Lynton and Barnstaple - Operations and Development

I was surprised by the categoric assertion which is why I asked. So is it the case that due notice of other resolutions was given to the Secretary before the EGM was called?

 

Try 'making up whatever is in our interest as we go along', @RailWest

 

Define "called". My understanding is that the board had decided to call the EGM for the adoption of the Articles, and that the meeting had closed before the six signatory trustees advanced their request to table the two ordinary motions.

In the interval between then and the formal calling of the EGM, questions were asked about process, where the Company Secretary cited that "legal advice" meant that no further motions could be considered. You may remember participating in previous discussion around this point.

The issue is not the motions themselves*, but the way that the Company Secretary has abused his powers to prevent further motions being tabled within the required notice periods.

* - as an aside, they are themselves invalid under section 303 of the Companies Act, as being vexatious and defamatory; they would also be frivolous if the implications were not so serious, and no responsible company secretary should ever have entertained their submission.

 

Thanks @Lineisclear . The chronology is that the EGM was called on the 10th of February, and 'the six' as ordinary members added their two ordinary resolutions with special notice under AOB at this meeting, but then the Company Secretary refused to add any other resolutions with or without special notice, despite there being more than enough time.

 

That's the point. A meeting is called when the Directors decide to do so or when effective notice is given by the requisite percentage of members. Motions tabled after the meeting has been called but before Notice of the meeting is given to members can be validly rejected. The "more than enough time " Tobbes refers to is the time before the calling of the meeting by the board not the period between then and the date of the meeting itself. The additional motions would be out of time.
As far as the section 168 notice to remove directors goes the directors concerned would have been excluded from voting because they would be conflicted so their non-participation in the decision to respond to the section 168 notice would be necessary.
It still looks to me that the Company Secretary's actions were correct.

 

As you say, there are indeed strong grounds for voting “no”. One might also add that there appear, in the rush to push these measures through, to be errors - so who knows what other mistakes there might be still to come to light? All in all, a bad business.

 

If we ignore the (odious) content of the motions, you are missing the inconsistency.

The motions to remove Ann Belsey and Chris Duffell are presented as a letter by six individuals, signing themselves as Members, requesting presentation of ordinary motions. They are not motions of the Trust, but privately brought.

If the Company Secretary was correct to accept these motions outside of the bounds of a Trustee meeting for consideration at the EGM, he has a duty to all members to consider any motions for that meeting if they are within the legal timeframes. If such other motions could not be brought, then nor should these.

The stated reasons were "legal advice" - we have to follow that line of logic as justification. No one has yet provided any insight into how that might work. I might be persuaded of an argument over logistics, if it had been that the papers had already gone to print - I recognise a requirement for reasonableness. However, as the legal requirement for Notice had been met by online publication, I struggle to see why issue of the papers could not wait for the 4 weeks deadline to have passed to ensure fairness (and allow, if necessary, an urgent Board meeting to consider whether to accept any further resolutions).

All of this is in the context of the Directors' individual duties under Section 172 of the Companies Act, not to mention their general obligations as charity trustees to the reputation of the sector as a whole.

 

If it's important to check skills and suitability of prospective trustees, then why not for current trustees? Why should they be assumed to be suitable and possess the appropriate skills?
It either has to apply to all, or none.

 

Absolutely. As school governor and trustee elsewhere, skills audits are used not just to check what skills we need to recruit, but also to assess whether the current balance is right.

 

I'd be interested in your opinion of @35B's contention that "as an aside, they (the dismissal motions) are themselves invalid under section 303 of the Companies Act, as being vexatious and defamatory; they would also be frivolous if the implications were not so serious, and no responsible company secretary should ever have entertained their submission." I agree with this interpretation and would add that I also consider them as distinctly "defamatory".

{For those without access The Companies Act Section 303 provides that:
(5)A resolution may properly be moved at a meeting unless—

(a)it would, if passed, be ineffective (whether by reason of inconsistency with any enactment or the company's constitution or otherwise),
(b)it is defamatory of any person, or
(c)it is frivolous or vexatious.}

 

One third of the trustees retire at each AGM, so, should they choose to stand again, they will (and previously should have been) be subject to the same vetting procedure. As this will always be the case, and there is a risk of conflicts of interest, should all trustees be prevented from sitting on the nominations panel?

