Club Code of Practice and Best Practice Guidelines

For more information about the Club Code of Practice and Best Practice Guidelines, contact:

The Code Administrator at ClubsNSW on 9268 3000 or

by email [email protected]

TABLE OF CONTENTS

CLUB CODE OF PRACTICE PART A: INTRODUCTION AND APPLICATION 2 What is the Club Code? Why is the Code Necessary? Objectives of the Code Scope of the Code Conflict with Legislation Best Practice Guidelines Citation Definitions

PART B: CODE COMMITMENTS

4 Legal Obligations Club Constitutions Conduct of Directors, Management and Staff Commitment to the Communities in which Clubs are Located Contracts with Key Executives Human Resource Management and Industrial Relations Procurement of Goods and Services and Capital Works Responsible Provision of Gambling Responsible Service of Alcohol Financial Management and Reporting Privacy and Confidentiality

PART C: MONITORING AND ADMINISTRATION

9

PART D: CODE ENFORCEMENT - RESPONSIBILITY, REVIEWS AND SANCTIONS 10 Responsibility of Clubs to Co-Operate with the Code Authority Dealing with Alleged Breaches

Sanctions that may be Imposed by the Code Authority Reporting Review of Sanctions Failure to Comply Naming and Enforcement of Sanctions APPENDICES 13

BEST PRACTICE GUIDELINES 14 MAJOR CAPITAL WORKS 15 PROCUREMENT OF GOODS AND SERVICES 24

BENCHMARKING CLUB PERFORMANCE 29 REMUNERATION OF CLUB EXECUTIVES 34 OVERSEAS TRAVEL 38 BOARD OPERATION 43 Appendix 1: Model Board Charter 48 Appendix 2: Model Board Agenda 49 FINANCIAL REPORTING 54 COMMUNITY SUPPORT 57 COMPLAINTS HANDLING 65 CONDUCTING DISCIPLINARY PROCEEDINGS 67 CONDUCT OF BOARD ELECTIONS 72

© ClubsNSW, September 2014 | 1

CLUB CODE OF PRACTICE

PART A

INTRODUCTION AND APPLICATION


WHAT IS THE CLUB CODE? 1. A statement of common standards of

conduct for all Clubs that are members of ClubsNSW.

2. An expression of the Club Industry’s

underlying values of honesty, fairness, integrity, compassion and community.

3. A single, plain-English point of

reference for the duty of care and due-diligence expectations of Club communities served.

WHY IS THE CODE NECESSARY? 4. The governance demands upon Clubs

continue to grow and become more complex. The conduct of Club Directors and managers is closely scrutinised by Club members, regulators, policy makers, trade unions and the media. By adhering to the Code, Clubs can have greater confidence that they are meeting their responsibilities to all stakeholders.

5. Club Directors, management and staff

are custodians of significant member assets and have an obligation to ensure that the administration and management of the Club is conducted with efficiency, fairness and integrity. In particular, the service of food and alcohol, and provision of gambling and other entertainment facilities demand high standards of responsible governance and administration. The Code reminds all those in leadership positions of their obligations and provides a framework for effective Club performance.

OBJECTIVES OF THE CODE 7. To promote consistently high

standards of practice across the Club Industry;

8. To bolster pride and confidence amongst Club Directors, managers, employees, members, suppliers and volunteers;

9. To increase community trust in the

effectiveness, accountability and transparency of Club administration; and

10. To guide and support Clubs in fulfilling

their mission and their obligations to all stakeholders.

SCOPE OF THE CODE 11. This Code of Practice sets standards of

conduct for Clubs who are members of ClubsNSW.

12. An alleged breach of the Code by a

Club that is a member of ClubsNSW will be dealt with in accordance with Part D of the Code.

CONFLICT WITH LEGISLATION 13. Where there is any conflict or

inconsistency between the Code and any Commonwealth or State legislation or regulation, that legislation or regulation will prevail to the extent of the conflict or inconsistency.

INTRODUCTION AND APPLICATION


BEST PRACTICE GUIDELINES 14. ClubsNSW periodically issues Best

Practice Guidelines for key areas of Club operation. By following them, Clubs can minimise their risk of breaching the Code, or government regulations. (See Appendix 2 for a list of Best Practice Guidelines).

CITATION 15. This Code may be cited as the Club

Code of Practice.

DEFINITIONS 16. In this Code, unless the context

requires otherwise:

‘Affiliates’ means affiliated Associations including: Bowls NSW; Golf NSW; RSL & Services Club Association; Leagues Clubs Australia; and the Federation of Community, Sporting and Workers Clubs; ‘Club Managers’ Association Australia’ is a union representing professional managers of Clubs; ‘Club Industry’ means all licensed Clubs in New South Wales, whether or not they are members of ClubsNSW; ‘ClubsNSW’ means the Registered Clubs Association of NSW, a State organisation registered under Section 222 of the Industrial Relations Act. ClubsNSW is the peak body for the Club Industry, representing registered Clubs in New South Wales; ‘Code’ means this Code of Practice as revised and published by ClubsNSW from time to time;

‘Code Administrator’ means the individual authorised to investigate and prepare a report to the Code Authority on complaints against Clubs involving alleged breaches of the Code; ‘Code Authority’ means the authority established under clause 51 of the Code; ‘Senior Management’ means the CEO/Secretary Manager/General Manager and other senior executives of a Club;1 ‘Natural Justice’ means the right to a fair hearing free of bias; individuals should not be penalized by decisions affecting their rights or legitimate expectations unless they have been given prior notice of the matter, a fair opportunity to answer it, and the opportunity to present their own case. ‘Patron’ means a person visiting a Club or using a Club’s facilities including, but not limited to, a Club; ‘Staff’ means employees of a Club other than the management. ‘Systemic Failure’ means a pattern of conduct or repeated Code breaches, that points to a serious and/or structural flaw in organisational practice.

1 While there is normally a clear delineation

between elected officials and paid staff, in some smaller clubs that rely heavily on volunteers to fulfil management duties, Board Directors may sometimes be considered senior management.

PART B

CODE COMMITMENTS


LEGAL OBLIGATIONS 17. Because the provision of gambling,

food services and alcohol are core activities, we accept that the Club Industry is highly regulated and that we have a responsibility to be fully informed as to our legal compliance obligations.

18. In particular, we will ensure that our

Directors, management and staff are informed about the primary instruments regulating Clubs, particularly the Registered Clubs Act 1976 (and Regulations), the Corporations Act 2001, the Gaming Machines Act 2001 (and Regulations) and the Liquor Act 2007 (and Regulations).

19. We will provide adequate training and

supervision to ensure compliance with all relevant laws relating to the Club Industry.2

CLUB CONSTITUTIONS 20. We will have, in our constitution or

elsewhere, a clear expression of our aims, purpose and governance structure as an organisation. This will be clearly communicated to members.

21. We will have procedures in our

constitution for dealing with unacceptable behaviour by patrons. We are committed to ensuring that these procedures are faithfully followed and will apply the principles

2 See Appendix 1.

of natural justice in dealing with disciplinary matters.3

22. Where there is any inconsistency

between our Club constitution and any State or Federal legislation, the legislation will prevail.4

23. We are committed to promoting fair

and democratic elections and maximising member involvement by adhering to relevant law and following appropriate procedures for the conduct of Club elections.5

24. We will have in place speedy,

responsive, accessible and user-friendly procedures for dealing with complaints.

CONDUCT OF DIRECTORS, MANAGEMENT AND STAFF 25. We will pursue the aims and purpose

of our Club by:

a. making decisions that are consistent with these aims/purpose and the interests of members;

b. complying with any relevant legislative, industrial and administrative requirement and keeping up to date with any changes to these requirements;

3 For assistance in conducting disciplinary

proceedings refer to the Guideline for the Conduct of Disciplinary Proceedings.

4 Note: there may be instances where the Club constitution is silent on matters that are addressed in legislation or regulations. Club Directors and Managers should take steps to ensure that procedures contained in the club constitution are consistent with statutory requirements.

5 See: Guideline for the Conduct of Board Elections.

CODE COMMITMENTS


c. maintaining adequate documentation to support any decisions made;

d. treating each Club member and employee with due courtesy and respect;

e. providing access to continuing professional development for managers, Directors and staff;

f. achieving operating efficiencies in accordance with Board policies;6

g. obtaining value for Club money spent;7

h. contributing to a safe, healthy and discrimination-free Club environment; and

i. not taking or seeking to take improper advantage of any Club information gained in the course of our appointment (in the case of Directors) or employment (in the case of managers/staff).8

26. We will deal promptly and effectively

with information received that relates to matters that may lead to a material loss to our Club.

COMMITMENT TO THE COMMUNITIES IN WHICH CLUBS ARE LOCATED 27. We acknowledge our responsibility to

the community in which our Club is located in relation to key revenue-generating activities, in particular the provision of gambling and alcohol9.

6 Benchmarks for operating efficiencies are

contained in the Guideline for Benchmarking Club Performance.

7 Examples of waste and extravagance may

include, but are not limited to: private use of Club vehicles, telephone or other assets; or sending more representatives than necessary on overseas study tours.

8 Examples of taking improper advantage of Club

information may include: benefiting (either themselves, a family member or an associate) improperly from the disposal of Club assets such as equipment or land; the improper awarding of a contract for the provision of goods and services; or the improper awarding of a contract for major capital works.

9 See also clauses 39 and 40.

28. We will comply with all relevant noise control measures and, when necessary, work with local councils and the Environment Protection Authority to resolve noise-related issues.

29. As a not-for-profit community

organisation, we will meet our ClubGRANTS 10 and other social obligations and maximise our financial commitment to and support for community projects within the means of the Club.

CONTRACTS WITH KEY EXECUTIVES 30. We will ensure that all senior

management have a contract that details their terms of employment, including roles and responsibilities, the form of their remuneration, and an appropriate termination clause. These contracts will be reviewed by our legal advisors before being approved by our Club’s Board of Directors.11

HUMAN RESOURCE MANAGEMENT AND INDUSTRIAL RELATIONS 31. We are committed to promoting best

practice human resource management and industrial relations between our Club management and employees. With the full support of the Board of Directors, our Club manager(s) will ensure the appropriate terms and conditions of the Award and other relevant industrial instruments are

10

The ClubGRANTS Scheme facilitates clubs in NSW contributing to the provision of front-line services to their local communities and helps ensure that the disadvantaged in the community are better positioned to benefit from the substantial contributions made by those clubs.

11 An employment contract template is available

from ClubsNSW.



applied at all times. This includes effectively managing disputes that may occur in the workplace from time to time.12

32. We will make the continuing

professional development and training of our Club managers and other employees a priority.

PROCUREMENT OF GOODS & SERVICES AND CAPITAL WORKS 33. We are committed to ensuring that

Club procurement of goods & services and capital works represents quality and good value, is subject to a proper tendering process with competitive quotes, and is done in the best interests of the Club and its members.

34. We have in place and are committed

to following a sound framework for major procurements 13 of goods & services and capital works based on the following criteria:

a) All major procurements and

capital works will be properly defined, documented, cost planned and approved in accordance with Board policy;

b) All major procurement and capital works projects will be subject to a risk assessment analysis; and

c) All major procurements and capital works will be subject to appropriate written contracts with the chosen supplier in accordance with Board policy.

12

Nothing in this Code applies to the resolution of industrial disputes or employment related disputes between a Club and its employees.

13 For assistance in determining what constitutes

major procurements refer to the Guideline for the Procurement of Goods, Services and Major Capital Works.

35. If a Director of our Club has a real or potential material personal interest relating to the Club’s procurement of goods & services or major capital works, the nature of that interest will be disclosed at the earliest possible meeting of the Board and any conflicted Director(s) will absent themselves from the Board’s consideration of the procurement or project.

36. Properly documented selection

criteria will be used to appoint suppliers and service providers for major procurements.

37. The Board of Directors will act

diligently and in the best interests of the Club in approving and overseeing procurement of goods & services and major capital works.

RESPONSIBLE PROVISION OF GAMBLING 38. We support the provision of a

responsible gambling environment for all patrons of our Club by:

a) Informing and training staff to

ensure they are familiar with all legislative requirements of licensed venues that offer their patrons gambling activities;

b) Ensuring all staff who have gambling-related duties are trained in the Responsible Conduct of Gambling (RCG) and can respond appropriately to a request for assistance from a problem gambler or a concerned other;

c) Implementing policies to encourage responsible practices in promotions related to gambling;

CODE COMMITMENTS


d) Informing patrons and staff of the Club’s responsible gambling policy and the availability of support services for problem gamblers; and

e) Establishing a responsible gambling environment where anybody requiring assistance with a gambling problem will be handled with respect and discretion, and referred to services that can assist (such as a local cost-free gambling counselling service &/or self-exclusion).

RESPONSIBLE SERVICE OF ALCOHOL 39. We will demonstrate our commitment

to the responsible service of alcohol by:

a) Providing approved training of

management and staff in the responsible service of alcohol;14

b) Refusing to serve alcohol to persons who are obviously or visibly affected by alcohol;

c) Avoiding the promotion of alcohol in a way that could encourage minors to seek to purchase or to consume alcohol;

d) Avoiding the promotion of alcohol in a way that could encourage the excessive consumption of alcohol;

e) Refusing alcohol service to under age persons and requiring the presentation of Proof of Age and other approved forms of identification before providing services to persons we suspect of being minors;

f) Making Club patrons aware of their responsibility under the law in respect of the supply of alcohol

14

Trainers must be approved by the Office of Liquor, Gaming and Racing.

to minors and intoxicated persons; and

g) Not supporting any pricing practice which encourages the excessive consumption of alcohol.

FINANCIAL MANAGEMENT AND REPORTING 40. Financial management practices will

be consistent with the appropriate standards.15

41. Financial decisions will be consistent

with the Board’s approved goals and approved budgets.

42. The Board will oversee and ensure

adherence to approved budgets. 43. The Board will establish boundaries

and limits regarding:

a) capital investments; b) remuneration and benefits; c) protection of assets; d) tendering; e) cost containment; and f) efficient use of labour.

44. The Board will obtain from

management prompt and detailed reporting where limits and boundaries are exceeded.

45. Financial reports that accurately

reflect the true financial position of the Club will be provided for each Board meeting.

46. The operation of financial systems and

financial safeguards will be subject to external audit at least on an annual basis.

15

See: Guideline for Financial Reporting.



PRIVACY AND CONFIDENTIALITY16 47. We acknowledge that, as a

membership-based organisation, our Club is entrusted with personal information. We will comply with our duties under the Privacy Act 1998 (as amended in 2013.

16

See Section 16: Anti Discrimination and Privacy

PART C

MONITORING AND ADMINISTRATION


48. A Code Authority and Code

Administrator will oversee compliance with the Code.

49. The Code Authority is appointed by

the Board of ClubsNSW. It is made up of an independent Chair and two or more persons selected for their knowledge of the Club Industry and its regulatory framework, including the Code of Practice. All determinations are made by consensus agreement.

50. The Code Administrator will be

appointed by ClubsNSW. 51. The Code Authority will report to the

Board of Directors of ClubsNSW annually or more frequently, if deemed necessary.

PART D CODE ENFORCEMENT - RESPONSIBILITY,

REVIEWS AND SANCTIONS


RESPONSIBILITY OF CLUBS TO CO-OPERATE WITH THE CODE AUTHORITY 52. Our Club will ensure that it:

a) co-operates with the Code administrator and Code Authority, and provides information about any alleged breach of the Code; and

b) monitors its compliance with the Code.

DEALING WITH ALLEGED BREACHES17 53. The Code administrator will receive

complaints about alleged breaches of the Code by Clubs and will consult with Clubs in respect of the alleged breaches and make recommendations to the Club, if necessary, about the alleged breach and the Club’s compliance with the Code.

54. The Code administrator may receive

submissions from both the complainant and the Club, as well as any other individual or organisation deemed relevant, about alleged breaches of the Code. The Club will have an opportunity to make representations to the Code Authority in respect of the steps taken to address the matter and to prevent the alleged breach or breaches recurring. This information will be compiled by the Code Administrator and provided

17

The scope of Code enforcement procedures is limited to alleged breaches of the Code. It does not include resolution of complaints by individuals or organisations against Clubs which would normally be dealt with by the Club’s internal complaints handling process. See: Guideline on Complaints Handling.

to the Code Authority for consideration.

