11 October 2024
Proposal to amend the Constitution of the Royal New Zealand Foundation of the Blind Incorporated (RNZFB)
At its March 2024 meeting, the RNZFB Board decided to ask Members to consider a number of proposed changes to the RNZFB Constitution and remuneration of directors. The changes being proposed relate to:
- a simplified approach to directors remuneration;
- a diversity clause;
- dispute management; and
- various administrative matters.
Each of the proposed changes has been reviewed by solicitors Bell Gully. This letter includes:
- the proposed changes that Members will be asked to vote on;
- an explanation for the proposed changes; and
- an outline of the process we are following.
We realise there is a lot of material to understand. If you have any questions, please do not hesitate to contact the Board Secretary boardsecretary@blindlowvision.org.nz or by phoning the National Contact Centre on 0800 243333.
If you wish to receive a copy of the current Constitution in your preferred format, or the tracked changes to the revised Constitution in Microsoft Word, please contact the National Contact Centre on 0800 243333. The current Constitution is available for download from the Governance section of the Blind Low Vision New Zealand website. Alternatively, you can access the Constitution on the Telephone Information Service by selecting menu option 3, 1, 5, 1 and the proposed amendments on menu 3, 1, 5, 4.
All rule number references in this notice are to the amended Constitution, except for rules that are proposed to be removed.
The Proposal
Members will be asked to consider and vote on the following four resolutions:
Resolution 1: Remuneration of Directors
THAT rule 8.10 of the Constitution of the Royal New Zealand Foundation of the Blind Incorporated, as amended, be adopted to take effect after the 2024 RNZFB Annual General Meeting has concluded.
Resolution 2: Diversity Clause to the Composition of Board
THAT rule 7.1 of the Constitution of the Royal New Zealand Foundation of the Blind Incorporated, as amended, be adopted to take effect after the 2024 RNZFB Annual General Meeting has concluded.
Resolution 3: Handling Disputes
THAT rule 13.0 of the Constitution of the Royal New Zealand Foundation of the Blind Incorporated, as amended, be adopted to take effect after the 2024 RNZFB Annual General Meeting has concluded.
Resolution 4: Various Administrative Matters
THAT various other amendments to the Constitution of the Royal New Zealand Foundation of the Blind Incorporated, as amended, as detailed in this notice, be adopted to take effect after the 2024 RNZFB Annual General Meeting has concluded.
Explanation for the Proposed Changes
Resolution 1: Remuneration of Directors
It is proposed that rule 8.10 is amended as follows:
8.10 Remuneration of Directors
8.10.1 Where resolved by the Board in accordance with this Constitution, the Foundation may pay reasonable remuneration to any Director in return for services rendered to the Foundation provided that any such amount paid shall be reasonable and equivalent to that which would be paid in comparable circumstances.
8.10.2 The Board will every five years, and at any other time it considers appropriate, commission a report from an independent external advisor appointed by the Foundation giving the opinion of the independent external advisor as to whether, the then-current remuneration of Directors is reasonable and equivalent to that which would be paid in comparable circumstances.
Rationale
Remuneration of Board Directors was last reviewed ten years ago in 2014, and with this in mind the auditor has written to the Board indicating that an independent third party should be asked to carry out an analysis and review of Director’s remuneration. Accordingly, Strategic Pay was asked to provide their analysis based on their widespread survey carried out in the not-for-profit sector.
Right now the process for approving remuneration of directors involves a postal ballot of members. Printing and postage costs have risen to such an extent that it now costs more than $30,000 to conduct a postal ballot of members. If the RNZFB is to keep pace with the not for profit sector, it is important that remuneration of directors is reviewed at least annually, but to do this each time by postal ballot becomes prohibitively expensive. Therefore, rather than formally asking members this year and in future years to approve changes to remuneration to directors, the Board asks members to adopt a simpler approach to setting remuneration of directors.
Over time, members have agreed that remuneration should be paid to directors of the RNZFB in line with the not for profit sector. Our Constitutional law firm, Bell Gully, has developed a simpler approach to remuneration of directors which builds on that principle and is in line with the new Incorporated Societies Act 2022. It gives formal responsibility to the Board for setting remuneration, based on regular external independent assessments of pay throughout the not for profit sector by an experienced entity such as Strategic Pay. In other words, under this proposal, the Board must always be able to satisfy itself, and can be held accountable to show, that the remuneration paid to directors is reasonable in the circumstances. The Board can and should obtain regular independent assessments of remuneration of directors, but there is a requirement that this be done at least every five years. Therefore under this proposal, there are sufficient safeguards to ensure that the RNZFB will, over time, continue to pay remuneration to directors that is in line with the not for profit sector.
