APAL Constitution & ReviewBoard information
Click here to view APAL’s Constitution and learn more about the 2021 Review of the Constitution.
Review of APAL Constitution – 2021
APAL commenced a review in response to feedback and requests from Members at the 2019 and 2020 APAL Annual General Meetings.
Click the image to download further information about the review or you can read the same content below.
You can review the proposed changed in the marked up version of the constitution here.
The Notice of Meeting containing the Explanatory Memorandum in relation to the constitutional changes, along with the Resolutions to be voted upon have been mailed to members. Any members who have not received their meeting notice should contact the APAL office.
The Constitutional review arose from requests from members at the last two AGMs.
Main amendments are;
- Limit the length of director terms to align with best practice and to allow greater renewal of voices having a say in the industry
- Broaden the group of people eligible to be directors of APAL representing the states – not just the small group of class A members in the state but those who are past or future members, or other people in the business including siblings/children of the nominated member, or key long term employees from within the industry. Finding new directors is becoming increasingly difficult as the industry consolidates, particularly in states with fewer growers.
- Providing for greater representation of pears throughout the board – having all directors responsible for the representation of the Pear industry, not just one director.
- Allowing for an additional independent director to bring external experience to help the team further grow the Pink Lady® commercial business. This is critical to ensuring future funding for industry programs as Hort winds back it’s allocation of levies to APAL
- Other administrative changes to tidy up and simplify processes and ensure the wording is more in line with the expectations of the Australian Charities and NFP Commission.
Why is APAL reviewing its Constitution?
APAL commenced a review in response to feedback and requests from Members at the 2019 and 2020 APAL Annual General Meetings.
Member feedback included
- Concerns re Director succession and unlimited ongoing terms
- Disappointing lack of interest from Industry to refresh these positions – particularly in states with fewer members
- Ensuring the best person for the role is secured
- Query whether state-based Director representation was the best structure to attract the right people
What were the principles guiding the review?
The review was undertaken with four key guiding principles. All changes were considered with these principles in mind;
- Responding to requests from Members at the AGM ensuring the constitution reflects Members expectations
- Administrative efficiency and instituting best practice governance arrangements – including trying to simplify processes and reduce the length and complexity of the constitution.
- Strengthening (or not weakening) Not-For-Profit and Tax Exempt status of APAL
- Ensuring constitution is current and reflective of APAL’s operations and strategy now and future including the expansion of the Pink Lady® business as a funding source for industry services.
1. Broadening Board Eligibility
- Currently to be a Director, you must be a Class A Member of APAL (levy payer).
- Change proposed allows for Directors representing the State to show evidence of their significant involvement in the industry in that state without having to be a levy payer.
- Allows for a broader potential pool of eligible candidates without diminishing the representative nature of the position.
- E.g. Family orchard where the first generation is the nominated Class A member representative, but the younger generation wishes to get involved in the industry through APAL directorship
- All nominations would need to be endorsed by two other Class A members
- The Constitution retains the requirement for the final say on any director appointment to be with the members who can nominate and vote for an alternative candidate.
Q – I am a second generation orchardist. My family business is a levy payer and Class A member of APAL. My father is currently the nominated representative of our APAL membership. Can I nominate to become a director of APAL?
A – Under the current constitution you cannot, but under the proposed amendment you will be able to nominate to be an APAL director if two Class A members support you.
Q – What if a person who nominates to be a Director is not a grower?
A – The nominee would need to evidence significant involvement in the industry and support their application with the endorsement of two Class A members. This nomination would then be considered by the Director Selection Committee along with any other nominations and a preferred candidate will be selected based on the skills and experience of the candidate, and the value that can be provided to APAL. If the nominee is not supported by Class A members in the state, the members can nominate an alternative candidate to be voted on at the AGM.
Q – Why is this change being proposed?
A – Over the years as APAL director positions rotate in each of the states, it can be very difficult to attract significant interest in members applying for these roles. Feedback suggests that many growers are busy building their own businesses and dealing with ongoing issues as they arise in the Industry. Grower numbers have reduced over time and so too has the pool from which APAL can draw talent and enthusiasm to continue to assist us in building the industry. This change aims solely to increase the potential pool from which we can seek Directors whilst still ensuring they are across local issues for growers and the industry.
2. Enhancing Board Composition
- Increasing the responsibility of all Directors to represent both apples and pears
- Removing the requirement for a single Director to represent the pear industry interest
- Increasing the number of Additional Directors from two to three
- Allows additional skills and experience to benefit particularly the Pink Lady® commercial operations
- As a transitional provision the Pears Director would be appointed as an Additional Director for the remainder of his current 3 year term.
Q – Won’t removing the Director representing the Pear Industry reduce the voice of pear growers on the APAL Board?
A – No. It is a well accepted director duty that ALL directors must have responsibility to represent the interests of all members, not just the particular product or region that they have been elected by. The proposed change will make this shared responsibility more clear at Board level.
Q – Is the current Director representing Pears supportive of this change?
A – Yes. Chris Fairless is the current Director representing Pears and believes this to be a positive change for both APAL and the pear industry.
Q – Why is another non-grower Director being proposed and won’t that dilute the representation of growers on the APAL Board?
A – The APAL Board after the change will still be grower dominated with 6 of the 9 proposed positions being growers and industry stakeholders. The development of the Pink Lady® business globally is becoming increasingly critical to APAL’s ability to deliver services to industry. APAL is one of the few fortunate peak industry bodies which has the ability to derive funding from sources other than Hort Innovation. Growing the income from the Pink Lady® business allows APAL to reduce the risk of reduced funding that might arise from changes in the strategy and agenda at Hort Innovation over the years. For example, as Hort Innovation indicated it was unable to continue funding of the Future Orchards® program, APAL has been able to step in and continue funding of this critical industry service from it’s own income and reserves.
