Changes to our Articles

We will be asking for Educational Member approval, through a Special Resolution, at the AGM on 12th April 2011, for changes to our Articles. The document below shows the original Articles with all changes shown for the proposed revised Articles.

To help Members we have compiled a list of FAQ’s to assist in explaining the changes. As we are asked questions by Members we will add to this.

What are the Articles?

The Articles are a governing document which is required by law. They include our Charitable Objects and detail how meetings such as the AGM and Board Meetings are conducted. They are registered with the Charity Commission and Companies House.

Why are we changing them?

The original Articles were written in 2004 and following the Company Act 2006 they need to be updated to ensure they are up to date with current law. This also gave us the opportunity to update the Articles to reflect the organisation as it stands today.

How do we change our Articles?

We have employed a solicitor - Anthony Collins Solicitors LLP – to advise us on the changes to ensure we comply with the law. We have to receive Charity Commission consent for specific changes such as Article 6.4. We have to receive approval from Members to adopt the revised Articles.

Wasn’t this agreed at the last AGM?

At the 2010 AGM and throughout the Governance Review Members have had the opportunity to input into these changes. These are the key areas that Members agreed to at the 2010 AGM:

• Widening Membership to include Adult Education and Work Based Learning providers
• Elect non-university/college Member trustees onto the Board and noted that we have already received expressions of interest
• Clarify definitions of regions and countries
• Removal of Affiliate Members and other changes to ensure the constitution is up to date
• Introduce role descriptions for the Board

These are highlighted and colour coded in BLUE for ease of reference.

What else has changed?

There is one new amendment – Article 6.4. This is to include the position of the CEO as a Trustee and Director of the Company. It is the view of the EAUC Board that this is important as:

• It reflects the reality of EAUC governance, in which the CEO has significant strategic responsibilities. This approach will help to engage trustees more closely in the direction of the organisation and further build relationships between non-executives and the CEO.
• It will give the CEO direct accountability to voting members of the organisation for Board decisions, the same accountability as non-executives. This will maximise the CEO accountability across the membership of the organisation, rather than be limited to the Board. As a membership organisation this is seen as vital.
• The structure embodies the tension between conformance and performance. It will combine the CEO’s detailed knowledge of the business with the more detached scrutiny of non-executives.
• This move emulates our university and college Members own structures who have deeper accountability through the CEO being a full voting member of the Board. Such as the governance of colleges, where the CEO is a member of the Board and also are registered charities.
• The CEO as a full voting member of the Board brings stability and consistency to the Board. This is especially relevant in financial and/or political turbulent times for the Further and Higher Education sector where there is significant risk of losing Board members through sector redundancies, bankruptcy and mergers.

There are significant mechanisms in place to avoid any conflict of interest.

These are highlighted and colour coded in GREEN for ease of reference.

What are all the other changes?

The other changes in the document are updates to reflect changes in the Company Act 2006 and to ensure we are compliant with the law. Some wordings have also been updated to ensure the document is consistent and clear throughout. These changes are covered by law and are mandatory and therefore cannot be challenged by Members.

What happens now?

We are inviting Members to raise any questions or queries they have on the revised Articles PRIOR to the AGM. This will enable us to ensure a full and transparent response is given. All questions and responses will be posted on this page. Please contact Fiona Goodwin (Company Secretary). Due to this approach we aim to have answered any queries from Members and hope for a successful vote at the AGM.

What happens at the AGM?

At the AGM there will be a Special Resolution for Members to vote on (only Educational Members are eligible to vote). For the revised Articles to be adopted a 75% majority of those present, and eligible to vote, must agree. The voting procedures are by a show of hands of every Educational Member present in person through its authorised representative. The voting section in the Articles is at 8.6 – 8.13.

What if I cannot attend the AGM?

If you cannot attend the AGM, you can still vote by proxy. You can either vote for your decision or you can nominate a person to represent your organisation if someone else from our organisation can attend. On the proxy form you can specify your vote or you can allow the proxy to vote as they think fit or abstain. Proxy forms will be sent out to all Educational Members with the AGM papers. Only one person from an Educational Member organisation can vote. Company Members and Strategic Partners cannot vote.

What happens if Members vote against the changes?

