The National Council wants to consult Members
about changes to the Society’s Articles of Association
It is thirteen years since the Society’s Articles of Association
were changed. In the intervening
period the National Council (NC) has recognised a number of difficulties
and deficiencies in the
current structure and appointment of the NC.
Changes are also needed in line with current legislation and to make
the Articles more suited to how we want to operate in the 21st century.
They also need to reflect modern principles of good governance and
the effective separation of policy development and strategic thinking
from the executive responsibilities of the Chief Executive and senior
staff. A further catalyst for change has been the 2006 changes to
company and charity legislation, as a result of which some of our
Articles are in direct contravention of the Companies Act 2006 (the
Act).
We set out below the possibilities:
• those changes that must be made;
• those where change is possible but we propose no change;
• opportunities for change arising from changes in the law which
we do propose to take; and
lastly
• changes that are possible and desirable for good governance
We hope that you will help us by reading and commenting on these proposals.
We have numbered the possible changes to help you make your comments.
We have not included any proposed new text as that will not be possible
until we have taken legal advice and know what has to be included
or removed.
As a reminder, the Society is currently a limited company and a registered
charity. It is a member based organisation. Our current constitution
takes the form of a Memorandum of Association and Articles of Association
last amended on 11 November 1995.
The proposed timetable:
We would like to bring the revised Articles to the Annual General
Meeting on 8 November this year rather than calling a special General
meeting early next year. This will allow any changes to the structure
of the NC to be implemented in November 2009.
The proposed changes are less fundamental to the structure of the
Society than those made in 1995 so we intend to rely upon this written
consultation and receipt of your comments by letter, fax or email
(see details below). The NC will consult the Society’s solicitors
and publish its recommended revisions to the Articles in the Final
Notice of the AGM, which will be issued a little later than usual,
at the end of September. All Members will be able to vote on the changes,
whether or not they are able to attend the AGM as one change we have
to make, regardless of what the Articles currently say, is to allow
proxy voting.
Our overall intention
do you agree?
1 To re-write the Articles in plain English so that they are easier
to understand.
The changes we are obliged to make
you have no choice
2 Proxy voting is prohibited in our current Articles
but must be permitted under the Act.
3 Approval of written resolutions: The Act reduces
the percentage of members required to approve such a resolution from
100% to 75% (special resolution) or 50% (ordinary resolution).
Some changes we are not proposing to make
do you agree?
4 Charitable Incorporated Organisation (CIO) The
Charities Act 2006 introduces a new entity, the CIO. Conversion might
be helpful to dual regulated organisations like the
Society which is both a registered charity and a registered company.
This option is not yet available and the details of the controls to
be exercised by the Charity Commission are being
developed but, on information currently available to us, we do not
believe that it would be
advantageous to the Society so we have no immediate proposals for
changing the
Society to a CIO.
5 The Company Secretary The position of Company Secretary
is no longer obligatory for
private companies but can be retained, in which case the office holder
has legally
prescribed duties and powers under the Act; and will continue to be
registered at Companies
House. We propose to retain this post to ensure we have a person specifically
responsible
for ensuring compliance with requirements of Company law.
6 Annual General Meeting TheSociety is no longer
obliged to hold an AGM. As a member based organisation we propose
to retain the obligation to hold an AGM.
7 Reduced notice period for AGM We could reduce the
notice periods for calling a general meeting but see no advantage
to the members in so doing.
8 Percentage of members required to call a general meeting
Our Articles require
only12 members to call a general meeting. The Act now allows 10% of
members to call a meeting but to facilitate the democratic process
werecommend that we opt to require 50 members or 5% of the membership,
whichever is less, to call a general meeting.
9 Annual Accounts There is no longer an obligation
to lay accounts before a general meeting but simply to provide them
to members on filing at Companies House. We propose to continue to
lay accounts at the AGM.
10 Annual Audit We propose to continue to require
that our accounts are audited. The
alternative is to rely upon the new thresholds in the Act which on
current turnover make the Society able to claim exemption from a full
audit.
Some changes we would like to take advantage
of, and see as beneficial to the Society
do you agree?
11 Short form annual report and accounts It is now
possible to issue such a document, based on the Annual Report and
Accounts to members. The form and content of these is set out in the
Act, as is the requirement that all members, who request them, can
receive a full Annual Report and Accounts at no cost. Given that not
all our members are interested in the detail we
recommend that we opt to provide short form Annual Report and Accounts
as standard.