55. The Code Administrator will provide

reports to the Code Authority concerning the facts of alleged breaches of the Code.

56. The Code Authority will determine the

outcome of alleged breaches of the Code.

57. Where a report is made under clauses

59 and 60, the Code Administrator will advise the Club of the Code Authority’s determination.

58. If, after considering representations

from the Club, the Code Authority is of the opinion that the steps taken for rectification or to stop the breach or breaches recurring are inadequate, the Code Authority will advise the Board of the Club in writing and give notice to the Club whether or not it proposes to impose sanctions on the Club for non-compliance with the Code and what the sanctions will be.

SANCTIONS THAT MAY BE IMPOSED BY THE CODE AUTHORITY 59. If the Code Authority finds that a Club

has:

a) committed a breach of the Code; or

b) committed a series of breaches of the Code indicating systemic failure, it may recommend one or more of the following sanctions:

CODE ENFORCEMENT - RESPONSIBILITY, REVIEWS AND SANCTIONS


that the matter be rectified in line with the Code Authority’s determination;

that particular remedial steps be taken by the Club in accordance with a specified timetable;

that staff, management or Director training be undertaken;

that an apology be offered (if appropriate);

that financial compensation be made (if appropriate);

that the Club perform a specified community service;

that a compliance audit be undertaken;

that corrective advertising be placed;

that the Club be named either immediately and/or in the ClubsNSW annual report as having breached the Code;

recommend to the Board of ClubsNSW that the membership of the offending Club be cancelled; or

refer the matter to the Minister for Gaming and Racing or other Government Authority for further action.

60. Where the Code Authority is of the

view that a breach of the Code has not occurred, then both the complainant and the Club are advised and the matter is concluded. Where the Code Authority is of the view that a breach of the Code has occurred, and the steps taken to rectify the matter and prevent its recurrence are satisfactory, the Code Authority will advise both the complainant and the Club in writing of that conclusion.

61. The Code Authority will not impose sanctions for at least 20 business days after notice under clause 63 has been given. The Club will have an opportunity during this period to make further representations for the Code Authority’s further consideration. If at the end of that period the Code Authority is still of the opinion that:

a) there has been a breach or a

systemic failure; or b) there has been a breach or a

systemic failure and the steps taken for rectification and to stop the breach or breaches recurring are inadequate;

the Code Authority may impose further sanctions.

62. When imposing any sanctions on a

Club, the Code Authority will have regard to:

a) the objectives and purpose of the

Code; and b) the severity of the breach of the

Code and the appropriateness of the sanction;

c) the degree to which the Club cooperated with the Code Administrator and the Code Authority during the investigation and adjudication of the matter.

63. Where a Club does not cooperate with

the Code Administrator or does not comply with the determination of the Code Authority, it will be considered a serious breach of the Code regardless of the nature of the original complaint. The Code Authority may avail itself of any sanction under clause 59.



REPORTING 64. The Code Authority may report to the

Board of ClubsNSW or an appropriate agency in respect of its activities but it shall not publicly disclose the name of a Club that is alleged to have breached the Code or on whom sanctions have been imposed, or any information that might identify the Club, unless it recommends that the Club be named immediately or in the annual report or unless the Club consents.

65. Any complaint against a Club that is

not a member of ClubsNSW will be referred to the NSW Office of Liquor, Gaming and Racing or other relevant body.

REVIEW OF SANCTIONS 66. A Club that is sanctioned under this

Code may request that the sanction be reviewed by the Board of ClubsNSW and, in that case, if the Board considers that there are grounds for review, the Board may refer the matter to the Code Authority for reconsideration.

FAILURE TO COMPLY 67. The Code Authority will report to the

Board of ClubsNSW any failure by a Club to comply with a sanction imposed on it and recommend action to be taken by the Board.

68. A copy of the report to the Code

Authority by the Code Administrator will be given to the Board of the Club and the Club is entitled within 20 business days of receiving that report or in such further period as the Code Authority may permit to make a submission to the Code Authority in

relation to the matters contained in the report.

NAMING AND ENFORCEMENT OF SANCTIONS 69. The Code Authority, after considering

any submission made by the Club under clause 68, may determine to name a Club immediately or in the annual report as having failed to comply with the Code and set out the nature of the non-compliance in a report to the Board of ClubsNSW.

70. The Board of ClubsNSW may direct the

Code Administrator to take such steps as it believes appropriate to enforce any sanctions imposed by the Code Authority. The Board of ClubsNSW may take other disciplinary actions against the member in accordance with the ClubsNSW constitution.

APPENDICES


APPENDIX 1 Listed below are the main Acts that apply to all Clubs. Note: this is not an exhaustive list and Acts are not presented in alphabetical order.

NSW STATE LEGISLATION 1. Registered Clubs Act 1976 2. Gaming Machines Act 2001 3. Gaming Machines Tax Act 2001 4. Liquor Act 2007 5. Charitable Fundraising Act 1991 6. Fair Trading Act 1987 7. Industrial Relations Act 1996 8. Annual Holidays Act 1944 9. Long Service Leave Act 1955 10. Lotteries and Art Unions Act 1901 11. Public Lotteries Act 1996 12. Racing Administration Act 1998 13. Work Health and Safety Act 2011 14. Apprenticeship and Traineeship Act 2001 15. Unlawful Gambling Act 1998 16. Smoke-free Environment Act 2000 17. Food Act 2003 18. Anti-Discrimination Act 1977

COMMONWEALTH LEGISLATION 19. National Gambling Reform Act 20. Corporations Act 2001 21. Privacy Act 1988 22. Trade Practices Act 1974 23. Income Tax Assessment Act 1997 24. A New Tax System (Goods and Services Tax) Act 1999 25. Anti-Money Laundering and Counter-Terrorism Financing Act 2006 26. Sex Discrimination Act 1984 27. Disability Discrimination Act 1992 28. Registered and Licensed Clubs Award 2010


BEST PRACTICE GUIDELINES

Best Practice Guideline: MAJOR CAPITAL WORKS


1. PURPOSE This Guideline aims to assist ClubsNSW Members dealing with major capital works projects by:

setting out the main steps that should be followed in evaluating, planning and managing capital works projects;

considering the key questions that need to be made at various stages; and

describing the main criteria for selecting outside experts to assist with the project.

Given the wide variety of types and sizes of Clubs, the term “major” is a relative one. By the same token, projects vary in complexity, size and importance. The resources spent on appraisal of projects should be in proportion with the cost of the project, its degree of complexity, risk and the size of the Club. In general, more detailed appraisal criteria should be applied to projects which:

are estimated to have a capital cost in excess of $500,000 or 2.5% of last audited total revenue;

involve complex or specialised issues or untried technology; or

are unique and unprecedented in the Club industry.

2. DEFINITIONS ‘Disposal of core property’ is defined as per the Registered Clubs Act 1976. ‘EBITDA’ means earnings before interest, taxes, depreciation and amortisation.

‘Fixed assets’ are tangible Club assets such as land, Club buildings and facilities, accommodation and sporting facilities. ‘Major capital works’ are improvements, replacement or additions to Clubs’ fixed assets.

3. BACKGROUND Among the most important decisions Clubs make are those relating to refurbishments, extensions or other major capital works. Clubs rely on improvements to fixed assets such as buildings, plant and equipment, parking, etc to provide services to members and attract new patronage. Major capital works involve a combination of materials, plant, equipment and labour and can include, for example:

New equipment (e.g. air conditioning);

Refurbishments (e.g. carpeting, kitchen fit-out);

Extensions; and

Redevelopment of Club land (e.g. residential development).

4. GUIDING PRINCIPLES Major capital works should be commissioned and implemented in the best interests of Club members in line with these principles:

Projects should be properly researched and analysed in respect to market feasibility and the long term strategic position of the Club;



Projects should be properly defined, documented, cost planned and approved;

Projects should be subject to appropriate contracts with the chosen supplier;

Clubs should seek legal advice on contracts associated with major capital works;

Club members should be provided information and given opportunities to comment at regular intervals during the planning and execution of major capital works projects;

The Board of Directors should act diligently and in the best interests of Club members in approving and overseeing major capital works projects;

Directors should avoid any conflicts of interest in relation to a capital works project of the Club;

Proper processes should be used to appoint third parties. Where non-price criteria are used to select these third parties, these criteria should be documented; and

Legal requirements should be adhered to.

5. DISPOSAL OF CORE PROPERTY There are controls on the disposal of core property of a Club18. If the project involves the disposal of core property, it should be conducted in accordance with Sections 41J of the Registered Clubs Act 1976. Since 2004, section 41J of the Registered Clubs Act has imposed very strict controls on the disposal of Club land. Section 41J

18

Note: the Registered Clubs Act 1976 defines core property as a Club’s defined premises (the Club house), any facilities provided for members and guests (car parks, bowling greens, golf courses etc), but allows Members to declare property as ‘non-core’.

includes the concepts of “core property” and “non-core property”. All land owned or occupied by a Club is classified as either core property or non-core property for the purposes of section 41J.

Core property is:

the defined premises/licensed premises of the Club, that is the Clubhouse;

any facility provided by the Club for the use of members of the Club and their guests.

This is intended to catch facilities such as car parks, bowling greens, golf courses and tennis courts. However, it has potentially wider implications and may include other land; and

any other property which the members at a general meeting, by a resolution passed by a simple majority, declare to be core property. In other words, any land owned by the Club can be designated as core property by the members.

Non-core property is all land of the Club which is not core property. While these definitions of core and non-core property are contained in section 41J, the section also provides that the ordinary members of a Club can pass a resolution at a general meeting to have core property declared to be non-core property and vice versa. Accordingly, a block of land which is used for the Clubhouse or facilities such as a golf course or bowling green or Club car park is core property. However, the ordinary members could pass an ordinary resolution to have the land declared to be non-core property.

The relevance of the distinction between core and non-core property relates to how land can be disposed of. A Club can only dispose of core property in accordance with section 41J(3) which requires:

MAJOR CAPITAL WORKS


the disposal to be approved by a resolution passed by a majority of the ordinary members of the Club;

the disposal must be by way of public auction or open tender conducted by an independent real estate agent or auctioneer; and

the property must be valued by a registered valuer within the meaning of the Valuers Act 2003.

“Dispose of property” in section 41J means to “sell, lease or licence the property or to otherwise deal with the property in such manner as may be prescribed by the Regulation”. This provides for a broad definition of disposal. Clubs need to be aware whenever they are dealing with any of their core property that a transaction may be a disposal for the purposes of section 41J, even if the Club does not believe it is disposing of any of its land. Exceptions to section 41J Clause 19 of the Registered Clubs Regulation sets out exceptions to section 41J of the Act. If an exception listed in the Regulation applies to a particular transaction, section 41J will not apply to the disposal of that core property. Of course, if the Club is disposing of non-core property section 41J will not apply at all. The exceptions to section 41J in clause 19 are expressed as follows: Section 41J (3) of the Act does not apply in relation to the disposal of any core property of a registered Club in any of the following circumstances:

i. the property is being leased or licensed for a period not exceeding 10 years on terms that have been the subject of a valuation by a registered valuer,

ii. the property is being disposed of to a wholly owned subsidiary of the Club,

iii. the property is being leased or licensed to a telecommunications provider for the purposes of a telecommunication tower,

iv. the disposal of the property involves calling for expressions of interest and a subsequent selective tendering process, and the disposal and disposal process has been approved by a majority vote at a general meeting of the ordinary members of the Club,

v. the property is being sold by private treaty, but only if it failed to sell at public auction or open tender following compliance with the requirements of section 41J (3) of the Act,

vi. the terms and nature of the disposal (including details of the parties, property, price and valuation) are disclosed to the ordinary members of the Club, and the disposal is approved at a general meeting of the ordinary members of the Club,

vii. the Director has, on application by the registered Club, approved of the property being disposed of otherwise than in accordance with section 41J (3) of the Act.

Section 41J (3) of the Act does not apply in relation to the leasing or licensing of any core property of a registered Club if the lease or licence:

i. is granted to a person for the purpose of enabling the person to provide goods or services exclusively to members of the Club and their guests and to other persons attending the Club in accordance with a functions authority held by the Club under section 23 of the Act, or

ii. is granted to a person for the purpose of enabling the person to provide goods or services to members of the



Club and their guests and to other members of the public and the granting of the lease or licence for that purpose has been approved at a general meeting of the ordinary members of the Club.

Section 41J (3) of the Act does not apply in relation to the disposal of any core property of a registered Club to a government department, statutory body representing the Crown, State owned corporation or local council. Reporting to members Section 41J(2) provides that “the annual report” of each Club must specify the land of the Club which is core property and the land which is non-core property as at the end of the financial year to which the annual report applies.” “Annual report” is not defined in the Registered Clubs Act or the Corporations Act but it has traditionally been held to refer to the financial statements and accounts, directors’ report and auditor’s report which are sent to members each year. The members do not approve or determine the classification between the Club’s land as core property and non-core property. This is the task of the Board. Once allocated, the classification must be included in the annual report. A simple statement which sets out which land is core property and which land is non-core property is sufficient to meet the obligation under section 41J(2). However, this does not inform members of the effect of the allocation between core and non-core property. It is preferable that the consequences of the allocation be included in the annual report so that members are made aware.

If a Club disposes of core property other than in accordance with the Registered Clubs Act, the OLGR can make application to the Supreme Court for an order:

declaring a contract for the disposal of land void;

that the land be transferred back to the Club;

directing the payment of an amount or further amount in relation to the disposal of the land by the person to whom the Club has disposed of the land; and

such other orders as may be necessary.

The Director General could also take disciplinary action against the Club under the Registered Clubs Act which could lead to removal of office of directors and/or the secretary, substantial monetary penalties and possibly cancellation of the Club’s licence.

6. PRELIMINARY APPRAISAL All major capital works projects should be properly defined. This is a step-by-step process commencing with an initial brief, conceptual options with approximate cost estimates and early feasibility analysis. The systematic appraisal of all major capital works projects helps ensure the best choices are made and the best value for money is obtained. Before embarking on major capital works projects, Club Directors and management need to carefully consider and document their justification for planned expenditure. However, it is not enough to be satisfied the investment is justified in terms of need; it is also necessary to ensure that it produces its planned benefits to Club members and the wider community.

MAJOR CAPITAL WORKS


The preliminary appraisal should include a clear statement of the need which the project is designed to meet and how this will be achieved. It should identify all realistic options, including the option of doing nothing and, where possible, quantify the key elements of all options. It should assess the costs and benefits of all options, identify the preferred one, and recommend whether its benefits are sufficient to warrant incurring the costs. Costs include the initial capital cost and the ongoing costs generated by the use of the capital asset. Avoiding Premature Commitments All involved in the appraisal and management of projects should guard against the danger that when a project is mooted, it is given a degree of premature commitment. This should be avoided. A sequence of considered decisions generally will lead to progressively greater commitment of resources, but an irrevocable commitment to proceed should only be made after all appraisal stages have been satisfactorily completed and final approval obtained. These decision points should be clearly noted in the minutes of Board and/or relevant Committee meetings. Ability to Pay Before moving on to a detailed appraisal of the project, the Club needs to consider its capacity to pay for the project. It should be recognised at the outset that major capital works projects involve the Club investing in additional operating assets. If the Club intends to rely on a financial institution for funding, an initial approach should be made at this stage to assess likely repayment terms. At this stage, Clubs should conduct an assessment of the financial impact of the

planned major capital works project. This assessment should include:

profit and loss projections showing the impact of the project on the main revenues and costs of the Club;

balance sheet projections showing the impact of the project on the finances of the Club; and

cash flow analysis - showing the impact of the project on cash flow.

While the assessment does not have to be extremely detailed at this stage, it should be recognised a more accurate analysis will improve the confidence of members in the viability of the project and the Board’s ability to deliver it.