We provide the following information to explain what would happen if this proposal is adopted. Directors currently receive remuneration of $7,000 per annum, with the Chair receiving $21,000 per annum. Those figures have remained unchanged for ten years. Strategic Pay has concluded that in keeping with changes in the market but in particular the not for profit sector, directors of the RNZFB should receive increased remuneration for the work they do. The recommended remuneration is $9,700 for directors.
The position of Deputy Chair did not exist when remuneration of directors was last set. This position was introduced into the Constitution approved by members in November 2017. Unfortunately, it appears there was an oversight at that time which means there is currently no provision for the Deputy Chair to be remunerated for the additional duties and responsibilities that come with that role. Strategic Pay recommend that to keep pace with the not for profit sector, and in recognition of the increased responsibilities and additional duties of Deputy Chair, the remuneration for that position should be 20% more than for directors. This leads to remuneration of $11,640.
Remuneration for the Chair is currently set at $21,000. Strategic Pay has recommended there be no change to this remuneration.
Therefore if the above proposal is adopted, it would be open to the Board to set remuneration of directors as recommended by Strategic Pay, including increased remuneration for the Deputy Chair. In future years it would be open to the Board to adjust the remuneration of directors in line with information available at the time, such as the consumer price index, but after a maximum of five years the Board will be required to obtain another external assessment to independently ensure remuneration is set appropriately in line with remuneration in the not for profit sector.
We are attaching for your information a summary of the report by Strategic Pay that leads to the above figures. This summary was prepared by Strategic Pay for sharing with members.
Resolution 2: Board Diversity
It is proposed that rule 7.1 is amended as follows:
7.1 Composition of Board
7.1.4 The composition of the Board will recognise the value of diversity, including (without limitation) age, gender, ethnicity, sexual orientation, disability and religion.
Rationale
The Board has emphasised the importance of inclusivity and the need for expertise in Te Tiriti o Waitangi and diversity issues, and to develop a process that resonates with stakeholders.
The Board is addressing specific concerns raised by Consumer organisations, including perceptions of lacking diversity and insufficient recognition of Te Tiriti o Waitangi in the constitution. These issues involve considerations such as co-governance and ensuring disabled people can participate in decisions that affect them. These matters will be fully explored in the next external independent review of the Constitution. This will be conducted in the near future and planning is already under way.
Resolution 3: Dispute Management
It is proposed that rule 13.0 is amended as follows:
13.0 Dispute Management
13.1 Consideration of a Dispute
13.1.1 For the purposes of this rule 13:
13.1.1.1 “Dispute” means a dispute or allegation made by a Member of:
(a) misconduct by a Member or a group of Members in relation to their dealings with, or actions in relation to the Foundation; or
(b) damage to the rights or interests of a Member as a Member or damage to the rights or interests of Members generally; or
(c) damage to the rights or interests of a Client as a Client, or damage to the rights or interests of Clients generally;
13.1.1.3 “Disputes Panel” means the panel formed for the purpose of resolving, investigating and determining Disputes; and
13.1.1.3 “Relevant Body” means, where a Dispute relates to:
(a) a governance or constitutional matter, the Board; and
(b) any other matter, the Disputes Panel.
13.1.2 A Member or client may make a complaint by giving to the Disputes Panel a notice in writing that:
13.1.2.1 states that the Member or client is starting a procedure for resolving a Dispute in accordance with this Rule 13;
13.1.2.2 sets out the allegation(s) to which the Dispute relates and whom the allegation or allegations is or are against; and
13.1.2.3 sets out any other information or allegations reasonably required by the Foundation.
13.1.3 The Foundation may make a complaint involving an allegation against a Member or client by giving to that person a notice in writing that:
13.1.3.1 states that the Foundation is starting a procedure for resolving a Dispute in accordance with this Rule 13; and
13.1.3.2 sets out the allegation(s) to which the Dispute relates.
13.1.4 The information setting out the allegations must be sufficiently detailed to ensure that a person against whom an allegation or allegations is made is fairly advised of the allegation or allegations concerning them, with sufficient details given to enable that person to prepare a response.
13.1.5 The Disputes Panel must, as soon as is reasonably practicable after receiving a complaint, consider the nature of the Dispute and direct the Dispute to the appropriate Relevant Body.
