The Importance of Updating Your Constitution

One of the best pieces of advice I can give club directors is to read and familiarise yourself with the constitution. If not all, then the important day-to-day practical and operational sections like membership categories and membership rights, disciplinary provisions, board composition, board election processes, board proceedings and general meetings.

From a risk-management perspective, some of the most useful and practical advice I can give to directors and to clubs is to firstly identify the correct version of the constitution and secondly have the constitution reviewed regularly.

Although it may sound obvious, it is crucial for a club to be able to establish exactly what the club’s current constitution is in order to know what rules apply and, if necessary, what has to be changed.

In our experience, there have been a number of occasions where clubs are working off a constitution which may have been either replaced or at least amended over the years, and those amendments have not found their way into the copy of the constitution provided by the club.

A club should have its constitution regularly reviewed — at least on an annual basis. This is very important in order to see if any changes need to be made to reflect changes in the law, changes to reflect better corporate practice and sometimes changes which have come about through addressing issues which have been faced by other clubs.  

Naturally, you should have a qualified lawyer review the club’s constitution. We provide this service and have done so for clubs for over 80 years.  

This is particularly important because we have seen many DIY jobs go wrong because, for example, the wording of the amendment does not reflect what the club actually wanted, or the club failed to understand the interrelationship of various rules leading to inconsistencies which need to be addressed.

When the constitution is out of date, it can result in members believing they have rights that they do not in fact have and/or the club following an outdated legal requirement. For example, some constitutions require a club to give 14 days’ notice of an AGM (where the Corporations Act now requires 21 days’ notice). If a club gave the 14 days’ notice of the AGM which contained notice of a special resolution, the special resolution would not be legally effective, even if passed by members, and this could go undetected for years, causing great confusion down the track.  

Best to avoid this risk by having the constitution reviewed regularly. 

If you would like our advice on your club’s constitution, please email me.