7. DETAILED APPRAISAL If the preliminary appraisal is favourable, the proposal is further developed and defined, usually by a third party entity. Clubs should be aware of the different approaches for major capital works and carefully consider which is the most appropriate approach for their specific needs, remembering that the choice lays with the Club, not the third party entity. The way in which the Club allocates responsibilities to third parties throughout a project should be determined only once the Club has established its key needs and criteria for the project. Some common methods include:

Design and Construction – where the responsibility for the design, documentation and construction is contracted to a single entity;

Design and Tender – where the design is documented and then tenders



sought from a single contractor for construction19; and

Construction Management – where a professional agent undertakes the management of the individual trade tendering for a management fee. The Club enters contracts directly with each trade rather than a single building contractor.

At this stage, the Club should answer the following questions: Q1: Building upon the analysis done during the preliminary appraisal, what is the justification for the project? Clubs need to consider in detail:

affordability;

benefits to members;

increase to patronage/revenue;

benefits to community;

special features being considered;

necessity such as market demands, compliance upgrade, wear and tear, diversification of income, operational efficiencies, maintenance problems, etc; and

conformity with the Club’s medium to long term business plans and goals.

Q2: Is there any design component? Clubs need to consider the design in the form of drawings and/or specifications that are needed to obtain approvals from authorities (if required) and to describe quality, extent, visual and other requirements of the Club. Consultants should be briefed on the Club’s chosen procurement methodology to ensure

19

Note: such tenders can be sought in a number of formats. For example, lump sum, negotiated or novated (where the remainder of the design/documentation responsibility is ‘novated’ or transferred to the contractor).

documentation is appropriate to the Club’s contractual needs. Q3: Does the Club have the resources to manage, supervise and accept construction risk? It often requires a high level of expertise to properly design, document and construct. Managing capital works projects is not part of Clubs’ core activities, so outside expertise may be required. In determining the Club’s role, the Board should be aware that:

a project manager who is an employee will need to be qualified 20 and be allocated sufficient resources and time;

the Club will be deemed as being the Principal Contractor under the Work Health and Safety Act 2011 and will require a safety system and management practices which comply with Work Health and Safety Act 2011, and NSW Government Work Health and Safety Management System Guidelines21;

special insurances will be required;

the Club will require expertise to properly manage the human resources needed on a construction project such as checking trade contractors’ credentials (work cover authority, insurances, workers compensation declaration forms, etc); and

the Club will require qualified resources to establish formal contacts with trade contractors and purchase agreements with suppliers which establish scope, risk allocation, price,

20

E.g. hold a builders licence issued by the NSW Department of Fair Trading and be properly trained in the management of Workplace Health and Safety in a major capital works environment

21 The majority of capital works projects

undertaken by Clubs involve at least some refurbishment of their current premises. This carries with it a high occupational health and safety risk and the need for complex staging to minimise the disruption to normal trading.

MAJOR CAPITAL WORKS


terms of payment, quality, time, warranties, maintenance requirements and other obligations.

Q4: Has the Club addressed the key financial issues? A thorough financial analysis needs to be prepared at this stage quantifying financial costs (both current and ongoing capital) and specifying sources of funding. Key factors to consider in determining whether the Club should undertake the project are:

Interest Coverage Ratio on Loans – this is a calculation of the number of times interest owed is covered by EBITDA;

Maximum Debt Level – this is usually determined by a multiple of EBITDA. Financial institutions usually have a minimum benchmark. Note: It is important that the institution’s lending criteria be properly understood;

Cash flow – this needs to be monitored closely so that the repayment can be met;

Return on investment – the Club should determine in advance how it intends to measure the results projected to flow from the expenditure. Not all major capital works will be measurable in strict dollar terms. For example, the return on a Club’s investment in a sports field will be difficult to quantify in financial terms. However, major capital works that are planned to deliver commercial returns should be readily quantifiable; and

Impact on current operations – quantify potential disruption to business (e.g. gaming floor, car park etc).

Information to Members Once the detailed appraisal has been completed and a decision made to proceed, members should be presented with information that addresses at a minimum, the “4w’s” (what, when, where, and why). Sufficient information should be provided to give members a clear understanding of the scope and nature of the project.

8. PROJECT IMPLEMENTATION Once the major capital works project is fully defined, documented and approved, further implementation can commence. For larger projects, Clubs should select an independent expert22 to act on their behalf to manage the delivery of major capital works projects. The independent expert should, on behalf of the Club, arrange the employment of necessary consultants to define, design, document and gain approvals for the project. They should obtain at least three independent quotations for all sub/trade contractor and supplier works. In some circumstances the Club and independent expert may form the opinion that the lowest tendered price does not conform to the needs of the Club. An example may be the capacity of the service provider to perform the necessary works within time, cost and ability, including Work Health and Safety. In that circumstance, the next lowest price should be used, providing it conforms to the needs of the Club.

22

An independent expert could for example be an experienced quantity surveyor. It is suggested that clubs use the Business Register on the Australian Institute of Quantity Surveyors (AIQS) website www.aiqs.com.au to locate an AIQS member who is subject to the AIQS Code of Conduct, professional indemnity insurance requirements and professional standards of practice



When making a decision it is important that Clubs document the reasons why, and why not, a particular action was taken. For example, Clubs should document why an organisation was suitable and why another was not suitable. Selection of Third Parties In most cases Clubs will need the expertise of a number of outside specialist organisations to enable major capital works projects to be defined, documented, cost-planned and approved. Third parties include consultants, architects, engineers, suppliers, builders, managing contractors, project managers and sub/trade contractors, among others.23 A combination of price criteria and non price criteria may be used to select these third parties. The selection criteria should be documented then conscientiously applied. For example, selection criteria for a construction project should establish whether the company is a qualified construction company that can act as the Principal Contractor. Club Directors need to ensure the company:

has necessary insurances (professional indemnity, contract works, public liability and workers compensation);

holds a builder’s licence;

has an occupational health and safety system in place which complies with Work Health and Safety Act 2011, and NSW Government Work Health and Safety Management System Guidelines edition 4 (or the most recent);

has a track record, references, experience, etc; and

is to be formally evaluated against the non price criteria listed below.

23

ClubsNSW can provide a list of suppliers with extensive expertise and knowledge of the club industry.

Clubs may make a selection by comparing capable organisations using non price criteria, provided that fees and charges are reviewed by a qualified independent quantity surveyor 24 (with relevant experience) engaged by the Club. Non price selection criteria typically include:

Intellectual property from past work;

Industry knowledge and specialty expertise25;

Adequacy of insurances;

References/reputation;

Financial viability;

Resources available/capacity to perform;

Work Health and Safety compliance;

Unique product or services;

Industrial and workplace relations;

Qualifications (e.g. builder’s licence);

Contractual adequacy;

Guarantees/risk taking offered;

No conflicts of interest with Board and management;

Transparency of costs; and

Weighing against other alternatives.

Subject to the above points, Clubs can negotiate with one company to achieve a desired outcome, provided that fees and charges by the company are reviewed by a qualified independent quantity surveyor (with relevant experience) engaged by the Club. Clubs may also employ an independent specialist at key milestones throughout the project to undertake an audit role by checking progress is as expected.

24

A quantity surveyor is usually required by banks

if debt funding is involved. 25

Due to the unique nature of the Club industry,

industry knowledge and experience should be highly valued

MAJOR CAPITAL WORKS


Where a Club settles on a bid that was not the lowest price, reasons for the decision should be documented. Clubs should refer to the Guideline for Procurement of Goods and Services for detailed guidance in this area.

Best Practice Guideline: PROCUREMENT OF GOODS AND SERVICES


1. PURPOSE The purpose of this Guideline is to encourage the highest standard of practice by Clubs in regard to the procurement of goods and services.

2. DEFINITIONS ‘Contract’ means a legally binding agreement involving mutual obligations. ‘Fairness’ means being just, equitable, reasonable and even-handed. ‘Tender’ means a written price, bid, quotations and consultant proposals for the supply of goods or services. ‘Tenderer’ means any party submitting tenders. ‘Value for money’ means the balance between the price of goods or services and other factors relevant to quality and meeting specific needs of Clubs, for example: experience, reliability, timeliness and service.

3. BACKGROUND Among the most important decisions Clubs make are those relating to the provision of goods and services. Clubs purchase a wide array of goods ranging from food and beverage to gaming and office equipment. Outsourced services vary from professional (accounting, legal, etc) to cleaning, catering and maintenance. For major procurements such as building projects Clubs can select a supplier by way of tender.

4. GUIDING PRINCIPLES

Boards of Directors and management have a responsibility to ensure that purchases of goods and services are undertaken in an ethical manner and should be guided by the following principles. Clubs should always seek to obtain value for money when making procurement decisions and balance both price and non-price (e.g. quality, member demand) considerations:

all aspects of the procurement process should be conducted with honesty and fairness at all levels of the industry;

Clubs and suppliers should conform to all legal obligations;

material personal interests and conflicts of interest should be avoided, and any person (such as a Director or Secretary of a Club) with such an interest should declare that interest as soon as the conflict is known to that person; and

inducements offered by suppliers relating to the purchase of goods or services should not be allowed to influence purchasing decisions.

5. DISCLOSURE Consistent with the requirements of the Registered Clubs Act 1976, a Director of a Club who has a material personal interest26

26

For the purposes of Section 41K of the Act, a Club Director or top executive is considered to hold a pecuniary interest in a company if they have a shareholding of more than 5 per cent, if the company is involved in selling gaming machines or liquor to the Club, any shareholding gives rise to a pecuniary interest.

PROCUREMENT OF GOODS AND SERVICES


including a pecuniary interest or a conflict of interest in a Club procurement should as soon as practicable declare the nature of the interest at a meeting of the Board of Directors. Once a declaration has been made, notice of that declaration should be:

recorded in a register in accordance with Section 16 of the Registered Clubs Regulation; and

made available to members pursuant to Section 18 of the Regulation; and

noted in the minutes of the Board Meeting that the conflict is declared.

6. TENDERING METHODS

Clubs should use the following processes when selecting a supplier of goods or services by means of a tender:

parties should not seek or submit tenders without a firm intention to proceed;

parties should not engage in any practice that gives one party an improper advantage over another;

conditions of procurement should be the same for each tenderer on any particular project;

Clubs should clearly specify their requirements in the tender documents and indicate criteria for evaluation;

evaluation of tenders should be based on the conditions of procurement and selection criteria defined in the tender documents; and

the confidentiality of all information provided in the course of procurement should be preserved.

Invited Tenders

There are four types of invited tender:

Open - Clubs invite tenders by public advertisement without restriction on the number of tenders received. Tenderers are required to demonstrate they have the right product and the necessary skills, resources, management practices and financial capacity to meet Club requirements;

Selective - Clubs with a continuous program of works, select a limited number of tenderers, from a register of approved tenderers;

Expressions of interest - Clubs invite expressions of interest for specific projects or specific types of projects. Applicants are evaluated against published selection criteria and a number of those who best meet the required criteria are invited to tender; and

Pre-qualified - Tenders are invited from a register of approved tenderers who are known to have the ability to undertake a specialist project of the type proposed.

Negotiated Tenders

Clubs may negotiate with a single supplier to achieve a desired outcome provided that:

non-price selection criteria and evaluation are formally documented and accepted by the Club’s Board of Directors; and

for capital works projects, an independent qualified expert on costs such as a quantity surveyor reviews the fees, charges and costs quoted to be reasonable for the goods, services or works offered.



Negotiations should deal fairly with all tenderers in a manner which reflects the core principles of this Guideline. In some circumstances the Club may form the opinion that the lowest tendered price does not conform to the needs of the Club. An example may be the capacity of the tenderer to provide the necessary services within time, cost and ability. In that circumstance, the next lowest price may be used, providing it conforms to the needs of the Club and the reasons for choosing it are documented.

7. PREPARATION OF TENDERS

Tender Documents

The tender documents should:

clearly define the contractual obligations of the parties;

provide full details of all work covered by the tender;

draw attention to any special conditions or obligations under the contract which depart from the Club’s normal practice;

designate any supporting information required from tenderers;

nominate a person for the provision of additional information;

provide positive encouragement to tenderers, allowing them the option, in addition to submitting a conforming tender, to show how an alternative might offer better value for money; and

identify the selection criteria on which the assessment of tenders will be based.

Selection Criteria

Selection criteria should include but may not be limited to:

conformity of goods or services to Club requirements;

value for money;

quality assurance;

price compared with estimated cost;

technical, management, physical, environmental management and financial resources;

current commitments;

innovation;

contractor’s previous performance; and

industrial relations and work health and safety record.

Selection criteria should be clearly advertised in the tender documents. If criteria have not been included in the tender documents, the criteria should be determined prior to evaluation of tenders to ensure an objective and rational basis for the assessment. Weighting of selection criteria should be decided prior to the closing of tenders but should not be disclosed to tenderers.

8. PROCEDURES FOR INVITED TENDERS

Advertisement of Tenders

Where tenders are called by public advertisement, Clubs should provide equal opportunity to all qualified tenderers. Tenders should be advertised so as to attract suitable and competitive bidding and the advertisements should include as a minimum:

adequate description of the goods or services required;

advice from where tender documents may be obtained and particulars of the contact officer;

PROCUREMENT OF GOODS AND SERVICES


precise details of where and when tenders will close;

price of purchasing the tender documents, if applicable; and

prominent notification of the need for awareness of the Club Code of Practice and Best Practice Guidelines.

In framing the advertisement, Clubs should allow a reasonable time for tenderers to make site visits and undertake any other work necessary to allow them to respond fully. Clubs should make the site reasonably available for inspection by tenderers.

Communication with Tenderers

Any information given to a particular tenderer should also be given promptly to all other tenderers. Clubs should nominate a person with knowledge of the work to respond to all enquiries from tenderers. All such enquiries should be recorded, noting time and date of receipt and the issue discussed. Where an enquiry reveals a significant error, including ambiguities or discrepancies, information provided should be promptly conveyed in writing to all tenderers. Where the tender documents require a pre-tender conference, such conference should be minuted and the minutes should be forwarded to all tenderers, and become a part of the tender documents.

Amendments to Tender Documents

Where it becomes necessary to amend tender documents, the amendments should be advised as an addendum to all tenderers in sufficient time for all tenderers to properly and fully consider the addendum before tenders close.

Each addendum should clearly state that it is meant to be incorporated in the tender documents. Tenderers should confirm in their tenders that allowance has been made for each addendum.

Receipt of Tenders

All necessary arrangements should be made to safeguard the security and confidentiality of all tenders. Tender documents should specify the method and time for lodgement of tenders. Public acknowledgment of those tenderers submitting a tender should be made. Late tenders should not be accepted, except:

when it is clear that the cause of the lateness was beyond the tenderers’ control; and

when there is no possibility the integrity of the procurement process has been compromised.

Where a late tender is received, the time and date of receipt shall be noted on the document and endorsed by the recipient.

9. EVALUATION OF TENDERS Tenders should be assessed by people who are free of any conflict of interest that might undermine the objectivity of the assessment. Tenders should be assessed in a consistent fashion against the selection criteria contained in the tender documents. If necessary, outside expertise should be called upon to help with assessment. Any tender which does not comply with the tender documents should be rejected. Where a Club rejects a tender, the reasons for such action should be clearly documented by the Club.



Should Clubs seek a revised tender, they should specify the conditions under which revised proposals are to be submitted. Where a tenderer offers an alternative, a comparable price for the alternative should not be obtained from other tenderers nor should the detailed alternative be used as the basis for the recall of tenders.

10. NEGOTIATIONS Should none of the tenders be acceptable, negotiations may be conducted, preferably in the first instance with the least unacceptable with the aim of achieving a conforming tender. Unless time constraints prevent it, Clubs should first exhaust negotiations with the preferred tenderer(s), before negotiating with subsequent tenderers. Clubs should not in post tender negotiation unfairly seek to trade off different tenderers’ prices against others in an attempt to seek lower prices. This practice is sometimes known as ‘bid shopping’ and is unacceptable. Written records of all negotiations should be maintained by the Club.

11. OUTCOMES OF TENDERS Clubs may advise the name of the successful tenderer and the awarded contract sum. No information should be released in relation to unsuccessful tenders. Unsuccessful tenderers for major procurements should be advised (in writing) that their tenders have been unsuccessful. For major procurements, the option of providing a debriefing for unsuccessful

tenderers, as to how their tender performed against the selection criteria, may be pursued with the objective of enhancing future performance.