13.1.6 The Relevant Body must, as soon as reasonably practicable after receiving a Dispute, advise what, if any, steps should be taken to resolve, investigate or determine the Dispute.
13.1.7 Disputes must be dealt with by the Relevant Body in an independent, fair, efficient, and effective manner. For these purposes, the Relevant Body must:
13.1.7.1 seek to facilitate constructive communication and discussion between the parties and the Relevant Body in respect of the Dispute; and
13.1.7.2 use reasonable endeavours to resolve the Dispute by mutual agreement between the parties within 20 working days of receiving the Dispute.
13.1.8 Where a Dispute relates to the act or omission of a Director, that Director may not act in their capacity as a Director in relation to the Dispute and must excuse themselves from all Relevant Body matters relating to that Dispute.
13.2 Grounds for deciding not to progress Dispute
13.2.1 Where the Dispute has not been resolved in accordance with Sub-Rule 13.1, the Relevant Body may decide not to proceed with a matter further if:
13.2.1.1 the matter is:
(a) operational in nature and is being handled by the Chief Executive; or
(b) considered by the Relevant Body, acting reasonably, to be trivial or insignificant; or
13.2.1.2 the matter has not adequately disclosed, and the process set out in Sub-Rule 13.1 has not been able to ascertain or establish:
13.2.1.2.1 in the case of alleged misconduct under Sub-Rule 13.1.1.1(a), any material misconduct by a Member that would warrant further investigation of that Dispute; or
13.2.1.2.2 in the case of alleged damage to rights or interests under Sub-Rule 13.1.1.1(b) or 13.1.1.1(c), any material damage to those rights or interests that would warrant further investigation of that Dispute; or
13.2.1.3 the Dispute appears to be without foundation or there is no apparent evidence to support it; or
13.2.1.4 the party bringing the Dispute has an insignificant interest in the matter; or
13.2.1.5 the conduct, incident, event, or issue has already been investigated and dealt with by, or on behalf of, the Foundation.
13.3 The Relevant Body may refer Dispute to other investigator
13.3.1 Where the Dispute has not been resolved in accordance with Sub-Rule 13.1, the Relevant Body may in order to determine what, if any, steps should be taken to resolve, investigate or determine the Dispute, refer it to any of:
13.3.1.1 an agreed external person or persons to investigate and report back to the Relevant Body on the matter; or
13.3.1.2 an arbitral tribunal in accordance with the Arbitration Act 1996, or an agreed external person or persons to investigate and make a decision, (each a “Decision Maker”), where the Relevant Body (acting reasonably but in its sole discretion) considers it necessary or appropriate to do so, and on such terms and conditions as the Relevant Body may decide (acting reasonably).
13.3.2 Any terms and conditions imposed by the Relevant Body for the determination of the matter in accordance with Sub-Rule 13.3.1.2 must not be inconsistent with the procedural requirements of the Arbitration Act 1996.
13.3.3 The Foundation and the parties agree that Sub-Rule 13.3.1.2 constitutes an arbitration agreement that is binding for the purposes of the Arbitration Act 1996 to the extent the Dispute is referred by the Relevant Body to an arbitral tribunal.
13.4 Decision Maker
13.4.1 A Decision Maker must be impartial.
13.4.2 A person may not act as a Decision Maker in relation to a Dispute if two or more Members of the Relevant Body consider that there are reasonable grounds to believe that the person may not be:
13.4.2.1 impartial; or
13.4.2.2 able to consider the matter without a predetermined view.
13.5 Disputes—Right to be heard
13.5.1 If the Relevant Body considers a Dispute (in accordance with Sub-Rule 13.1), the parties to the Dispute have a right to be heard before the Dispute is resolved or any outcome is determined.
13.5.2 Without limiting the manner in which a party may be given a right to be heard, a party must be taken to have been given the right if:
13.5.2.1 the decision-making process has been clearly explained to all parties; and
13.5.2.2 a party who is the subject of any allegations is fairly advised of all allegations concerning the party, with sufficient details and time given to prepare a response; and
13.5.2.3 each party has a reasonable opportunity to respond to further points that may arise from the decision-making process before the final decision is made, either in writing or at an oral hearing (if one is held).
13.5.3 An oral hearing can be held if the Decision Maker considers (acting reasonably) that an oral hearing is needed to ensure an adequate understanding of the Dispute, the responses from a party to the Dispute or any other relevant points before the final decision is made.
Rationale
The proposed new clause is very similar to what is already in the Constitution. The proposal we are asking you to approve creates two processes, one for operational complaints and one for constitutional and governance complaints.