If Members vote against the changes, the Board will take on Member's comments and revise the Articles to reflect these. The Board will then call to hold an Emergency General Meeting (EGM) to present the revised Articles to Members and will present a Special Resolution vote for the revised Articles. Certain sections of the Articles have to be accepted in order to be compliant with the Company Act. If there are objections to the revised Articles at the AGM, the Chair will split out each of the main areas (the BLUE and GREEN sections) and hold a separate vote for each area. This will assist the Board to adopt the Articles as soon as possible to ensure we are legally compliant whilst any further changes are made.

When did we agree that 3 trustees may not be working in a University or College? Did we vote on that at the last AGM?

The 3 trustees outside of a university or college was included in the Governance Review consultation which went out to Members back in 2009 (you can see this at https://www.eauc.org.uk/eauc_governance_review). This was also discussed at the 2010 AGM (refer to point 6 in the minutes). There were no objections from Members on this throughout the consultative process or at the 2010 AGM so the Board, with the support from Members, has progressed with this and included this item in the changes to the constitution. Members will then be asked to vote on this at the forthcoming AGM as part of accepting the revised constitution.

Is point 9.3 saying that Members can nominate people they feel should sit on the board as well as the trustees?

Yes point 9.3 says that Members can propose an individual (as long as they consent) from a Member organisation (not from their own organisation). If this is approved by the Board the nomination will then be put to Members for vote and appointment. This is not a change, except that they are not allowed to nominate someone from their own organisation which is best practice. Members have always been able to do this and previous calls for Trustees have gone out to Members for nominations. Such appointments have always been recommended for appointment by the Board for Members to vote on.

Those recommended for the board...will Members be given an opportunity to review their applications to the board and then vote?

Those recommended as trustees by the Board will (and always have been) then be passed to Members to vote. This section has not changed. Applications for Trustees can come either from the Board direct or from Member nominations (as above). The Board then assess all applications and put forward recommended applications to Members who then vote at the AGM to appoint. The recommended applications are included in AGM papers. Members have the right to vote against the Board recommendations. For example the Board may recommend a nomination with a specific skill set that the Board is at that time lacking such as someone with finance skills. However, if Members vote against the recommended nomination then the Board cannot appoint that person. The Board will then have to put out another call for Trustees or put forward new recommendations, again for the Members to vote. No-one can be appointed to the Board without the Members voting (except for co-opts in between AGM's and then at the next AGM they still need to be voted in by Members to continue to be on the Board). The only exception to this rule - if the changes to the constitution are accepted by Members - would be the position of the CEO on the Board, as Members do not vote for this (point 9.2).

Can Members be given the option to review all Trustee nominations as a check for whether the Boards’ perception of gaps is the same as the Members? Does the Board intend in future to put forward ALL suitable applications (even if this is more than the actual spaces that need filling?) before the AGM for Members to consider and then vote on?

There are no proposed changes to the constitution regarding this matter and this is how the Board have always treated trustee nominations as per the original constitution which was approved by Members back in 2004. The Board has been advised this continues to be seen as best practice within the charity sector and is legally sound. However, with the development of the Member Advisory Council (which will be formally launched at the AGM) that this makes a good point for the Council to raise in their first meeting. This can then feed into the newly formed People & Performance Sub-Committee of the Board which has within its remits to review the trustee application and nomination process.  The Board are committed to be as transparent as possible with Members and welcome the Member Advisory Council as a crucial forum for Members to discuss such matters.  However, one issue to consider is confidentiality that would need to be explored further. Currently all applications are received confidentially and treated as such until they are at the recommendation stage by the Board at which point they are then shared with Members (with the nominees consent). Some nominees may not wish their application throughout this process to be shared publicly, especially if they are not recommended by the Board. So this matter would have to be dealt with sensitivity and it maybe that the Board can only share those nominations that they have approval to share. Again we would recommend this could be an item for the Member Advisory Council to discuss at an early meeting and feed into the Board. Any changes in the process of how the Board communicates the nominee process with Members would not need to be included in the constitution. The Board takes Members views seriously and with the introduction of the Member Advisory Council this strengthens this.

I have another question...

Please contact Fiona Goodwin, Company Secretary or telephone 01242 714321