplinary decisions handed down by the Independent Liquor & Gaming Authority . Over the last two years , clubs like Parramatta Leagues Club and Paddington Bowling Club were subjected to rigorous investigations . Ultimately , the Authority found these clubs guilty of a series of compliance breaches which led to legal sanctions , bad publicity , and in Paddington Bowling Club ’ s case , the closure of the club .
Some of the issues identified in those decisions may seem like ‘ technicalities ’ when compared with other management issues in a club . For example , the Authority found that Parramatta Leagues Club failed to have management contracts approved by the Board or give formal notice to top executives that they were , in fact , top executives . Similarly , former CEOs at Parramatta Leagues Club and Manly Leagues Club were being paid bonuses based on the Club ’ s total revenue ; this meant the bonus was calculated by reference to liquor sales and gaming machine revenue , which ILGA held was a breach of the Registered Clubs Act .
Ultimately , these clubs were brought undone by a range of breaches , many of which involved regular compliance tasks that were not being completed . The Authority has taken a firm view that widespread non-compliance reflects poor management and governance across a club and is worthy of sanction . These decisions highlight the consequences of ineffective leadership and not obtaining proper and regular advice , especially as some of the breaches could have been easily resolved . Instead of being reactive , a club is best managed when systems are put in place in advance to at least minimise issues arising .
3 . Our Club has an effective contracting process .
The Authority ’ s decisions also show that when an issue arises which warrants an investigation of a club , it may also result in a comprehensive audit of the club ’ s operations , including contracting procedures . Effective contract management involves more than just negotiating a good deal , though this is obviously the primary objective . Unfortunately , the best deals can come undone if attention is not given to ensuring the contract is properly completed and complies with the applicable law .
As an example , legislation came into effect in November 2016 regarding contracts with small businesses . Clubs must now take more care when presenting a ‘ standard ’ contract to a business with less than 20 employees for an upfront price of less than $ 300,000 ( if less than a year ) or less than $ 1 million ( if the contract term extends beyond a year ). Any terms deemed to be unfair under this legislation may be declared void . Further , this may result in reputational damage and affect the club ’ s standing in its community . Clubs may deal with many small businesses , typically including cleaners or caterers . A club should ensure that not only has it sought proper advice when negotiating that contract , but it has also done sufficient due diligence on the other party to determine whether this law will apply .
A common contracting issue is a club failing to identify when the Retail Leases Act 1994 ( NSW ) applies . This Act sets out a number of pre-contract steps that must be followed or they can have significant consequences . For example , if a club fails to provide a prescribed disclosure statement at least 7 days before entering into a contract to which this Act applies ( which might commonly include a catering
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