12
Making use of Electronic Communication with members
It is now possible to use electronic communications (both e-mail and
via a website) to communicate with members, rather than relying upon
notices in writing sent through the post. The way in which we can
use electronic communications and the way in which we must seek the
agreement of members to do
so are set out in the Act. Given the rapid growth in electronic communications
we would like to change the Articles to permit e-mail and website
communication with those members who want it but we will of course
retain the option of paper copies through the post.
Some changes that are required to make the
governance of the Society more effective
Introduction
The NC rarely fills all its vacancies. The complement is 18 members,
which is too large for a council that has no executive functions.
Each member serves a maximum of six years and there is a requirement
that one third of the members must stand for reelection each year,
regardless of the number of existing vacancies.
Half of the members are elected nationally and half are regionally
elected thereby retaining a link
with the Society’s former regional organisation. The electoral
regions are as they were pre-1995 and now bear little relation to
current local government boundaries or to the Government Office Regions
used by the Arts Council and others likely to provide sources of funding
for local projects. Since 1995 the importance of the regions to the
Society’s governance has declined and the links between the
regionally elected members and the regions that they nominally represent
has lessened until they are almost nonexistent.
As a result since 1995 the maximum number of regionally elected members
has been 8 and
the minimum 3. London is the only region that has always been represented.
Regardless of any decision to keep or drop regionally elected members
the NC proposes to redraw the boundaries of the regions to which members
are assigned to reflect Government Office Regions and so assist fund
raising, for example, to extend the Society’s pilot regional
programme, Take 6, to other regions. In addition the NC commits to
develop a regional strategy to engage with all those who are developing
folk arts in the regions and so expand its outreach programme coherently
through partnerships.
It is now common for Arts charities, like the Society, to appoint
to their Board (NC) members from outside their membership. This would
have the advantage of expanding the pool from which we can draw NC
members. Additional members from the wider folk world and from
the national arts community, business community or from the political
community could add
status, expertise and influence to the Society and greatly assist
it to achieve its objects and to deliver its major projects.
This suggests that we should review:
• The size of the NC
• The retention of the division between national and regional
members
• The term of office for NC members and the way in which we
renew and refresh the membership of the NC
• Ways to recruit or directly appoint NC members with necessary
expertise and influence as well as interest and enthusiasm so as to
ensure the maximum knowledge base and benefit for the Society
• The direct election of the Treasurer by the membership as
in law all NC members have
responsibility for the financial viability of the Society.
We
therefore make the following recommendations and seek your views on
the following issues
13 Elected NC members We recommend 12 elected members
to allow scope for some appointed members (see below). We recommend
that co-option to fill vacancies is retained.
14 We recommend that all elected NC members should be elected
nationally and there
should no longer be any Regional members.
15 Appointed NC members We recommend that the NC
should be able to appoint up to 4 NC
members, giving a maximum of 16 NC members.
16
NC Chairman We recommend that the chairman should
be chosen by the NC from the
elected NC members.
17 The term of office for elected NC members We recommend
that elected NC members
should serve no more than six years without a one year break and that
there should be a
maximum permitted total service on NC. We recommend that we should
devise our rules
to ensure a fixed minimum number of vacancies at each AGM, taking
account of existing vacancies as well as retirements by rotation.
18 Appointment of Honorary Treasurer We recommend
that the NC takes responsibility for
the appointment of the Honorary Treasurer.
How
to respond to this consultation
The current Memorandum and Articles are available as downloads via
the links below or you can write to Cecil Sharp House 2 Regent’s
Park Road. London, NW1 7AY for a copy enclosing a large (A4) selfaddressed
envelope stamped for 42 pence.
You can download a form with a list of the numbered questions via
the link below to help you in
making your reply or just write in with your comments, referring wherever
possible to the
numbered questions.
Responses can be posted or faxed to the Company Secretary at Cecil
Sharp House (mark your envelope/fax “consultation”) But
we would prefer an e-mail to: secretary@efdss.org.
Please reply as soon as possible, even if it is just to say “Yes”!
The deadline for comments to be
considered at this stage is 31 July 2008 to allow time for considering
the responses, drafting the changes and preparing the papers for the
AGM - when you will be able to vote by proxy even if you are unable
to attend the meeting.
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