12. FAIR DEALING

Negotiations In any tender related negotiations or evaluation, the Club should deal fairly with all tenderers in a manner that reflects the core principles of this Guideline. Clubs should not in any way seek to trade off different tenderers’ prices against others in an attempt to seek lower prices.

Confidentiality

Confidentiality of information, particularly intellectual property, should be preserved throughout the tender process. This means that information provided by a tenderer relating to a tender should not be divulged to another tenderer, at any stage during the process, or after it has been concluded.

Best Practice Guideline: BENCHMARKING CLUB PERFORMANCE


1. PURPOSE

This Guideline establishes a framework for benchmarking the financial performance of Clubs.

2. DEFINITIONS

‘Benchmarking’ is the process whereby Clubs measure their performance and compare it with others (inside and outside the industry) for the purpose of improving performance in key areas of operation. This process helps Clubs, among other things:

improve overall profitability and efficiency;

improve productivity of staff;

control costs;

utilise equipment and other assets more effectively; and

meet their community support obligations.

‘Capital expenditure’ is expenditure relating to extending, renovating or maintaining Club facilities or the purchase of capital items such as gaming machines. ‘EBITDA’ means earnings before interest, tax, depreciation and amortisation. ‘EBITDARD’ is a variation of EBITDA and means earnings before interest, tax, depreciation, amortisation, rent and donations. ‘Gross profit’ means sales revenue minus sales costs. It is also sometimes called “sales profit”. ‘Reinvestment’ is capital expenditure necessary to upgrade or renovate facilities

to satisfy the needs of members and to cater for changes in consumer demand.

3. BACKGROUND

By definition, Clubs are not-for-profit organisations. They are established by groups of people sharing a common interest who come together to provide facilities and benefits that promote the common interest. They exist to provide these benefits to members and the surrounding community. Profits cannot be distributed to individuals and Clubs cannot be sold. The unique nature of Clubs is reflected in the way they operate and perform financially. They are fundamentally different from commercial enterprises such as hotels or casinos whose primary goal is the generation of profit for their owners or shareholders. In this increasingly competitive environment, the future viability of Clubs relies upon their ability to operate efficiently and in a manner consistent with accepted business practice. Club operations need to be professionally managed and financial performance maximised so that Club facilities are preserved and member benefits and community support sustained over time. Benchmarking plays a vital role in promoting efficiency by ensuring that Clubs have access to data that:

identifies performance gaps within Club operations;

highlights strengths and weaknesses within Club operations;



assists in developing business improvement strategies;

provides a platform for decision-making and performance improvement; and

encourages best practice.

4. MEASURING PROFITABILITY AND

OVERALL EFFICIENCY

The key indicator in assessing the financial position of a Club is profitability. The profitability of Clubs relates to their ability to cover their expenses and surpluses to further invest in facilities and services for the benefit of their members. The primary indicator of a Club’s profitability (and operating efficiency) is EBITDARD – earnings before interest, tax, depreciation, amortisation, rent and donations. From a benchmarking point of view, the only appropriate measure of profitability is a comparison of “bottom line” trading performance of each Club before expenditure on community support. EBITDARD is a valid indicator of profitability and efficiency for Clubs, irrespective of size, purpose or location. The retention and efficient use of revenues is one of the keys to a successful operation.

5. CORE TRADING ACTIVITIES

Clubs should benchmark as a minimum the following core trading activities:

bar;

food; and

gaming.

Minimum baseline benchmark key performance indicators for bar, food and gaming - KPIs:

Bar:

KPI Explanation

Revenue Total bar revenue as a % of total Club revenue

COGS Cost of goods sold as a % of total bar revenue

GP Gross profit as a % of total bar revenue

Wages Bar wages as a % of total bar revenue

Other Costs Other bar direct costs as a % of total bar revenue

Net Contribution

Net contribution as a % of total bar revenue

Food:

KPI Explanation

Revenue Total food revenue as a % of total Club revenue

COGS Cost of goods sold as a % of total food revenue

GP Gross profit as a % of total food revenue

Wages Food wages as a % of total food revenue

Other Costs Other food direct costs as a % of total food revenue

Net Contribution

Net contribution as a % of total food revenue

BENCHMARKING CLUB PERFORMANCE


Gaming (Departmental):

KPI Explanation

Revenue Total gaming revenue as a % of total Club revenue

Tax Gaming tax as a % of total gaming revenue

Wages Gaming wages as a % of total gaming revenue

Promotions Promotions as a % of total gaming revenue

Other Costs Other gaming direct costs as a % of total gaming revenue

Net Contribution

Net contribution as a % of total food revenue

Gaming (Product):

KPI Explanation

Average Turnover per Machine per Day – by Manufacturer

Self-explanatory

Average Turnover per Machine per Day – by Denomination

Self-explanatory

Average Profit per Machine per Day – by Manufacturer

Self-explanatory

Average Profit per Machine per Day – by Denomination

Self-explanatory

Machine Distribution – by Manufacturer

Reflects market share

Machine Distribution – by Denomination

Reflects market share

The KPI performance levels of each of these core activities should be measured and compared against benchmarks set by

industry benchmarking tools 27 or those published from time to time by ClubsNSW.

6. EXPENSES

Clubs should benchmark the following major overhead running cost items:

salaries and wages including on-costs (as a percentage of revenue);

advertising, entertainment, marketing and promotions;

repairs and maintenance;

printing, postage and stationary; and

energy costs.

KPI Explanation

Wages Non-departmental wages as a % of total Club revenue

On-costs On-costs as a % of total Club revenue

R&M Repairs and maintenance costs as a % of total Club revenue

Promotions Promotion costs as a % of total Club revenue

Advertising Advertising costs as a % of total Club revenue

Entertainment Entertainment costs as a % of total Club revenue

Energy Energy costs as a % of total Club revenue

PPS Postage, printing and stationary costs as a % of total Club revenue

Other costs Miscellaneous overhead costs as a % of total Club revenue

27

Club Data Online (CDOL).



7. CAPITAL EXPENDITURE

Capital expenditure, including reinvestment, is essential to both maintain the existing level of trade but also to, if appropriate, grow the business in the future. The hospitality industry constantly changes to meet consumer tastes and preferences. In the face of significant competitive pressure, Clubs that fail to reinvest in income-producing assets such as gaming machines or to adequately maintain or renovate bars, lounges and food service facilities, jeopardise their future financial well-being. As for all major expenditures, it is essential the investment in Club facilities be supported by appropriate research and analysis (including consultation with members). A comprehensive business case should be prepared and considered by the Club board and management. The business case analysis should include:

the financial implications of the investment, its costs and the capacity of the Club to pay the sum concerned from cash reserves or borrowings;

the likely impact on the business of the Club as a result of that expenditure; and

the return on investment from that expenditure through an analysis of incremental cash flows.

The following financial and balance sheet ratios should also be considered as part of the benchmarking process:

KPI / Ratios Explanation

Operating Cash Margin

Solvency Ratio

Cash Payments to Cash Receipts

Solvency Ratio

Current – Working Capital Ratio

Liquidity Ratio

Quick Ratio Liquidity Ratio

Debt Ratio Debt Performance Ratio

Interest Cover Ratio

Debt Performance Ratio

Gross Profit Margin

Profitability Ratio

Net Profit Margin Profitability Ratio

Stock Turnover Ratio

General Ratio

Debtors Turnover ratio

General Ratio

8. PRICES

Clubs should benchmark pricing levels for:

beverages;

food; and

membership.

9. COMMUNITY SUPPORT (GRANTS AND DONATIONS)

Clubs should benchmark both monetary and in-kind support they provide to the community. Categories of support include28: a) Community Welfare and Social

Services; b) Community Development;

28

This is not an exhaustive list.

BENCHMARKING CLUB PERFORMANCE


c) Community Health Services; and d) Employment Assistance Activities. The relevant benchmark of Club community support is the total value of cash and in-kind support as a proportion of operating surpluses/profit. For details on the types of community support provided by Clubs, please refer to the Guideline for Community Support.

10. COMMUNITY CONTRIBUTION

(EMPLOYMENT, SOCIAL AND LOCAL ECONOMY)

Clubs should benchmark the contribution they provide to the community from an employment, social & local economy perspective, including, but not limited to:

Number of people employed by the Club and associated wages and on-costs (i.e. superannuation);

Training costs for Club employees and community based training programs;

Number of local suppliers and service providers engaged and the Clubs financial contribution to the local economy;

Capital investment in community assets – parks, sporting grounds, recreational centres etc; and

Support of the performing arts in the local community (i.e. bands, musicians, singers) and the fees incurred by the Club to engage and support their services.

Best Practice Guideline: REMUNERATION OF CLUB EXECUTIVES


1. PURPOSE The purpose of this Guideline is to provide Clubs with information regarding the key principles and processes that should be followed when remunerating Club executives, including top executives. This includes CEOs/Secretary Managers and may also include senior and department managers.

2. DEFINITIONS ‘Remuneration’ means payment, reward or recompense for services rendered. This includes all monetary benefits such as salary, wages, leave entitlements, salary sacrifice arrangements, performance bonuses and/or incentives and other allowances and/or concessions, any Fringe Benefit Tax (FBT) paid on any part of the remuneration package, and any termination, severance or end of employment contract payments. ‘EBITDARD’ means earnings before interest, taxes, depreciation, amortisation, rent and donations.

3. EMPLOYMENT RELATED

DISCLOSURES The Registered Clubs Act 1976 requires that Clubs record and make available to members:

the number of top executives of the Club (if any) whose total remuneration for the reporting period (comprising salary, allowances and other benefits) falls within each successive $10,000 band commencing at $100,000;

details of any loan made during the reporting period to an employee of the Club if the amount of the loan (together with amount of any loan to the employee of the Club that has not been repaid) is more than $1,000 including the amount of the loan and interest, if any;

details of any contract approved during the reporting period under Section 41M of the Act; and

the name of any employee of the Club who the Club is aware is a close relative of a member of the governing body of the Club or of a top executive of the Club and the amount of the remuneration package paid to the employee.

4. DEFINING A TOP EXECUTIVE The definition of top executive has been clarified so that it applies only to those Club employees with clear managerial responsibilities. The definition captures the secretary of the Club, a person appointed under Section 14 of the Regulation as the manager of any premises of the Club, any person paid more than $100,000 involved in the general administration, liquor or gaming operations of a Club who is one of the five (5) highest paid employees. Top executives have additional disclosure under Part 4A of the Act.

5. CLUB AWARDS Most Club executives have their terms and conditions of employment determined and regulated by the Registered and Licensed

REMUNERATION OF CLUB EXECUTIVES


Clubs Award 2010. Generally, the award serves the Club industry well because it provides clear information and reference about work value, work standards, pay rates and terms and conditions of employment for Club managers in New South Wales.

6. THE ROLE OF THE BOARD OF

DIRECTORS Boards of Directors are ultimately responsible for determining the remuneration for Club executives and monitoring and reviewing performance. Boards of Directors must:

establish and consistently enforce, and update where necessary, an executive remuneration policy for their Clubs;

determine, agree and offer a remuneration package to the CEO/Secretary Manager;

consider the CEO/Secretary Manager’s recommendation(s) for the remuneration of other Club executives;

develop measurable key performance indicators (KPIs) and periodically review and assess (at least annually) the performance of the CEO/Secretary Manager against those KPIs to determine whether they are being met;

be aware and comply with any legislative requirements that pertain to executive remuneration; and

ensure that “value for money” is achieved.

7. CONTRACT OF EMPLOYMENT29

Club CEOs/Secretary Managers must have an employment contract approved by the Board of Directors that expressly states their terms and conditions of employment, their roles and responsibilities, and the classification level (and structure) of remuneration they will receive. A Club must not enter into an employment contract for the remuneration of a top executive unless the proposed contract has first been approved by the Board of Directors30.

8. EXECUTIVE REMUNERATION

COMMITTEE Clubs should establish an Executive Remuneration Committee (ERC). The ERC can oversee remuneration of Club executives and other key personnel such as senior and department managers. The ERC can only make recommendations to the Board of Directors on the Club’s remuneration policy and packages for the CEO/Secretary Manager and other Club executives. The ERC should:

develop, review and update (the latter only when necessary) the Club’s remuneration policy to ensure its contemporary relevance and that it adequately and satisfactorily rewards performance;

establish the remuneration packages for the CEO/Secretary Manager and other Club executives. An ERC can then make recommendations to the

29

The Club Managers (State) Award 2006 (NSW) NAPSA sets out the minimum terms and conditions of employment for club managers which includes remuneration.

30 See Section 41M of the Registered Clubs Act

1976 (NSW).



Board of Directors and seek their approval;

establish KPIs for the CEO/Secretary Manager. An ERC can then make recommendations to the Board of Directors and seek their approval;

consider the CEO/Secretary Manager’s recommendation(s) for the establishment of KPIs for other Club executives;

research and be informed about market rates of pay for executive remuneration; and

be aware and comply with any legislative requirements that pertain to executive remuneration.

Note: A majority of the Board of Directors must approve the remuneration of a CEO/Secretary Manager and other Club executives, not an ERC.

9. DETERMINING THE LEVEL OF

REMUNERATION Generally, there are five key factors in determining remuneration:

A consideration of the form of employment regulation;

The work value of the position;

The market rate of pay for a position of similar work value;

The performance of the person occupying the position; and

The capacity of the Club to pay, its business circumstances, and its dependence upon the person being employed.

Employment Regulation

Considering the form of employment regulation is the starting point when determining the remuneration for a CEO/Secretary Manager and any other

Club executives. This may involve consulting the Club Managers (State) Award 2006 (NSW) NAPSA, and may also necessitate seeking advice from ClubsNSW.

Work Value

To accurately identify the true work value of any Club executive position, the following steps need to be undertaken: Step 1: Identify all the duties, tasks and

responsibilities required of the position.

Step 2: Identify the level of complexity and difficulty associated with each duty, task and responsibility.

Step 3: Identify the essential and desirable skills, knowledge and expertise required of the position.

Step 4: Prepare a job or position description that incorporates the information gathered from Steps 1, 2 and 3.

Market Rate of Pay

A common way to determine the market rate of pay for a Club executive position is to compare the skills, knowledge and expertise required of the position with identical or similar positions in the Club industry and/or the broader labour market. This may be a difficult exercise, but is also a necessary one.

Performance

An important aspect of any remuneration package is to account for performance. Strong performance from a Club executive should be rewarded. The role of an ERC in this process is important and is outlined above.

Capacity to Pay

The business and financial circumstances of the Club are a critical consideration when determining remuneration. Boards of

REMUNERATION OF CLUB EXECUTIVES


Directors should have a clear and current awareness and understanding of the Club’s business and financial position before determining the remuneration of a CEO/Secretary Manager, or considering the CEO/Secretary Manager’s recommendation(s) for the remuneration of other Club executives.

10. REVIEW OF CLUB EXECUTIVE

PERFORMANCE The Board of Directors or an ERC should periodically (at least annually) review the performance of the CEO/Secretary Manager for remuneration purposes. The Board of Directors or an ERC can also, in conjunction with and on advice from the CEO/Secretary Manager, periodically (at least annually) review the performance of other Club executives. The performance of Club executives should be measured against quantitative financial benchmarks such as, but not limited to, Club profitability (measured by EBITDA or EBITDARD 31 and the levels of working capital. Performance should also be measured against qualitative benchmarks such as, but not limited to, vision and leadership, accomplishment of long-term strategic objectives, and development of staff and management. The criteria and KPIs against which a Club executive’s performance is measured should be clearly expressed in the contract of employment.

31

Earnings before interest, tax, depreciation, amortisation, rent and donations.

Best Practice Guideline: OVERSEAS TRAVEL


1. PURPOSE

This Guideline provides Clubs with information that will assist them in planning and justifying overseas travel by Directors, management or staff. It will also help to maximise the benefits of overseas travel to the Club.

2. DEFINITIONS “Overseas travel” means travel for Club-related purposes from Australia to an overseas country where travel and related costs (including expenses and allowances) are either fully or partially met by the Club, or where the costs of overseas travel for official duties are funded from other sources including suppliers (e.g. fee for service activities, full costs covered by a conference organiser, grants and other funds). “Inducement” means an offer of overseas travel or another offer of material value which is made to a Club employee or director by a supplier of product, whether that product is purchased by the Club or not and whether the supplier’s offer is accepted by the individual or not. It may be an inducement if the supplier offers ‘free’ or sponsored travel, but it will not be an inducement if the travel is in connection with or coordinated by a supplier and is paid for wholly by the Club.

