Between AGMs, circumstances may arise where a vacancy occurs on the board of an RSL, or where it considers that additional skills, experience or representation would be beneficial. The SFHA Model Rules 2020 (“Rules”) provide mechanisms which allow individuals to be appointed to a board between AGMs, ensuring that the board can continue to operate effectively and maintain an appropriate balance of expertise. The Rules provide for the following two types of appointment:
- Casual vacancies
- Co-optees
Both involve the appointment of an individual between AGMs without election and whose appointment will end at the following AGM. However, each appointment serves different purposes and exists for different reasons. To better understand the composition of your board, it is important to know the key difference between the appointments.
Casual vacancies
A casual vacancy arises when an elected board member leaves the organisation before the next AGM. This can happen for any number of reasons such as; resignation, death, disqualification, or ineligibility. Appointing a casual member helps for continuity of the operation of the RSL.
Key things to know about casual vacancies:
- Appointees must be an existing member of the RSL.
- A member will not be eligible to sit on the board unless the eligibility criteria contained in Rule 43 of the Rules has been satisfied.
- NB: It is possible for an individual to become a member of the RSL and for the board to subsequently appoint that individual to the vacancy.
- Casual vacancies effectively step into the shoes of a departed elected member and inherit full voting and participation rights.
- No limit on the number of casual vacancies which can arise.
- Casual vacancies must stand down at the following AGM at which point they would have the opportunity to stand for election.
Co-optees
Co-option involves the appointment of an individual to a board, usually for the purposes of bringing in specific skills or experience (e.g. finance, IT, development) to assist in the operation of the RSL.
Key things to know about co-option:
- The Board can appoint any individual (irrespective of membership with the RSL).
- The eligibility criteria contained in Rule 43 of the Rules also applies to co-optees as it does to elected members.
- Co-optees may take part in discussions at meetings (including sub-committee meetings) and vote on all matters except for those directly affecting:
- the RSL’s Rules;
- the membership of the RSL; or
- the election of Board members.
- Co-optees must not make up more than one-third of the total number of the board at any one time.
- The presence of co-optees will not count when establishing the minimum number of members present to allow a meeting to take place.
- Co-optees must always stand down at the next AGM but can be re-co-opted.
- However, continual co-option is discouraged. Where a co-optee has skills that are required on a continuous basis, they should be elected as a full member.
While both mechanisms allow individuals to join the board, they have distinct functions. A clear understanding of the distinction can help the board ensure they are adopting the correct approach.
If you feel this may be something that you wish to discuss further, please contact our governance and compliance team for additional information.
Written by Milly McGregor