Q – What sort of people and skills is APAL needing to bring to the Board in the form of an additional non-grower director
A – Examples of skills and experience that would really assist APAL in continuing to grow the Pink Lady® business and brand globally include global brand, marketing and promotion, international trade, experience with building businesses in different jurisdictions with different civil, social and cultural situations, cross border taxation treaties, trademark, copyright and patent law and trademark defence.
3. Limiting Director Tenure
- Removing the current age based limit on tenure (72 years of age) which has been repealed from the Corporations Act
- Replacing this with a maximum Director tenure for all Directors of 12 years.
- Allows for the Board to benefit from new skills and talent on a rotational basis
- ASX and AICD guidelines recommend 9 years to maintain independence of the Board
- 12 year term strikes a balance between valuing experience and ensuring directors continue to be independent and bring external perspectives to decision making.
- Any Director impacted by this change would be able to see out their current 3 year term.
Q – Wouldn’t the experience and value of directors only grow the longer they are involved with APAL?
A – Yes there is certainly a benefit to be gained as directors gain greater knowledge of the APAL operations and can better advise on matters of strategy and governance with a broader understanding. However the cost can start to outweigh the benefits at a point when the individual has had the opportunity to share their experience, and the ability to bring new ideas and new thinking diminishes. The guidance from the Australian Institute of Company Directors is that this benefit is maximised over a 9 year period.
Q – Why has APAL recommended a term of 12 years if the Australian Institute of Company Directors and ASX guidelines recommend a maximum term of 9 years?
A – APAL accepts the 9 year guidance from AICD and ASX but is proposing a 12 year period as the ability to rotate/replace directors is more difficult for APAL when the pool of available directors is smaller (currently limited to members). Finding willing nominees for these positions can be an issue particularly in the smaller states which have fewer members. Even in the larger states, it can be intimidating for new and younger members to put themselves forward for a position where the incumbent has been in the role for a very long time.
Q – Why is APAL recommending removing the current term limit of reaching the age of 72?
A – Back when the APAL constitution was first written, this term limit was the standard set in the Corporations Act. As time has evolved, it is well understood that age is not the best proxy for an individual’s ability to provide benefit to an organisation. The Corporations Act has since removed this condition.
4. Charity and NFP/ Tax Exempt status and Administrative changes
- Amendments to the objects and other clauses regarding payments to Directors and Members to bring the wording in line with Australian Charities and Not-For-Profits Commission expectations
- Tidy up of procedural and administrative requirements to allow for more efficient operation
- Amending the definition of ‘Levy Payer’ clarifies the well understood principle that the Class A members of APAL should be the growers.
- Amendments to reflect technological advances and changes to outmoded practices in procedures of the Board and at meetings.
- Removing references to facsimile communications as our members no longer use fax but prefer email or phone.
- Allowing circular resolutions of the Board to be approved electronically rather than having to physically sign
- Clarifying that a Director or Member is present at a Board meeting or Members meeting regardless of whether they are in attendance physically or via video conference or telephone.
- Clarifying arrangements for delivery of information to members electronically
- Changes to remove provisions which were adding to the length and complexity of the constitution but not providing benefit to existing members.
- Reference to meetings of levy payers has been removed as this is a separate process relating to all entities paying levies on apples and pears across Australia – not just those that are APAL members. The constitution is about the governance of APAL by its members therefore not applicable to Levy meetings.
- Removing historical references to, and distinctions between, ‘Initial Members’ and ‘Further Members’ and ‘Initial Class A Members’ and ‘Initial Class B Members’.
- Whilst the original MOU between the B Class members and APAL is still on foot, it has been removed as an attachment to reduce duplication and length of the document without changing the original intention.
Q – What are examples of changes being made in relation to the Charity and NFP status
A – The objects of the company are being updated to better reflect what APAL does as this had changed somewhat since the organisation was first formed in 2002. At the same time we have taken the opportunity to review these objects and activities to ensure they are still compliant with APAL’s original application to the Australian Charities and Not-For-Profit Commission.
Q – Why is APAL proposing to change the definition of a Levy Payer?
A – The previous definition of Levy Payer was not clear that the Class A member with the ability to vote on APAL matters and stand as an APAL director must be the grower of the apples or pears. It is important to make this clear as it had never been intended that the Class A member could be the marketing organisation who pays the levies on behalf of the grower.
Q – What sort of changes are being recommended regarding the use of technology?
A – Given the significant developments in online meeting technology, and the ability of members and directors to access and utilise these technologies, APAL considers it of great benefit to the organisation to be able to connect with directors and members remotely from time to time. This is important not only in current times where COVID has restricted people’s movements around the country and the state, but even in post COVID times when it may be of benefit for our members to attend our AGM via an online meeting, or lodge a vote online before the meeting, rather than having to fly to Melbourne to attend in person or to nominate a proxy to represent them. There is currently legislation with the Parliament to allow some of these technologies to be used in AGMs and if passed, the changes we are proposing to the constitution would allow us to adopt some of these if appropriate.
|Members receive the AGM notice of meeting including the resolutions and detail of the proposed changes.
Pack will include details for logging on to the AGM and for voting in advance of the AGM if you are unable to attend.
15-19 October 2021
|Online voting opens for members to submit their votes in relation to the resolutions||
15 October 2021
|APAL Annual General Meeting (online)||
10 November 2021
The Constitution sets out the manner in which the Members of the Company have agreed to conduct the internal administration of the Company.