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Letter to Members and Stakeholders From the auDA Board 27 July 2018

Bacon Farmer

Top Contributor
After being humiliated by the majority of voters seeking to oust the Chair and other independent directors, the auDA board have fired back:

https://www.auda.org.au/news/letter-to-members-and-stakeholders-from-the-auda-board/

They appear upset that it has been pointed out that employees from 4 domain vendors together now have a controlling membership stake in the demand member class and will probably have the ability to determine the new membership model.

They keep quoting the government review in their communiques, here's one they might like to quote in future:

"In the first half of 2017, the board initiated a Code of Conduct for its members without input from its membership, imposing restrictions on behaviour as a condition of membership. It further determined it would remove board meeting minutes from the auDA website, stating that publishing them was ‘not best practice governance’.13

In response, members triggered a special general meeting in July 2017. The Chair resigned immediately prior to the meeting. Following the meeting, publishing of minutes was restored and the board revoked the Code of Conduct, resolving to work in partnership with members to develop a new Code.14

A number of stakeholders have flagged that the quality of the minutes remains a point of contention for auDA members.

Taken together, these events point to a lack of stability and transparency, an organisation undergoing significant change, and an interventionist membership base concerned about the direction of the organisation."

And "Typically, organisations with a monopoly position are subject to stringent regulatory requirements which is not the case with auDA.
The Review has reflected on how appropriate checks and balances can be established in the absence of market forces or regulation."

At the moment the interventionist membership base is the only check and balance mechanism in place standing up for Australia.

The people in control at auDA have access to a $12 million "marketing initiative" [nothing has been published on how this is to be spent - how's the governance on that?]

I also note the subtle difference since the minutes of 18 June where,

"The Chair noted that he could not see any basis for Mr Connell discriminating aginst the proposed members, given that auDA's Constitutional requirements had been satisfied and that the members had passed auDA's verification protocols in accordance with auDA policy."

And from today's letter, auDA's verification protocols and auDA policy is mysteriously missing [perhaps they're on the auDA website somewhere?]

"...955 members being admitted at the Board meeting on 18 June 2018. All applications for membership are subject to a proper application process and the Board was satisfied on 18 June 2018 that the applicants complied with the constitutional requirements for membership."

They also say "In May 2018 auDA wrote to a number of industry associations, peak bodies, telecommunications providers, internet services providers, registrars and other organisations and encouraged them to consider joining, and to encourage their members and employees to also consider joining auDA."

How come only employees of 4 domain vendors signed up?

Were they given incentives?
 

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Scott.L

Top Contributor
upload_2018-7-27_21-33-19.png

Exactly what was this New membership Application Process procedure adopted by the Board in March, and why have we not seen it?

Recommendation 10.

auDA must provide transparent Membership Guidelines. Previously, it was minuted in auDA minutes that each member was to be telephoned and required to answer a couple of simple questions about why they joined.

What is the new membership applicant policy?
Mr. Leptoff a bridge said, its on the auDA website, then he said its in the minutes, then he just didn't know...
 

Bacon Farmer

Top Contributor
In a conflict between the company's constitution and the Corporations Act, they don't work together as you claimed at the SGM, do they Mr Chair.

It's probably time to show some ethics and do the right thing.

If you need help understanding what that is, just look at what the majority of members want.
 

snoopy

Top Contributor
In a conflict between the company's constitution and the Corporations Act, they don't work together as you claimed at the SGM, do they Mr Chair.

It's probably time to show some ethics and do the right thing.

If you need help understanding what that is, just look at what the majority of members want.

Where there is a conflict between an Act of Parliament and a constitution, the Act of Parliament will prevail. You can't take away statutory rights of members via the constitution.

Indeed the Corporations Act specifically states this at that section. The act, at that section is all about protecting the rights of members and giving them a voice. As ScottL posted in the other thread auDA admitted that s.203D would prevail at the time of the last SGM.

Removal by members--public companies
Resolution for removal of director

(1) A public company may by resolution remove a director from office despite anything in:

(a) the company's constitution (if any); or

(b) an agreement between the company and the director; or

(c) an agreement between any or all members of the company and the director.
 

Scott.L

Top Contributor
The question about whether the constitution contradicts the Corporations Act is made complex by a long standing interpretation which in my opinion is itself the contradiction.

Its my belief;

"Affirmative Vote" shall mean the Classes of ONE MEMBERSHIP not TWO.

it could be argued that the Constitution is not Contradictory to the Corporations Act. The constitution refers to, ‘each class of Members’ but the use of the term “Affirmative Vote” represents the Majority of both classes, combined as ONE MEMBERSHIP, and Not separated as we are led to believe.

16.2 Resolutions

A resolution of Members will only be taken to be carried if the requisite majority comprises the following:
  • in the case of an ordinary resolution of Members, there is an affirmative vote in each and every class of Members of more than 50% of Members present and entitled to vote (in person or by authorised representative or proxy);
In my opinion, "Affirmative Vote" shall mean the Classes of ONE MEMBERSHIP not TWO is calculated together in reaching a Requisite Majority of more than 50% to pass a resolution. This perspective lends itself to the logical interpretation of both the Constitution and the Corporations Act. [why would the constitution contradict the corporations Act?]

To reinforce this perspective:

Under the Corporations Act 2001 (Cth) (Corporations Act), members of either a proprietary or public company have the ability to call a general meeting of a company if members with at least 5% of the votes that may be cast at the general meeting request it.

If auDA Management considered the SGM was allowed to proceed under the terms of Managements perspective; by allowing a separate vote of both classes to determine the outcome of the resolution, then WHY was the SGM allowed to proceed without 5% of both Classes of Members?

A company’s constitution may also contain provisions which prescribe an alternative means for members to call a general meeting. unfortunately the only provision to call a general meeting under the company constitution is via 14.3

14.3 Convening of General Meetings
The Directors may whenever they think fit and must upon a requisition made in accordance with section 249D of the Corporations Act convene a general meeting of auDA.

Calling a meeting of members is subject to 14.3 of the constitution via 249D of the Corporations Act and, the removal of Director(s) are subject to 203D of the Corporations Act via 16.2 of the Company Constitution requiring an Affirmative Vote by each class of Members representing a Requisite Majority of the Membership, and via the Corporations Act requiring 50% Majority despite the company constitution.

auDA bent the process to suit their aims.

An offence based on section 203D is an offence of strict liability. This means that there is no defence to this offence.
 

snoopy

Top Contributor
[why would the constitution contradict the corporations Act?]

Is the constitution older than the provision (203D) in the Corporations Act? Maybe nothing like 203D was around when the constitution was written?
 

snoopy

Top Contributor
=

"In the first half of 2017, the board initiated a Code of Conduct for its members without input from its membership, imposing restrictions on behaviour as a condition of membership. It further determined it would remove board meeting minutes from the auDA website, stating that publishing them was ‘not best practice governance’.13

In response, members triggered a special general meeting in July 2017. The Chair resigned immediately prior to the meeting. Following the meeting, publishing of minutes was restored and the board revoked the Code of Conduct, resolving to work in partnership with members to develop a new Code.14

By the way, Ian Hanke "auDA spokesperson" in the media, is now telling auDA management to vote in a code of conduct via SGM as soon as 955 members can vote to prevent members from speaking out about auDA in the the media and at auDA meetings, and to remove those who do speak out from the membership base.
 

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