3. GUIDING PRINCIPLE Club representatives sometimes travel in order to better understand and evaluate opportunities that may exist for the Club or to further their education. However Clubs

should exercise financial prudence, accountability and transparency particularly in relation to overseas travel, and at all times seek tangible benefits from it for the Club that are commensurate to the expense involved.

4. APPROVAL OF OVERSEAS TRAVEL Directors and managers should provide a written justification for any planned overseas travel that clearly sets out: a) the proposed travel itinerary;

b) the purpose and objectives of the travel;

c) expected benefits from the travel; and

d) the estimated cost including airfares and other travel costs, accommodation and living expenses, meal and other allowances and incidentals.

Overseas travel should only be approved if it is considered necessary in the pursuit of the Club’s objectives. In considering applications for overseas travel Boards should be satisfied that: a) the sites to be visited/investigated on

the trip are closely related to the individual’s area of responsibility. For example, travel associated with attending gambling sites could be undertaken by those Directors or managers with responsibility or oversight of that area of Club operations;

b) sites investigated are relevant to Club trading activities or planned capital works (such as renovations or extensions) or investment;

OVERSEAS TRAVEL


c) the travel is necessary to ensure that the Club and Directors exchange ideas with international operators, and take account of international developments and best practice in areas of high priority to the Club; so as to enhance the reputation, attractiveness and competitiveness of the Club as a business;

d) other avenues for obtaining the same information, knowledge or experience have been considered, that in order to properly evaluate a concept that is relevant and important to Club activities (i.e. one that has been successful overseas) Board or management representative(s) need to see it in operation. Having seen it, those representative(s) will be in a better position to evaluate and report on its merits; and

e) the frequency of overseas travel is within reasonable expectations, given the Club’s circumstances and resources.

All overseas travel should be planned and budgeted-for in accordance with the Club’s capacity to pay. Expenditure on overseas travel should be regarded as discretionary. All overseas travel applications should be considered and ultimately approved by the Board by way of a formal resolution recorded in the minutes of a board meeting.

5. TRAVEL EXPENSES Those representing their Club on overseas trips should ensure that their expenses are reasonable and justifiable. At all times economy should be exercised. Clubs should set and document appropriate limits for the following expenditures:

a) alternatives to business class airfares such as premium economy or economy should be considered, where appropriate and in accordance with the Club’s capacity to pay;

b) in general, travel and all other expenses for a partner should be at the person’s own expense, not the Club’s, though the person should be able to downgrade their airfare (e.g. from business to premium or economy) in order to take their partner;

c) accommodation should be at a standard equivalent to that used for domestic travel; and

d) meals and incidentals – a guide to appropriate rates is published annually by the ATO 32 in its ruling dealing with reasonable travelling allowance amounts.

6. OVERSEAS TRAVEL REPORTS

As a condition of official overseas travel, the Director or manager should provide a written report to the Board on return from an overseas trip. The following elements should be included in a report: a) dates of travel and places visited;

b) objectives of the trip and how those objectives were met or if they were not met then the reasons for this;

c) details of expenses incurred by the Club;

d) benefits to the Club and its members; and

e) recommendations and/or action plans arising from the overseas trip.

32

See http://law.ato.gov.au/atolaw/view.htm?Docid=TXD/TD201217/NAT/ATO/00001&PiT=99991231235958

http://law.ato.gov.au/atolaw/view.htm?Docid=TXD/TD201217/NAT/ATO/00001&PiT=99991231235958





7. INFORMING MEMBERS Section 18(2) of the Registered Clubs Regulation requires that Clubs make available to members the information of any overseas travel by a Club Director or employee in an official capacity including associated costs met by the Club. Clubs are required to display a notice on the Club’s premises and on the Club’s website advising how members can access such information; and members may view the information by way of written request to the Club. For further information on this subject refer to the Guideline for Financial Reporting.

8. OVERSEAS TRAVEL AS AN INDUCEMENT TO PURCHASE GOODS OR SERVICES

Inducements of overseas travel should not influence Club procurement decisions. Inducement for the purchase or provision of goods or services is regulated by section 43A of the Registered Clubs Act 1976. Section 43A(1) prohibits a person providing or offering to provide or causing to be provided or offered to a registered Club or any other person any benefit or advantage as the whole or a part of the consideration for the purchase by, or provision to, the Club of goods or services unless the benefit or advantage: a) is to be received by the Club and

comprises money or money’s worth (including any trade-ins) that is clearly set out in a written agreement for purchase or provision of the goods or services, or

b) is clearly set out in a written agreement and comprises reasonable training of a member of the staff of the Club in the operation or

maintenance of approved gaming machines.

Subsection (3) of section 43A provides that a Registered Club or other person is guilty of an offence if the Club or other person accepts or agrees to accept the benefit or advantage that is offered. The maximum penalty for each offence is $11,000.00. Suppliers who offer inducements such as overseas travel as part of the marketing of their products or services typically recover these costs through the final price paid by the Club for the product or service. There may also be a presumption by the supplier of future favourable purchasing decisions. Clubs whose directors or staff accept such inducements may be found not to have acted in the best interests of members due to a perceived or actual conflict of interest as well as being guilty of the criminal offence of breaching section 43A. In principle, overseas travel with suppliers must only be for genuine educational purposes, not an inducement to purchase products or services. The important criterion to be borne in mind is that the Club, as a whole, should gain (and be seen to gain) the benefit of the travel opportunity, rather than the individual undertaking the travel. This is essential to avoid giving rise to perceptions of conflicts of interest in respect of any subsequent purchase of goods or services from the supplier. Sponsored travel includes cases where transport, accommodation or living expenses are paid for or provided other than from the Club’s own funds or the Club representative's own resources. Acceptance of such travel may lead to the perception that the Club director or employee is favouring the organisation concerned or using their position with the Club to gain a personal benefit.

OVERSEAS TRAVEL


Clubs being offered ‘free’ overseas travel or other inducements by a supplier should request the supplier put the offer in writing to outline details of the offer and explain if, and how, it complies with legislative requirements of the Registered Clubs Act. Details of offers of sponsored travel should be referred to the full board for consideration before they are accepted and a record of decision, including the rationale for accepting the hospitality, recorded in the minutes of the meeting. When boards are considering details of any benefit or advantage, including sponsored travel from a third party, they need to be aware of section 43A(2) of the Registered Clubs Act which provides:

A person who provides, or offers to provide, or causes to be provided or offered, to a registered Club a benefit or advantage for use by a person, or by more than one person individually, is guilty of an offence unless: (a) the benefit or advantage is

openly and generally available to all Clubs or other persons or to those of a specified class or specified classes, and

(b) the benefit or advantage is predominantly educational and relates to a specific and genuine course of study, and

(c) the benefit or advantage would be of significant assistance to the Club, and

(d) the person making the offer does not, in making the offer or before a decision on the offer is made by the Club, select a person to benefit from the offer or make any representations in relation to, or take part in, the selection of such a person, and

(e) the person making the offer does not, if the offer is accepted, select

any person to receive the benefit or advantage, or take part in the selection of such a person, or make any representations in relation to the selection of such a person.

Once again, the maximum penalty is $11,000 for each offence. However, the offence in these circumstances, is committed by the person making the offer. However, the various conditions which must be met should act as a guideline for directors and senior management when considering sponsored travel from a third party. In the case of managers or other staff, it makes no difference if sponsored travel is undertaken during a period of leave. Overseas travel will not be considered an inducement if the travel is in connection with or coordinated by a supplier and is paid for wholly by the Club. For best practice, and in order to avoid an actual or perceived conflict of interest or being guilty of an offence arising from an inducement of overseas travel in connection with a major capital investment such travel should be approved by the board and paid wholly by the Club, regardless of whether the investment would have been made without the offer of an inducement. For further information about proper procurement processes Clubs should refer to the Guideline for the Procurement of Goods, Services and Major Capital Works.

9. EMPLOYMENT CONTRACTS AND OVERSEAS TRAVEL

Employment contracts for Club employees (including Senior Executives) may include

http://www.austlii.edu.au/au/legis/nsw/consol_act/rca1976173/s4.html#registered_club



an entitlement to education opportunities potentially delivered overseas. Clubs should ensure that any overseas trips are for educational/professional development purposes and in the interests of the Club. However, this entitlement should be subjected to analysis as detailed above and be regularly reviewed. For further guidance on remuneration policy, refer to the Guideline for Executive Remuneration.

Best Practice Guideline: BOARD OPERATION


1. PURPOSE An effectively operating Board is an essential component of an effective Club. Effective Boards are clear about their practices, their role and their results. This Guideline aims to assist Members who seek effective and efficient operation of their Board by:

describing a framework for effective Board functioning;

identifying best practice strategies for Board functioning; and

affirming individual Director responsibility.

2. DEFINITIONS ‘Business plan’ means any plan for the future administration of the Club (including strategic and operational plans) developed by senior management and approved by the Board. ‘Close associate’ means any family member, personal friend or business associate of a Director. ‘Material personal interest’ means the Director stands to personally benefit financially or in some other material way. ‘Board charter’ means an agreement that outlines the role, structure and responsibility of the Board.

3. GUIDING PRINCIPLES Boards should pursue the aims and purpose of their Club by actively ensuring that management and staff:

Make decisions that are consistent with the Club’s role/purpose and the interests of members;

Comply with any relevant legislative, industrial and administrative requirement and keep up to date with any changes;

Maintain adequate documentation to support any decisions made;

Treat each Club member and staff members with courtesy and sensitivity to their rights;

Provide all necessary and appropriate assistance to members of the Club;

Promote a culture of continuous professional development and training;

Strive to obtain value for Club money spent and avoid waste and extravagance in the use of Club resources;

Contribute to a safe, healthy and discrimination-free Club environment; and

Not take or seek to take improper advantage of any Club information gained in the course of their appointment (in the case of Directors) or employment (in the case of managers/staff).

The Board should have a clearly defined and expressed statement33 or equivalent expression of their aims and purpose as an organisation. This should be clearly communicated to members and stakeholders.

33

Normally, this is contained in the Club’s Constitution.



4. FUNCTIONS OF THE BOARD OF DIRECTORS

The Board of a Club is responsible to members for the overall governance and performance of the Club. The functions of the Board include the following:

Providing strategic direction to the Club by constructive engagement in the development, execution and modification of the Club’s strategy;

Appointing the Club manager and approving succession plans;

Monitoring the performance of the Club manager and approving senior management remuneration policies and practices;

Reporting to members and ensuring that all regulatory requirements are met;

Providing advice and counsel to management on a periodic and ad hoc basis, adding strategic value;

Ensuring appropriate compliance frameworks and controls are in place;

Approving policies governing the operations of the Club;

Monitoring financial results on an ongoing basis;

Ensuring the Board’s effectiveness by operating as a team;

Ensuring the Club’s business is conducted ethically and transparently; and

Overseeing strategic risk management.

5. BOARD COMPOSITION

To provide competent leadership and direction, Boards should contain, if available, an appropriate mix of skills from professions such as business, management,

law, accounting, public administration and marketing. Board make-up should be representative of the Club membership. For example, Clubs that have a large number of women in membership should actively encourage appropriately qualified women to seek directorship. Clubs should avail themselves of the services of the Club Directors Institute of ClubsNSW to provide training to prospective Board candidates from under-represented segments of the membership.

Boards should be of an optimum size34, according to the needs of the Club. Excessively large Boards tend to be inefficient and should be avoided. However, diversity on the Board is encouraged.

6. ETHICS

In accordance with legal and statutory requirements, Directors should:

Discharge their duties in good faith and act honestly, in the best interests of the Club, and with the level of skill and care agreed in their role expectations;

Act with required care and diligence, demonstrating commercial reasonableness in their decisions;

Declare any conflicts of interest35;

Act for the benefit of the Club at all times;

Not make improper use of information gained through their position as a

34 The optimum size of the Board is six Directors

plus Chair. 35 Consistent with the requirements of the

Registered Clubs Act 1976, a Director of a club who has a material personal interest in a matter that relates to the affairs of the club must as soon as practicable declare the nature of the interest at a meeting of the Board of Directors.

BOARD OPERATION


Director or otherwise take improper advantage of the position of Director;

Not allow personal interests, or the interests of any close associate, to conflict with the interests of the Club;

Make reasonable enquiries to ensure that the Club is operating efficiently, effectively and legally towards achieving its goals; and

Undertake diligent analysis of all proposals placed before the Board.

7. ROLE OF THE CHAIR

The Chairperson’s responsibilities include:

Providing appropriate leadership to the Board and the Club;

Facilitating Board discussions to ensure the core issues facing the Club are addressed;

Maintaining a regular dialogue and mentor relationship with the Club manager;

Monitoring Board performance; and

Guiding and promoting the on-going effectiveness and development of the Board and individual Directors.

8. ROLE OF THE CLUB MANAGER The Club manager is responsible to the Board for the overall management and performance of the Club in accordance with the strategy, plans and policies approved by the Board to achieve the agreed results. For more information on executive appointments, remuneration and evaluation refer to the Guideline for Remuneration of Club Executives.

9. CONDUCT OF BOARD MEETINGS Key criteria for the conduct of Board meetings are:

The Board should meet at least

monthly on previously determined dates and conduct special meetings at the request of the Chair;

The chair establishes the agenda for each Board meeting. Board members should be encouraged to suggest items for inclusion on the agenda;

The agenda for each meeting should be provided to the Directors in advance of the meeting together with written materials on certain matters to be presented for consideration. Management should endeavour to provide material that is concise and informative;

The agenda36 should, at a minimum, include:

minutes of the last meeting and business arising;

finance (including gaming machine operations);

Chairs’ report;

tabling of ClubsNSW Circulars; and

other business; and

Financial reports which accurately reflect the true financial position of the Club should be provided for each Board meeting.

10. CONFLICTS OF INTEREST If a Director has a real or potential material personal interest relating to Club procurement of goods and services and/or major capital works, the nature of that interest should be disclosed at the earliest possible meeting of the Board.

36 See appendix 1 for model Board Agenda.



11. CONFIDENTIALITY

Directors have a duty to question, request information, raise any issue which is of concern to them, fully canvas all aspects of any issue confronting the Club and cast their vote on any resolution according to their own judgement. Outside the boardroom, Directors should support the letter and spirit of Board decisions. Directors should keep confidential Board discussions, dialogue and decisions that are not publicly known. Confidential information received by a Director in the course of the exercise of directorial duties remains the property of the Club and it is improper to disclose it, or allow it to be disclosed, unless that disclosure has been properly authorised, or is required by law.

12. BOARD SUB-COMMITTEES The full Board is ultimately responsible for the conduct of a Club’s affairs. However, larger Clubs may opt for supervision of major functional areas to be handled by specialised Committees (e.g. audit and remuneration) of the Board while ensuring that the full Board remains ultimately responsible for the Committees’ decisions. It is important that all Committees should be established with clearly defined objectives, authorities, responsibilities and tenure and that they report regularly to the full Board. The Board should ensure that the structure of each Committee is suitable having regard to the Club’s size and business, the Board’s composition and individual Directors expertise.

13. SUPPORTING TEAMWORK AND DIVERSITY

Each financial year the Board should facilitate:

A review and modification of the Club’s strategic plan to ensure the Club’s aims and purpose are realised;

The agreement of role expectations for each Director that identifies what results each Director has committed to deliver to the Board;

Personal learning plans for each Director, agreed with the Chairperson, which identifies what and how new skills should be developed, based on the role expectations; and

The giving and receiving of performance feedback for Directors by their peers based on the agreed role expectations.

14. RELATIONSHIP BETWEEN BOARD AND MANAGEMENT

Club Directors decide what matters are delegated to management and should ensure that adequate controls are in place to oversee the operation of these delegated powers. Except in smaller Clubs with few paid staff where the use of volunteer staff is required, Directors should not participate in the day to day management of the Club. Agreements with suppliers, customers, employees, consultants, professional firms or other parties or organisations should be made by management unless such an authority is explicitly delegated by the Board to a Director, either individually or as a member of a Committee.