 

Absolutely.
How could the board be (and be seen to be), impartial in judging its fellow members of the board when they vome up for reelection!
This shows how farcical a situation this is and should clearly show to those supporting the 6, how the board would become self perpetuating.

 

I think its a mistaken interpretation. If it was correct it would be virtually impossible to table a motion to remove a director since the conduct complained of would almost inevitably be met with a similar response to 35B’s . The allegations being made are serious and go to the heart of suitability to act as directors. They cannot be defamatory if they are justified.

 

If you have standing trustees due for re-election on rotation then the membership would already know them, what skills they have etc.

Whether those standing trustees need to go through the nomination process is something that would need to be defined later in the M&As specifically, as in theory and strictly by the word "nomination" they wouldn't have to as they haven't been nominated, they are restanding for election by rotation as laid out in the M&As.

 

As I understand it changes to M&As are not enforced retrospectively, therefore any new nomination panel will only be active from the acceptance of the changes forward. What's gone before is irrelevant.

I think there is an unfortunate misunderstanding on vetting. The vetting process of any Trustee is to check that they can legally stand by law. This has to be done without question.

Once that is done then you interview each, looking for skills, suitability etc for the role in mind, PR, engineer, planning etc, and then make recommendations as to who is most suitable. After which they all are entered into the membership voting process to finalise.

 

If you take that interpretation, the membership would be powerless to remove a Trustee if the board collectively were determined that they stayed.

Imagine you have a board with no vacancies. 1/3 are due to stand for reelection. In addition there are one or more new candidates. The nominations committee disqualify the new candidates as “unsuitable”, at which point the election has precisely the right number of (incumbent) candidates for the number of vacancies and they automatically get elected. It’s a cosy little club.

I really can’t see why people are still trying to defend the indefensible when it is so blindingly obvious that the proposal is ripe for abuse. Even were the current board made up of saints, the proposal should still be opposed, because the strength of any constitution is not how it performs when good people are in charge, but how it serves to protect the organisation against the malign.

Tom

 

I agree; if they are true, they can of course be brought. However, they lack the defence of truth, so fall at the first hurdle.

That is before we consider their vexatious nature?

I look at the allegations. Some are grotesquely unfounded (e.g. allegations around GDPR), and amount to misrepresentation. Others are simply absurd - that a director opposed a decision that by the majority of the board's own admission breached Charity rules by a country mile.

The overall impression is "I don't like these people because they don't think like me so the answer is to eject them". No persuasion, no engagement - just a refusal of one director to work with a fellow trustee, and she is the one to be expelled.

That brings me back to the primary duty of the chair, which is to craft and lead an effective board. I see no evidence at all of this, or of any attempt to deal with the rough edges that may exist.

 

Here, you've picked up on the other important point. If in the case of the L & B Trust we only have a Treasurer/book-keeper and the Accountancy firm prepares the annual accounts for audit in February or March for the previous year, what sort of financial management information (compared with a budget ?) is the Board getting for any of it's meetings (apart from the one in April when the Accountants produce the draft accounts for the previous calendar year) ? Are there management accounts ? Maybe a Board member can enlighten us. Which is why I would support finding a Treasurer who can do more than run a cash book, which the evidence suggests is what we have at the moment.

 

So it would be one rule for existing (potentially unskilled and unsuitable) trustees, and a different rule for new trustees (who would be vetted by the potentially unsuitable ones!).

It's a mockery to say that this is to ensure the board has a range of suitably qualified people when certain board members would never have their suitability (independently) checked.

As for defining processes later in the M&As, that would simply confirm 2 things:
1. That the current proposal has not been fully thought out and is a rush job.
2. That the board/6 doesn't care about having to spend another £3,000 of trust funds to call another meeting to add the additional M&A requirements.