Federal Court brings ACS's legal structure changes to a halt

It comes after the Federal Court ruled that the votes cast during the ACS's special meeting in October were "invalid".

The Australian Computer Society (ACS) has announced that its initial plans to change its legal structure will now be reviewed after a Federal Court ruling voided the votes favouring the change.

Justice Wigney ordered the not-for-profit organisation to "set aside" the outcome of its special meeting that was held last October. 

The meeting supposedly saw 75% of eligible ACS voting members vote in favour of the organisation's proposal to change its legal structure from an incorporated association to a company limited by guarantee 

As part of the overhaul, ACS wanted to change its name to Australian Computer Society Limited and replace existing rules and objectives of the society with a new constitution under the Corporations Act.

Under the new constitution, it would have meant that only members of the ACS professional group would be eligible for consideration on the future board of directors, and that its membership would be limited to individuals rather than companies.

The organisation would also be regulated by the Australian Securities and Investments Commission, rather than Access Canberra.

Wigney concluded however, that both the special meeting and votes were "invalid".

He pointed to how an initial email from the ACS about its intention to make structural changes sent on 3 July 2019 was not shared with all members.

"It was only sent to members who were 'active', had paid their membership fees, and had not opted out of receiving 'marketing' communications from the Society," he said.

"It was common ground that approximately 1,800 active members did not receive the 3 July 2019 email because they had opted out of receiving marketing communications."

The court case was brought forward by ACS fellow and former director Roger Clarke, who Wigney said was one of those ACS members that did not receive the initial email and was only made aware about the proposed changes on 11 October -- two weeks before the special meeting was scheduled to take place.

Wigney also pointed to how there were inconsistent processes in place regarding the way ACS company secretary Andrew Madry handled proxy votes, which ultimately impacted on the outcome of the meeting but could have been "readily and easily resolved". 

He also concluded that ACS president Yohan Ramasundara's conduct of the meeting was "manifestly unreasonable", pointing to the decision to "strictly" limit the debate of the motion to two-minute presentations with no questions as an example.

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Clarke welcomed the decision by the Federal Court and has invited the ACS to continue the debate with members about the structural change.

"While we accept that the ACS needs to evolve, we are concerned that over the past 18 months the members are having far less of a say in the future of the association," he said.

"The ACS was established as an association for its professional members, but the impact of the proposed changes would destroy the ACS as a professional society, and effectively turn it into an industry association or marketing corporation. Senior members should have a greater role to play in determining the future path of the ACS."

Clarke had previously labelled the proposal for the change as a "hijack" by board members and it was intended by the ACS executives to be a "coup de grace".

He argued how the new structure would have centralised all power in the board; made no provisions for any member involvement; saw member-driven branches be replaced by "subservient divisions"; and enabled continuity of power by a clique.

"The priorities of the management committee and some branch executive committees have swung a long distance away from member services and much more towards commercial activities. As a result, the society's core values have been undermined," he previously told ZDNet.

Ramasundara said the organisation was "naturally disappointed" but respects the court's decision.

"No process is ever perfect, and for a not-for-profit membership body we have shown an exhaustive effort to keep all members involved in the consultation processes, and to participate in the resolution process. That said, we respect the court's decision," he said in a statement.

"We all have the objective of a united profession with a common goal of maximising the outcomes for our nation. We will take the key learnings from the court hearing, and carefully consider how we can improve the process to transition into a company limited by guarantee."

The Federal Court has also ordered the ACS to attend a case management hearing in February that will consider what further steps are needed, including what, if any, orders of directions should be made about future meetings held by ACS.  

"All members will be kept informed of this process as it develops," Ramasundara said.

ACS CEO Andrew Johnson previously told ZDNet the unanimous decision by the management committee to put forward the proposal was part of the ACS' five-year strategy.

He said one of the sections within the strategy highlighted "the need for ACS to review its corporate form and governance structures, and to streamline its decision-making processes to enable it to be agile in the future, in order to more effectively achieve its objects and deliver its services".

Johnson said the CLG structure is the most common form of incorporating a national membership association under Commonwealth law, which means even under the structure change, ACS would remain as a membership body.  

"Member centricity has been one of the guiding principles of change," he said at the time.

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