BOARD OPERATION


15. STRATEGIC PLANNING

A critical role of the Board is to ensure that the Club is pursuing an appropriate strategy in line with its aims and purpose. To achieve this, the Board should constructively engage with management concerning the development, execution and modification of the Club’s strategy. Management and the Board should agree on the processes used to develop the Club’s strategy and business plan. Each financial year management and the Board should discuss the substantive elements that are to be considered in the development and execution of the strategy. Management then prepares and proposes a written strategy for consideration and approval by Directors. The approved strategy forms the basis for the business plan, which is also prepared by management and considered and approved by the Board. In reviewing the strategy and business plan, Directors should consider implementation and timing issues and monitor on a continuing basis the execution of the strategy against milestones and targets set down in the business plan. The full Board should review and approve the strategic and business plans, including financial objectives and budgets.

16. BOARD CHARTER

The implementation of Board Charters for both Boards of Directors and Committees is becoming more commonplace to ensure that all Directors/Committee members are aware of their roles and responsibilities. A Board Charter endeavours to provide the framework for the Board to deliver best practice standards of corporate

governance in the execution of the responsibilities reserved for the Board. Management, in consultation with the Board should review and update the Board Charter annually, with all Directors required to review and ‘sign-on’ to the Charter following each election. 37

37

See Appendix 2 for model Board Charter.

Appendix 1: MODEL BOARD AGENDA


1. MINUTES

Monthly Board of Directors Meeting [date]

2. FINANCIAL REPORTS [DATE]

Complete profit and loss comparing actuals to budget

Cash Payments report

Director Benefits Report

ClubGRANTS Report

Bank Reconciliation

Cash at Bank

Statement that all Creditors have been paid in accordance with Club policy

3. COMPLIANCE REPORT

ATO Activity Statement has been paid

Payroll Tax has been paid

Superannuation contribution has been paid

Copies of Insurance and Workers Compensation payments (yearly)

Essential Services

WH&S Committee Report

4. CORRESPONDENCE (INCLUDING ALL CLUBSNSW CIRCULARS)

5. SECRETARY MANAGER’S REPORT

6. GAMING REPORT

Detailed listing to ensure compliant with legislation

7. NEW MEMBERS – APPROVAL

8. FUNCTIONS AUTHORITY – APPROVAL

9. CHAIR’S REPORT

10. CITATIONS

11. OTHER REPORTS

12. GENERAL BUSINESS

13. NEXT MEETING

Appendix 2: MODEL BOARD CHARTER


1. OVERVIEW AND PURPOSE OF THE CHARTER

The operations and activities of [Club name] and its subsidiaries are managed under the direction of the Board of Directors, in the best interest of the members as a whole. The Board is responsible for the business and affairs of [Club name], except for matters reserved for members in general meeting. The Board is responsible to the members of [Club name] for the direction and performance of the Club. The Board is governed by all applicable law, the Club Constitution and the Club Code of Practice and Best Practice Guidelines. The purpose of this Charter is to set out the functions, responsibilities and key protocols of the [Club name] Board and the basis of delegation of its authority to Board committees and members.

2. ROLE OF THE BOARD The Board has responsibility to Club members for the conduct of the affairs and activities of [Club name]. In carrying out its responsibilities, the Board undertakes to serve the interests of all [Club name] members, employees, other stakeholders and the broader community. Each Director of [Club name] will act in good faith in the best interests of [Club name] as a whole and collectively oversee and appraise the strategies, major policies, processes and performance of the company using care and diligence to ensure that [Club name)’s long-term sustainability is assured.

3. STRUCTURE AND COMPOSITION OF THE BOARD

The [Club name] Constitution provides for the election of [number of] directors made up of a [President/Chair, Vice President/Chair etc] and [insert] ordinary directors. The directors are elected [annually/biennially/triennially] to [one/two/three] year terms of office. Board elections are held pursuant to clause [clause number] of the Constitution. Each Director will hold office until the applicable Annual General Meeting and/or as determined by the Constitution. (Further information is available from paragraph 5 of the Best Practice Guideline for Board Operation).

4. BOARD RESPONSIBILITIES The Board is responsible to members for the overall governance and performance of the Club, for determining the strategic direction of the Club and monitoring Club management’s implementation of that strategy.

The Board:

Selects and appoints the Secretary Manager and identifies an appropriate succession plan;

Determines the Secretary Manager’s conditions of service, delegates responsibilities and monitors his/her performance against established objectives;

Approves senior management remuneration policies and practices;

Monitors financial outcomes and the integrity of reporting, particularly



approving annual budgets and longer-term strategic and business plans;

Sets specific limits of authority for management to commit to new expenditure, enter new contracts or acquire businesses without Board approval;

Approves acquisitions and disposals of businesses and investments above the delegated limits of authority;

Approves significant changes of key policies;

Monitor compliance with legislative requirements and ethical standards and reporting back to members on these issues;

Appoints any such Committees of the Board as may be appropriate to assist in the discharge of its responsibilities, determines their responsibilities and approves a charter for each Committee;

Ensures that the Club conforms with the principles and practices of economic, social and environmental sustainability and best practice wherever possible;

Ensures that the Club’s business is conducted ethically and transparently;

Oversees strategic risk management; and

Meets in accordance with the Constitution and By-Laws of the Club and any other relevant legislative requirements.

5. CLUB CONSTITUTION The Board is governed by the Constitution of [Club name]. This Charter supports the Constitution of [Club name]. The Constitution takes precedence in the event of inconsistency.

6. DELEGATIONS OF AUTHORITY AND COMMITTEES

To assist in the discharge of its responsibilities, the Board has delegated the following responsibilities to the Secretary Manager and Committees.

Secretary Manager:

The Board delegates the responsibility for the day to day operation and management of the Club’s business to the Secretary Manager;

A Director will not interfere with the day to day operation and management of [Club name], and will make all enquiries concerning employees, contractors or the operation of the Club to the Secretary Manager;

Management must report to the Board on a regular basis to maintain accountability and to inform the Board so that it can make its decisions in the best interests of [Club name] and the members as a whole;

Deals with attendance of management and invited experts at Board meetings; and

The Board will ensure that it retains its independence which may require independent expert advice from time to time.

(Further information is available from paragraph 14 of the Best Practice Guideline for Board Operation).

Board Committees:

The Board, in accordance with the Club Constitution, may form advisory and other Board Committees to assist in carrying out its responsibilities;

The Board will appoint the members of each Committee, including each Committee Chair who will be

BOARD OPERATION


responsible for governing the Committee and may allow for external expertise where appropriate;

The Board will establish Charters setting out matters relevant to the composition, responsibilities and administration of the Committees and other matters that the Board may consider appropriate; and

A Committee to which any powers have been delegated must exercise the powers delegated in accordance with the Charter for that Committee, as approved by the Board from time to time.

7. DIRECTORS’ DUTIES Directors must carry out their duties in compliance with all applicable law including the Corporations Act, [Club name] Constitution and By-Laws, the Club Code of Practice and Best Practice Guidelines and all Club policies and procedures. In discharging his/her duties, each Director must:

Exercise care and diligence;

Inform themselves about the subject matter of a decision to the extent they reasonably believe to be appropriate;

Act in good faith in the best interests of the Club;

Declare any material personal interest or pecuniary/financial interest they have in the affairs of the Club;

Not improperly use his/her position or misuse information of the Club;

Maintain Board confidentiality at all times;

Commit the time necessary to discharge effectively his/her role as a Director; and

Engage in ongoing skill development in relation to their role as Director.

(Further information is available from paragraph 6 of the Best Practice Guideline for Board Operation).

8. ROLE OF THE CHAIR The responsibilities of the Chair are principally to:

Lead the Board;

Chair Board and General Meetings of the Club competently, ethically and transparently and ensure Board effectiveness;

Ensure that general meetings are conducted efficiently and that members have adequate opportunity to express their views and obtain answers to their queries;

Liaise with the Secretary Manager to ensure that new Board members are briefed and have access to information on aspects of the Club’s operations;

Facilitating the effective contribution of all Directors;

Establish the agenda for Board meetings in consultation with the Secretary Manager;

Be the main point of contact and communication between the Board and the Secretary Manager, ensuring that the Board’s views are communicated clearly and accurately;

Lead the review of the Board’s performance and the review of the Secretary Manager’s performance, ensuring that the delegated authority of the Secretary Manager and expected key performance criteria for the Secretary Manager are clear;

Ensure that there is regular and effective evaluation of the Board’s performance;

Set a standard for Board members in terms of attendance at meetings and prior familiarity with Board Papers



distributed and issues to be raised; and

Be the media spokesperson for the Board where appropriate and represent the Club’s interests.

(Further information is available in paragraph 7 of the Best Practice Guideline for Board Operation).

9. ROLE OF THE SECRETARY MANAGER

The Secretary Manager is responsible for the day to day management of [Club name] in an efficient and effective manner. The Secretary Manager is to have a formal employment agreement describing his/her term of office, duties, rights and responsibilities and entitlements on termination. The role of the Secretary Manager includes but is not limited to:

Organising Board Meetings, Agendas, Board Papers etc;

Monitoring compliance with the Club Constitution and this Charter;

Advising the Board on compliance with meeting procedure (in line with paragraph 9 of the Best Practice Guideline for Board Operation); and

Preparing minutes of Board meetings, arranging approval of minutes and entering into minute book within one month of the meeting.

10. BOARD ATTENDANCE BY MANAGEMENT

In the interests of ensuring the full accountability and support of the Secretary Manager by the Board, the Secretary Manager (or in his/her absence the Acting Secretary Manager) is, in general, the only

member of management who attends Board meetings. However, the Secretary Manager at his/her discretion and in consultation with the Chair, may arrange for senior staff members to attend parts of Board meetings where he/she determines that there is benefit in relation to his/her providing clarification to the Board.

11. BOARD AND DIRECTOR MEETINGS Full Board meetings will occur at a frequency determined by the current Constitution of [Club name] and the Registered Clubs Act, which is generally at least once each month. Board Meetings are be conducted in accordance with the Club Constitution, standing orders and fair rules of debate. Sub-committee meetings will occur at a frequency determined by the current Constitution of [Club name] or at a frequency determined by the Board which is congruent with any requirement of the Constitution. (Further information is available from paragraph 9 of the Best Practice Guideline for Board Operation).

12. PROFESSIONAL DEVELOPMENT Prior to and after their election, each Director is to commit to ongoing education and professional skills development as determined by the Board, ClubsNSW or applicable law, and is subject to annual review. The Board will have access to resources and training specific to the Club Industry as offered by ClubsNSW and other providers.

BOARD OPERATION


13. CLUB CODE OF CONDUCT AND PROTOCOLS

The Board and Directors will be guided at all times by the Club Code of Practice as published by ClubsNSW and from time to time revised. Directors are bound by the principle of transparency and will at all times ensure that issues are discussed in open forums where the Board is able to openly evaluate strategies, ideas and suggestions.

14. REVIEW OF PERFORMANCE The Board will conduct regular reviews of its performance. The method of conducting each review and the extent of that review is for the Board to determine from time to time and in conjunction with the [Club name] Constitution and Club Code of Practice. The Chair or the Board may elect to be assisted by an external independent agency in undertaking the Review of Performance. The review of the Chair’s performance will also be conducted in accordance with this Charter.

15. REVIEW OF THE CHARTER The Board will regularly review this Charter and the Charters of Board Committees to ensure they remain consistent with the Board’s objectives and responsibilities and relevant standards of corporate governance.

16. PUBLICATION OF THE CHARTER This Charter will be made available to the Club’s members upon request and key features may be outlined in the [Club name] Annual Report.

17. AMENDMENT OF THE CHARTER This Charter has been adopted by the Board. Any amendment to this Charter can only be approved by the Board. The Secretary Manager is responsible for reviewing this Charter on an annual basis to ensure its continued compliance with legal requirements, corporate governance requirements applicable to the Club and the Club Code of Practice, and if necessary, suggesting amendments to the Charter for consideration by the Board.

Best Practice Guideline: FINANCIAL REPORTING


1. PURPOSE The purpose of this Guideline is to improve the accuracy and transparency of Club financial reporting. The guideline informs Clubs on their legal financial reporting obligations, and suggests ways of improving the flow of financial information to members.

2. GUIDING PRINCIPLES Financial reports should be prepared in accordance with Accounting Standards and all mandatory professional reporting requirements and the Corporations Act 2001. Reports should cover the Club and any other Club or entity it controls. To the extent possible, all Members should aspire to a common set of benchmarks for financial reporting that constitute industry best practice.

3. BACKGROUND The various Acts and accounting and auditing standards spell out the information that must be declared in a set of published financial accounts. Clubs that adhere to the provisions of legislation and standards will provide their members and other stakeholders with sufficient information in order to ascertain the financial performance of the Club as well as its financial viability. While there is a great deal of commonality among Clubs (e.g. revenues from bar sales, gaming machines, membership fees, etc) there is also a great deal of diversity. Apart from the fact that some Clubs may be RSLs, some bowling, some golf, some leagues,

some sporting and some ethnic, they often have differences that may affect their respective chart of accounts. This is compounded by the fact that some Clubs are large while others are small, and many are members of an amalgamated entity. Additionally, some may derive revenues from other non-Club business activities. This Guideline has been developed in the full knowledge that a single, industry-wide, standardised set of accounts will be difficult to achieve. Nevertheless, it is considered that an industry best practice benchmark be established as a model to which all Members should aspire.

4. REPORTS REQUIRED BY THE

REGISTERED CLUBS ACT 1976 AND REGULATIONS

Financial Reporting The financial reporting requirements for Clubs have been transferred from the Registered Clubs Act 1976 into Section 17 of the Registered Club Regulation 2009. Clubs must now prepare and make available to members on a quarterly basis:

profit and loss and trading accounts for the quarter; and

a balance sheet as at the end of the quarter.

These financial statements must be provided to the Club governing body and made available to members within 48 hours of them being adopted by the governing body.

Clubs must display a notice on the Club’s premises and website, in the form

FINANCIAL REPORTING


approved by the OLGR 38 , advising how members can access the information, with Clubs required to provide this information to any member or Director when requested in writing. Provision of Information to Members Reporting The provision of information to members reporting requirements are now contained in Section 18 of the Regulation. The information to be recorded is as follows: a) any disclosure, declaration or return

received by the Club under Division 2 of Part 4A of the Act during the reporting period;

b) the number of top executives of the Club (if any) whose total remuneration for the reporting period (comprising salary, allowances and other benefits) falls within each successive $10,000 band commencing at $100,000;

c) details (including the main purpose) of any overseas travel during the reporting period by a member of the governing body of the Club or an employee of the Club in the person’s capacity as a member of the governing body or employee, including the costs wholly or partly met by the Club for the member of the governing body, employee and any other person connected with any such travel;

d) details of any loan made during the reporting period to an employee of the Club if the amount of the loan (together with the amount of any other loan to the employee of the Club that has not been repaid) is more than $1,000, including the amount of the loan and the interest rate, if any;

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The notice must be printed in colour, not less than A4 size and displayed conspicuously on the main notice board. It may also be purchased from the Office of Liquor, Gaming and Racing (OLGR).

e) details of any contract approved during the reporting period under Section 41M of the Act;

f) the name of any employee of the Club who the Club is aware is a close relative of a member of the governing body of the Club or of a top executive of the Club and the amount of remuneration package paid to the employee;

g) details of any amount equal to or more than $30,000 paid by the Club during the reporting period to a particular consultant, including the name of the consultant and the nature of the services provided by the consultant;

h) the total amount paid by the Club during the reporting period to consultants (other than amount required to be included under paragraph (g));

i) details of any settlement made during the reporting period with a member of the governing body of the Club or an employee of the Club as a result of a legal dispute and the amount of any associated legal fees incurred by the member or employee that were or are to be paid by the Club, unless the disclosure of such information would be in breach of any confidentiality provision agreed to by the Club;

j) details of any legal fees (note referred to in paragraph (i)) paid by the Club on behalf of a member of the governing body of the Club or an employee of the Club;

k) the total amount of the profits (within the meaning of the Gaming Machine Tax Act 2001) from the operation of approved gaming machines in the Club during the gaming machine tax period relating to the reporting period; and

l) the amount applied by the Club during the gaming machine tax period to community development and support



under Part 4 of the Gaming Machine Tax Act 2001.