Any Complaints involving governance or the Constitution would still be directed in the first instance to the Board. Of course if the Board itself is the subject of a complaint, there is already provision for the complaint to be referred to an agreed external decision maker. Also there is already a provision that any director who is the subject of a complaint cannot be part of the decision making process.
The Chief Executive is delegated full responsibility for the operations of the organisation. If any complaints should arise against the Chief Executive, the Board believes it is appropriate for these complaints to be handled in the first instance by an operational disputes panel. This would allow the organisation at the operational level to learn from any mistakes that might be made, without these becoming the subject of Board review.
If someone makes a complaint about the Chief Executive, and if that person is not satisfied with the outcome or the way it was handled by the disputes panel, that person can still complain to the Board. This is already a feature of the Board’s complaints policy. The complaints policy will need to be reviewed if this proposed amendment to the Constitution is approved, but the Board will ensure the ultimate right of appeal to the Board is retained.
Resolution 4: Various Administrative Matters
It is proposed that various other amendments are adopted as detailed below.
Rationale
There are numerous other minor changes being proposed which are not material in nature but which are still needed. We won’t list these in detail, but as we said in the introduction, you can always ask to receive the full copy of the proposed new Constitution in your preferred accessible format. A summary of the proposed changes is given below:
- All pronouns such as he, she, his, her have been changed where appropriate to they, them, their, etc.
- The word “facsimile” has been removed from clauses 8.7.1 and 11.7.2.
- The following clauses have been amended to comply with the incorporated societies act 2022: 1.1, 2.1.28, 3.8, 4.0 (preliminary text), 5.1.1, 5.3.2, 5.5.1, 6.2.3, 6.3.2, 6.10.2, 7.2.1, 7.3.2.2, 9.1.1, 9.5.2.1.
- Clause 2.2.15: the phrase financial statements will be defined to refer to statements of position and performance instead of balance sheet and income and expenditure account.
- Clause 2.1.35: The address of the registered office has been updated.
- Clause 2.1.38: The definition of a working day has been simplified.
- Clause 5.5.5: Added to this clause is that the register of members must be updated promptly when the organisation is notified of a member’s change of contact details.
- Clause 6.1: Added to this clause is the Board cannot have fewer than three directors.
- Clause 6.7.1: This clause will require the Board to also have regard to the organisation’s objects in addition to the organisation’s governance, operations and processes, when updating the Board’s policies.
- Clause 6.10.1: This clause already requires the Board to have a conflicts of interest policy. The updated clause will require the Board to maintain a register of disclosures of interests of directors. This is already current practice.
- New clause 6.14: There will be a requirement for the Board to review governance procedures at least every three years as required by the Charities Act 2005.
- Clause 9.2.2.4: There will be a requirement that the business of the Annual General Meeting include disclosures of directors conflicts of interest as part of full consideration of the annual report.
- Clause 9.5.3: A postal ballot will no longer be required but a special meeting of Members will still be required to approve a change to the constitution.
The Process
Here we briefly describe the process we are following, as described in the Constitution:
The Board prepared a written notice containing the proposed resolutions, an explanation of the resolution and all relevant materials and which the Board, in its opinion, deemed reasonable to be included in that written notice.
On 2 August 2024 the proposed materials were circulated via the normal channels of mass-communication for a 30 working day discussion period during which time a counter-proposal could have been lodged.
No counter-proposal was received within the 30 day discussion period which finished on Thursday 12 September 2024.
The Board has now sent these proposal materials to you and other members, along with the notice of the required Special Meeting of Members. This was sent on 11 October, which meets the requirement of 20 working days.
A postal ballot is now open and you are now invited to cast your vote on the proposed resolutions. We have enclosed further information on this that is relevant to how we understand you have chosen to vote. The postal ballot closes on 8 November.
We encourage you to talk to other members about these proposed changes so you can cast a fully informed vote. For example, you might reach out to others you know, contact your local community committee, or contact any of the blindness consumer organisations you know to see if there are any meetings you could attend. Some of these organisations have email discussion lists, social media pages and telephone discussion groups that might also be useful. Please call our Contact Centre on 0800 243-333 if you need further information.
Only those who are registered as Members of the RNZFB are entitled to vote.
A special meeting of Members will be held on 16 November, prior to the Annual General Meeting. This is the final opportunity to discuss the proposed amendments. Members who have not already voted will be able to vote at this meeting. The result of the voting will be announced at the meeting or as soon as possible after the meeting. A two thirds majority is required to approve changes to the constitution.