Clubs must record the above information in a form approved by the Director General39 and make the information available to members of the Club within four (4) months after the end of the reporting period to which the information relates. Clubs must display a notice on the Club’s premises and website, in the form approved by the Director General 40 , advising how members can access the information, with Clubs required to provide this information to any member or Director when requested in writing.

5. REPORTS REQUIRED BY THE CORPORATIONS ACT 2001

The Corporations Act 2001 requires that Clubs prepare audited financial reports on an annual basis.

6. CONCISE ACCOUNTS

Clubs are allowed to choose to provide their annual report to members by publishing the concise version on the Club website. However, Clubs that make that choice must also provide the report in hard copy (or, if offered by the Club, by fax or email), to members who choose to receive it this way. This is to be done free of charge. Clubs wishing to provide concise reports must write to all existing members advising

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The club must keep records concerning the Club’s management and administration in either electronic or hard copy form, so that it may be viewed by a member attending the Club who has made a written request to view such records.

40 The notice must be printed in colour, not less than A4 size and displayed conspicuously on the main notice board. It may also be purchased from the Office of Liquor, Gaming and Racing (OLGR).

them that the annual report will be accessible on the Club website, but allowing them to elect to receive the annual report separately either in hardcopy or (if offered by the Club), by fax or email. This is a once only requirement – it does not need to be done each year. Clubs still have to produce both a full annual report (comprising the financial, Directors’ and auditor’s reports) and a concise report.

7. ‘SUNDRY’ OR ‘MISCELLANEOUS’

EXPENSES Clubs should not in either full or concise financial accounts excessively group expenses. A limit should be placed on the value that can be accumulated under the sundry expenses category. The limit should be 5% of the total expenses generated by the business during the year.

8. AMALGAMATED CLUBS Members of individual Clubs within an amalgamated group may be interested in the performance of their particular venue. This is particularly likely when there are large differences in the geographical location of such amalgamated entities. The consolidated accounts should clearly spell out the operating profit or loss from each venue. At a minimum, an abridged version of trading as well as profit and loss accounts for each venue should be made available to members of individual Clubs.

Best Practice Guideline: COMMUNITY SUPPORT


1. PURPOSE

The purpose of this Guideline is to assist Clubs to meet their community support obligations, as set down in their Constitution, by helping them to identify, value and report (i.e. benchmark) the extent of their contribution to the community. Clubs with gaming revenues of $1 million-plus participate in the ClubGRANTS (formerly CDSE) Scheme and must comply with the requirements of that scheme. For more detail on ClubGRANTS visit www.Clubsnsw.com.au.

2. DEFINITIONS ‘‘Category 1’ means expenditure on specific community welfare and social services, community development, community health services and employment assistance activities.

‘Category 2’ means expenditure on Club’s core purpose activities and other community development and support services not included under Category 1.

‘Category 3’ means money paid to a state-wide funding pool for large scale projects associated with sport, health and community infrastructure.

‘ClubGRANTS is a state-wide initiative whereby Clubs provide financial support for projects and services that contribute to the wellbeing of their communities. Clubs that earn over $1 million annually in gaming machine revenue provide funding for community projects and services, and in turn receive an equivalent tax rebate.

‘Community support’ means both cash and ‘in kind’ contributions made by Clubs to community organisations and programs. ‘In-kind’ means non-monetary.

3. BACKGROUND Clubs exist to promote the interests of their members and the surrounding community. They achieve this by, among other things, building and maintaining facilities and local infrastructure and providing cash donations and in-kind support for charities and community groups. The most visible mechanism for community support is ClubGRANTS. However, Clubs that earn less than $1 million from gaming do not participate in ClubGRANTS; thus, the value of their community contributions, although significant, is not well understood. Even Clubs that do participate in ClubGRANTS often provide additional benefits to the community that fall outside the parameters of that scheme and go unaccounted-for. By better understanding the nature of their own community contributions, Clubs will be able to better understand and improve the effectiveness of the cash and in-kind support they provide.

4. GUIDING PRINCIPLE Clubs should meet their community support obligations (including ClubGRANTS) and maximise their financial commitment to, and support of,



community projects, consistent with the Club’s purpose.

5. CATEGORY 1 EXPENDITURE Eligible Category 1 expenditure is for projects and/or services that contribute to the welfare and broader social fabric of the local community, and are aimed at improving the living standards of low income and disadvantaged people. Community Welfare and Social Services

Family support;

Supported emergency or low cost accommodation;

Counselling services;

Childcare and child protection;

Aged, disability or youth services;

Veteran welfare services

Services to victims of natural or other disasters; and

Volunteer emergency services, such as surf life-saving and rural fire services.

Community Development

Neighbourhood centre activities;

Community education programs;

Youth drop-in facilities;

Community transport services;

Tenants’ services; and

State-wide or regional services developing social policies and providing advocacy for local community services.

Community Health Services

Early childhood health;

Child and family services;

Community nursing;

Therapy;

Community mental health services;

Health promotion initiatives;

Drug and alcohol services;

Palliative care/women’s health/ dental/disability services;

Aboriginal and Torres Strait Islander health services; and

Home and community care (HACC) services.

Funding for buildings and equipment for in-patient care may be recognised as Category 1 expenditure in certain limited circumstances, so long as the expenditure is identified by the ClubGRANTS Local Committee to be of considerable importance and value to the local community. Otherwise such grants will only be recognised as Category 2 expenditure. Funding for medical research is not eligible as Category 1 expenditure. Employment Assistance Activities

Employment placement services;

Group training;

Employment advocacy;

Community enterprises; and

Local job creation schemes.

6. CATEGORY 2 EXPENDITURE

Eligible Category 2 expenditure is that expenditure allocated to community development and support activities and projects not listed under Category 1. Category 2 expenditure has been expanded to include expenditure on:

a Club's core activities including

sport, returned servicemen's league/veteran welfare, golf course and bowling green maintenance including for wages paid to staff to carry out maintenance; and

payments to professional and semi professional sport, including the National Rugby League, with the

COMMUNITY SUPPORT


exception of monetary payments to professional or semi professional players and their coaches and managers.

However, there are a number of specific funding allocations that are disallowed under Category 2, as follows:

Professional entertainers and entertainment provided for Club patrons and used for the purpose of directly promoting activities associated with the trading operations of the Club;

Expenditure on a Club’s commercial activities or activities directly related to fulfilling its obligation under the legislative and licence requirements applying to its trading operations; and

Capital and related expenditure on Club facilities where the project is primarily commercial in nature, or related to the upgrading or enhancement of gaming facilities, or when the facility is operated on a profit basis.

This is not a full account of all Category 1 and Category 2 criteria and exceptions. Further information on Category 1 and Category 2 expenditure and a copy of the full ClubGRANTS Guidelines is available on the ClubsNSW website www.Clubsnsw.com.au

7. CATEGORY 3 EXPENDITURE

In 2011 the ClubGRANTS scheme was expanded with the development of the ClubGRANTS Category 3, a state-wide funding pool established to support the development of large scale sport, health and community infrastructure projects. Under Category 3, 0.4 per cent of a Club’s gaming profits over $1 million that would otherwise be paid in tax is paid into the ClubGRANTS Category 3 Fund.

Approximately $12 million will be available each year. The ClubGRANTS Category 3 Fund is managed by the Office of Liquor, Gaming & Racing (OLGR). The minimum funding that can be approved for a single project is $500,000 and the maximum is $2 million. The OLGR has published Guidelines that explain the application process and eligibility criteria for Category 3 funds. The Guidelines can be accessed at www.olgr.nsw.gov.au/ClubGRANTS Category3/. Registered Clubs are ineligible to apply for Category 3 funds. Additionally, projects that have sought funding under Categories 1 and 2 are also ineligible. The following organisations are eligible to apply:

A NSW not-for-profit organisation that provides facilities and services to the community;

Other incorporated not-for-profit entities such as sporting Clubs, charities, private schools, and community groups; and

A body established by legislation, such as a local government authority or university.

To be eligible, an applicant must either:

Own the land and the premises or

facility which is to be constructed or enhanced; or

Be a trustee having care, control and management of the land and the premises or facility;

Possess tenure for the premises or facility and have approval to undertake construction or enhancement; or



Intend to use the grant (if approved) to purchase land in order to develop a facility.

All applications must have relevant planning/building approvals granted or be in the process of obtaining approval.

8. TREATMENT OF EXPENDITURE

‘IN-KIND’

Category 1 expenditure ‘in-kind’ provided to the community is acceptable provided that claims for such expenditure are calculated at market rate, are properly documented and are eligible for Category 1 expenditure. ‘In-kind’ expenditure cannot exceed 20% of combined Category 1 and Category 2 ClubGRANTS. However, Clubs may apply to the Commissioner of the Office of Liquor, Gaming and Racing (OLGR) for exemptions to the 20% limit.

9. EXPENDITURE OUTSIDE OF NEW SOUTH WALES

Expenditure on ClubGRANTS outside of NSW is only recognised if it is made in respect of services provided to victims of natural or other disasters within Australia, to locally based activities that are of a genuine cross-border nature or to nationally operating organisations with a presence in NSW.

10. FUNDING DECISIONS The Selection Process Clubs should establish a fair, transparent and consistent process for managing funding allocations. The following questions should be answered before providing community support:

a) Has the Club supported this [project/program/cause] before? If so, has the recipient reported on the previously funded project?

b) Has it applied for funding from other registered Clubs?

c) Does the [project/program/cause] historically receive funding from a local Club in the area? If so, is continued funding vital for its viability?

d) Are other sources of funding available from Federal, State or Local government or other funding sources for this [project/program/cause]?

e) Is the [project/program/cause] based locally, regionally, state-wide or nationally? Projects outside NSW should not be funded.

f) Does the [project/program/cause] represent good “value for money”?

g) Does the [project/program/cause] duplicate existing services in the same area?

When receiving funding applications, Clubs should assess each application based on its merits, consistent with the ClubGRANTS guidelines; and give equal consideration to both new applications and to applications from organisations which have an established relationship with the Club and have received funding in previous years. For ClubGRANTS Clubs, Local Committee funding priorities should be taken into account. Conflicts of Interest Clubs should avoid a situation where funding decisions are influenced by the interests of Directors or management. Directors and managers must declare any conflict of interest in relation to the provision of funding to a particular organisation or group and withdraw from

COMMUNITY SUPPORT


the meeting during the discussion of any such matter. General When providing cash or in-kind support Clubs should be satisfied that: a) the form of support is consistent with

the aims and purpose of the Club as set out in the Constitution and By-laws;

b) the support will benefit the wider community; and

c) the support complements the work of other local bodies (Clubs, local government, churches, charities etc).

11. REPORTING

Reporting to members Clubs should make every attempt to publicise the programs, projects or services for which funding has been provided. Clubs should conduct an annual assessment of their community support activity, using the categories outlined in this Guideline. The results of the assessment should be reported to members, either as part of the annual report or separately. Regardless of the number of categories, or prescribed percentage allocations, it is essential that all expenditures and in-kind benefits are correctly identified, quantified and reported. Paragraph 4.10 of the ClubGRANTS Guidelines state that Clubs should make every attempt to maintain on a publicly-accessible website, a list of all programs, projects or services for which funding has been provided in the current and previous gaming machine tax year. The list should be updated twice a year.

The list should include, for every grant made:

The name of the benefiting organisation

The name of the program, project or service funded

The total amount of the grant

Whether the expenditure was Category 1 or Category 2

Whether the funding was in cash or in-kind

For in-kind expenditure, the nature and value of each type of expenditure

For Category 1 expenditure, the subcategory of expenditure, as listed in paragraph 2.1.Clubs should recommend that benefiting organisations list all ClubGRANTS funding grants received in their annual reports, and send copies of these to their local committee.

Reporting to the Office of Liquor, Gaming and Racing

Clubs claiming a tax deduction under ClubGRANTS must satisfy the OLGR that appropriate expenditure has been applied to Category 1 and Category 2 purposes. A standard electronic form has been developed for reporting this expenditure which is available from the OLGR website www.olgr.nsw.gov.au. The form must be completed by qualifying Clubs and submitted within 7 days of the end of the tax year (7 September of that year). Clubs participating in the ClubGRANTS scheme are required to keep funding reports from benefiting organisations for at least five (5) years in the event of later review of either the Club or Organisation by the Authority.



12. PARTICIPATION IN CLUBGRANTS LOCAL COMMITTEES

ClubGRANTS Clubs should: a) participate in the Local Committee

process, including attendance at meetings;

b) provide their Local Committee with details of each Category 1 funding project, including:

i. name of funding recipient;

ii. nature of project;

iii. amount allocated; and

iv. whether the project aligned with identified local community priorities;

c) inform their Local Committee of any pre-existing or long term commitments to organisations; and

d) obtain from the Local Committee a certificate of attendance.

Clubs’ participation in the Local Committee process requires more than simply attending meetings. Clubs should be open with information about past and future funding allocations, as well as playing an active role in identifying local priorities, agreeing on the process and criteria for reviewing applications, and then assessing applications received. It is recommended that Clubs allocate a minimum of 75% of Category 1 funds in accordance with the Local Committee’s recommendations.

13. QUALIFYING FOR THE MAXIMUM CLUBGRANTS DEDUCTION

To qualify for the gaming machine tax rebate of 2.25%, Clubs must contribute 0.75% of those funds to Category 1 purposes, with 1.1% to Category 2 purposes. Category 1 expenditure may be used to cover shortfalls in Category 2, but the reverse does not apply. A Category 3

contribution of 0.4% is automatically deducted along with a Club’s quarterly tax contribution. As a general rule, it is important that funding preference is not given to projects or services that can be readily assisted by an existing Government funding program. Clubs should be aware that any shortfall will be returned to the Government in the form of tax and that it is preferable to expend these monies on worthy local causes. Full details on the criteria for Category 1 and Category 2 and further information are available in the ClubGRANTS section of the ClubsNSW website www.Clubsnsw.com.au

14. HOW TO MAXIMISE, RECORD

AND PROMOTE CLUBS’ SOCIAL CONTRIBUTION

Recording and Promoting

Clubs should make every attempt to publicise the programs, projects or services for which funding or other support has been provided. Clubs should publish a list of benefitting organisations and projects funded in their annual reports, Club website and member newsletters, correspondence and magazines. Clubs should recommend that benefiting organisations list all ClubGRANTS and other funding grants received in their annual reports and other communications. Clubs should consider erecting signage and other promotional material throughout prominent locations in the Club, such as the entry, listing the successful recipients and the projects funded.

COMMUNITY SUPPORT


Where possible, Clubs should seek to promote and generate media interest in their social contribution though social media tools such as Twitter and Facebook, which allow Clubs to communicate with members and the public at little to no operational cost. Events

Clubs should consider holding events to promote a Club’s support for the community through ClubGRANTS and other funding, and to raise awareness of the Club's role in developing and supporting community organisations. Events to consider conducting include (but not exclusive to):

ClubGRANTS launch: At the beginning

of each ClubGRANTS year, Clubs should consider hosting an applicant information day, highlighting how the ClubGRANTS scheme works and how to apply. Clubs should seek to invite local media and previous recipients of funding to speak about their experience.

Cheque Presentations: Where possible, Clubs should seek to ask one or more of the funding recipients to speak about how the funding will be applied. Clubs should seek to invite Club staff, members of the general public, local media and respective local, State and Federal Members of Parliament.

Engaging with politicians in social activities reinforces to them the value of the Club Movement, the support Clubs provides to local organisations and the way Clubs enhance the lives of members

and the general community, as well as maximising the potential of photo opportunities. At every opportunity, Clubs should actively inform their local representatives of any good news stories regarding the

Club or the social contribution of the Industry generally. Media Releases In most cases, local media is genuinely interested in Clubs’ involvement with the community and is on the lookout for good stories that are happening in their local area. Therefore, Clubs should actively seek to build and maintain relationships with local media. Clubs should issue a media release that highlights the people who benefit from ClubGRANTS and underlines the community focus of the Club. This will reinforce a positive public image and help garner valuable coverage at little cost to the Club. Clubs should make it clear that the money came from the Club rather than from local or state government. The media release should include all the key information and where possible, a photo. A good media release will include the following information:

Who will benefit from the project(s)?

What is the aim of the project(s)?

How much funding is the Club(s) providing and how long will it last?

What is ClubGRANTS? (Use a definition which emphasises Clubs' community role)

Comment from Club President or Committee Chairperson

Comment from funding recipient(s)

Comment from Mayor or State MP

A contact name and telephone number for follow-up.

ClubsNSW can assist with the preparation of media releases.

Leveraging Support

ClubGRANTS and community support is a reciprocal relationship based on mutual trust, respect and common objectives.



Clubs should view benefiting organisations not as ‘grantees’, but as strategic partners. Therefore, Clubs should not be afraid to leverage their partnerships with benefiting organisations in order to promote and maximise the level of support provided to local community. When evaluating potential benefiting organisations, Clubs should determine whether the benefiting organisation and/or project:

Is aligned to the Club’s objectives or purpose, and those of the Club Industry;

has received previous funding and/or other support from the Club;

Is the most worthy recipient; and

has a structured organisation and assets so that they can actively promote and publicise the support provided by the Club.

Clubs should review previous recipients of funding and/or other support, and determine whether appropriate recognition and/or other support was received from the benefiting organisations in return for the Club’s social contribution.

Best Practice Guideline: COMPLAINTS HANDLING


1. PURPOSE

The purpose of this Guideline is to provide Clubs with information regarding the management of complaints.

2. DEFINITIONS

‘Complainant’ means an individual making a complaint. ‘Complaint’ is any expression of dissatisfaction with a product or service offered by a Club or any other matter relating to Club operations. ‘Systemic problem’ is failure(s) in the design, delivery, policies or procedures of a Club.

3. GENERAL PRINCIPLES An effective complaints handling system should:

improve the satisfaction of members, visitors and staff;

recognise and protect an individual’s right to complain;

be accessible, fair and efficient; and

enable the Club to channel feedback into improvements in its services to members.

Club management must be committed to resolving complaints in a fair and effective manner. This involves allocating the necessary resources to receiving, investigating and responding to complaints. It also means making the process visible and accessible to all. For example, some individuals may need help

putting their complaint in writing; the Club should be willing to offer that assistance. Complaints should be dealt with quickly and at no cost to the complainant. Throughout the process, complainants should be treated with courtesy and respect. Sometimes a complaint can signal a systemic problem with the way the Club operates. It is important that, when systemic problems are revealed, the necessary changes to policies and/or procedures be made to prevent the problem from recurring. Finally, there needs to be proper record keeping in regard to complaints handling.

4. COMPLAINT HANDLING PROCEDURES

These are the recommended steps for managing complaints:

The Club must make appropriate arrangements to ensure that complaints are received and recorded by a responsible person during normal office hours.

A complaint must be in writing and contain the particulars of the allegations upon which it is founded.

The Club must consider the complaint as soon as practicable after the complaint is received. It may:

require the complainant to provide further particulars of the complaint;



carry out an investigation into the complaint;

attempt to resolve the matter by conciliation;

decline to entertain the complaint because the matter is considered frivolous, vexatious or lacking in substance; or

conduct a hearing into the complaint41.

After conducting a hearing into a complaint against one or more staff members, if the Club finds the complaint substantiated, it may:

caution or reprimand the staff member who is the subject of the complaint;

require the staff member to undertake specified remedial training or instruction;

require the staff member to apologise to the complainant, if appropriate; or

undertake disciplinary measures in accordance with industrial relations legislation.

After conducting a hearing into a complaint that does not concern the conduct of one or more staff members, if the Club finds the complaint substantiated, it may:

offer an apology to the complainant;

offer financial compensation to the complainant, if appropriate and at the Club’s sole discretion;

with the agreement of the complainant, refer the matter to a third party for conciliation; or

undertake remedial measures to avoid recurrence of the circumstances giving rise to the complaint.

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For more information on conducting disciplinary hearings refer to the guideline for Conducting Disciplinary Proceedings.

5. RECORD OF COMPLAINTS

A record of complaints should be kept by Club management in written form and should include:

the date and time the complaint was received;

the name and address of the complainant;

the substance of the complaint; and

the substance and date of the Club’s response(s).

Each record should be retained by the Club for a period of one (1) year from the date of receipt of the complaint or for a longer period if the Club so chooses.

Best Practice Guideline: CONDUCTING DISCIPLINARY PROCEEDINGS


1. PURPOSE

The purpose of this Guideline is to inform Clubs on how to follow the correct procedure when conducting disciplinary proceedings involving their members.

2. BACKGROUND One of the most contentious areas in Club administration occurs when a member is cited to face the Board of Directors for a breach of the Club Rules. Disciplinary matters can be stressful for both the Board and the Club member involved. Increasingly, members are prepared to challenge the authority of the Board in conducting these proceedings. For their part, Boards face a difficult job in administering their duties in this area. However they have a responsibility to follow correct disciplinary procedures as if they do not, they can open the Club up to potential legal action.

3. NATURAL JUSTICE The fundamental principles which apply to disciplinary action by Clubs against members are the principles of natural justice, now often referred to as procedural fairness. One principle of natural justice is the accused member must be given full particulars of the charge, be given a full and fair opportunity to be heard and to present his or her case in relation to any charge and to call any witnesses before the Board makes any determination. Another principle of natural justice is the Directors who hear and determine the

charge must not be affected by either personal bias against the member or any issue of pre-determination of the charge. It is also important that the question of guilt or innocence is answered separately to the issue of penalty.

4. THE CLUB’S CONSTITUTION

Frequently, the Club’s Constitution may provide that a committee may take disciplinary action against a member and report that action and reasons for the action to the Board, together with a recommendation as to further action (if any) to be taken by the Board. Only the Board or a properly constituted disciplinary committee of the Board (if the Constitution permits) may take action involving a reprimand, suspension or expulsion of a member from the Club. The Board or disciplinary committee should not pre-determine whether or not the charge is substantiated, as to do so will mean that the Directors on the committee have made a determination on the alleged breach without reference to the principles of natural justice. This Guideline should be read in conjunction with the Club’s Constitution. If the Constitution imposes additional requirements to the Guideline, the Board should follow the additional requirements of the Constitution. For example, a Club’s Constitution may allow the Board to immediately suspend a member’s privileges until their disciplinary hearing is held. If, on the other hand the Constitution imposes fewer requirements than the Guideline, the Board should consider



using the Guideline to supplement the requirements of the Constitution.

5. CONDUCTING A DISCIPLINARY

HEARING

The disciplinary proceedings should be conducted in accordance with the requirements of the Club’s Constitution. The proceedings should be commenced with the sending of a ‘notice of charge’ letter to the member. Care should be taken to ensure the letter is not written in such a way as to pre-judge the outcome of the proceedings by implying guilt. A suggested form of disciplinary meeting letter is set out at the end of this Guideline, but please note it must be carefully adapted to your Club’s particular Constitution and requirements. The Chairman of the meeting hearing the disciplinary proceedings should have primary control of the disciplinary proceedings. Other members of the Board should only participate as necessary. If the member does not appear at the meeting after being given due notice of the meeting, then any written representation by the member which addresses any of the following points is to be taken as the response of the member on that point. In the absence of the member and any written representation, the Chairman should still be mindful of the procedure set out below. If the member does appear at the meeting, the member should be invited into the room and then advised that the following procedure will be followed in the conduct of the disciplinary proceeding:

The charge should be read to the member.

The member should be asked how he/she pleads.

If the member pleads not guilty then the Chairman should advise the member of the following conduct of the disciplinary proceedings:

The Club’s witnesses should be called to give their evidence or read a prepared statement.

The member can ask the witnesses any questions, relevant to the matter.

Once the Club’s witnesses are completed, the member can call any witness in his/her defence, including him or herself.

The member and his/her witnesses can be asked questions by the Chairman and the other Board members.

Once all the evidence is completed, the member should be asked if he or she wishes to make any summary statement.

The member should be requested to leave the room and the Board decides whether the charge is proved.

The member should be invited back and advised of the decision. If the member is not guilty, the matter is at an end.

If the member pleads guilty or if the Board finds the member guilty of the charge, the Chairman should advise the member of the range of penalties allowed under the Club’s Constitution and then invite the member to make any comment about which penalty should be imposed. The member should then be requested to leave the room and the Board then decides the penalty. The member should then be requested to return to the room to be advised of the penalty. The member should then be informed that the Board’s decision will be confirmed as soon as possible in writing to him/her (usually, the Constitution will not require the Board to give reasons for its decision).

CONDUCTING DISCIPLINARY PROCEEDINGS


6. RECORD KEEPING

A record of proceedings should be kept by Club management in written form and should include:

the date and time of the hearing;

the name and address of the member who is the subject of the hearing;

the names of Directors attending the hearing;

a copy of the notice of charge;

minutes of the proceedings;

the decision reached and actions to follow; and

a copy of the notice of the Board’s decision.

7. SUGGESTED DISCIPLINARY MEETING LETTER

The text on the following page is a suggested form of letter to a member to notify him/her of a disciplinary meeting. It is intended to provide an example of the level of detail which is required to adequately advise the member of the charge which he/she has to answer. Before using this suggested form it is important Clubs confirm the wording of the letter is consistent with their Constitution.



[On Club Letterhead] Insert Date PRIVATE AND CONFIDENTIAL TO BE OPENED BY ADDRESSEE ONLY Member’s name Membership number Address Dear Mr/Ms/Mrs NOTICE OF CHARGE The following charge pursuant to Rule [x] of the Constitution of [insert Club name] Club Limited (“the Club”) has been made against you: it is alleged that you have engaged in conduct prejudicial to the interests of the Club; and/or [INSERT AS APPROPRIATE] it is alleged that you have engaged in conduct which is unbecoming of a member; and/or [INSERT AS APPROPRIATE] it is alleged that you have engaged in conduct which may render you unfit for membership of the Club. [INSERT AS APPROPRIATE] PARTICULARS [Insert time, date and place details of the alleged offence including details as to who witnessed the alleged offence and what it is alleged the member did.] HEARING On [insert date] at [insert time] in the Boardroom of the Club at [insert address], the Board of Directors of the Club will meet to hear the charge and consider and if thought fit, pass any resolution pursuant to Rule [x] of the Constitution of the Club as is considered by the Board in the circumstances to be appropriate. Pursuant to Rule [x] of the Constitution, you are required to be present at the meeting of the Board at the time, date and place stated above. At that meeting and before any resolution is moved you will have the opportunity of giving in writing or orally any explanation or defence you may think fit in relation to this matter, to call any witnesses in your defence and, if found guilty, before any resolution imposing any penalty is passed you will be given the opportunity of addressing the Board on that penalty. You may also submit to the Board any representations in writing regarding the charge in advance of the meeting for the Board’s consideration. Pursuant to Rule [x] of the Constitution, the Board has the power at the meeting to reprimand you, suspend you from all privileges of membership of the Club for such period as it thinks fit, expel you from membership of the Club or accept your resignation as a member of the Club.

CONDUCTING DISCIPLINARY PROCEEDINGS


If you do not attend the meeting of the Board at the date, time and place stated in paragraph 2 of this Notice, the Board may hear and determine the charges in your absence and pass such resolution as it considers fit pursuant to Rule [x] of the Constitution. Pursuant to Rule [x] of the Constitution, the Board has determined that you be immediately suspended from all privileges of membership until the meeting of the Board referred to in paragraph 2 of this Notice. For your information, a copy of Rule [x] of the Constitution is enclosed. [Signed] Chief Executive Officer / Secretary Manager

Best Practice Guideline: CONDUCT OF BOARD ELECTIONS


1. PURPOSE

This Guideline assists Clubs in conducting fair and open elections for Boards of Directors. The Guideline must be read in conjunction with the Club’s Constitution.

2. CLUB CONSTITUTIONS AND BY-LAWS

Elections are to be conducted according to the Club’s Constitution and any By-laws passed by the Board. If the Club’s Constitution or By-laws do not provide clear rules for conducting elections then they should be updated and amended to do so.

3. RETURNING OFFICER

The role of a returning officer is to conduct, in its entirety, the election for the Board of Directors. Broadly speaking, this role includes:

preparing the notice inviting nominations;

ensuring the notice is published;

receiving nominations;

acceptance of nominations and declaring formal acceptance when nominations close;

conducting the draw for positions on the ballot paper;

drafting and printing ballot papers;

distributing ballot papers to eligible members;

counting ballot papers; and

providing the result to the Club.

A returning officer should not be a candidate for any position being contested in an election. A returning officer cannot be seen to have any affiliation with or show support to any candidate or group of candidates. The integrity of an election relies on the ability and complete impartiality of the returning officer. The returning officer may or may not be a member of the Club but should not be an employee of the Club.42

4. POWERS OF THE RETURNING OFFICER

In conducting elections, the power and role of the returning officer includes:

The returning officer fulfils a critical function in ensuring a fair and transparent election process for all

42

Clubs with more than 10,000 members will be required to have the election of the Club’s governing body conducted by a person or body approved by the Director General. Clubs with 10,000 members or less have the option of using an external person/body to conduct their elections. It is recommended however that they also use an external person/body. Pursuant to Section 30(1)(a2) of the Registered Clubs Act 1976, the Director General approves the following persons/bodies to conduct elections for Clubs with more than 10,000 members: a. Employee or a person authorised or

approved by the Australian Electoral Commission to be a returning officer;

b. Secretary, or Top Executive of a Club within 50km of the Club and with more than 10,000 members;

c. Solicitor not currently acting for the Club; or d. Accountant not currently acting for the

Club.

CONDUCT OF BOARD ELECTIONS


candidates in accordance with the Club’s Constitution and By-Laws.

The decisions of the returning officer should be accepted by the Board and management of the Club unless there is some clearly stated reason to the contrary.

The returning officer should be consulted on any discrepancy or concern raised about the election process.

If the returning officer raises a concern about the manner or conduct of the election or candidates then these concerns should be addressed by the Club.

5. ELECTION TIMETABLE

Subject to the Club’s Constitution and By-laws for Club elections:

there should be a period of at least two weeks but generally not more than four weeks between the date nominations are invited and the close of nominations;

the close of roll of members entitled to vote should be no later than the time set for the close of nominations;

there should be a period of at least two weeks between the close of nominations and the commencement of the voting period for the AGM if voting is at the AGM;

the days and times for voting should be convenient to members and should ensure that as far as practicable, members are given adequate opportunity to vote;

where ballot papers are posted to members, there should be a period of about 21 days between posting

to members and return of ballot papers; and

if the Club’s Constitution does not permit the above guidelines to be given effect, the Club should consider reviewing its Constitution.

6. NOTICE OF ELECTION BY RETURNING OFFICER

Subject to the requirements of the Club’s Constitution, an election notice should be:

prominently displayed on the Club noticeboards;

posted or e-mailed to all members; and

advertised in a newspaper.

The notice should:

state that an election is to be held and identify and provide contact details for the returning officer;

set the time and date for the close of the roll of eligible members;

invite nominations, listing the positions to be contested;

clearly set out any requirements or qualifications required under the Constitution to be eligible to contest any position;

advise where nomination forms may be obtained;

specify the place where nominations are to be lodged;

fix the time and date for the close of nominations; and

advise the day(s) and time(s) for voting; or if a postal ballot, when ballot papers will be posted and when and where they are to be returned; or if voting is at the AGM,



the time, date and location of the meeting.

7. NOMINATIONS

Before nomination Clubs should make available to all candidates the Future Director’s information kit that can be obtained from ClubsNSW.

General A nomination form should require completion of the following information:

the full name, residential address, contact details (home or business phone/fax/email/ mobile phone number) and membership number of the candidate;

the position or positions for which the candidate is standing;

the candidate’s written consent to the nomination;

the full names, residential address, membership number and signatures of the required number of eligible nominators; and

the place and time by which to lodge nominations.

Statutory declaration on the form provided by ClubsNSW (every director standing for election or re-election must fill in a statutory declaration)

If the returning officer is of the opinion that there is an anomaly in a nomination, such that it may require the returning officer to reject the nomination, the returning officer should, as soon as practicable after receiving the nomination, contact the candidate and advise that the anomaly

should be rectified before the time for close of nominations. Unless there are exceptional circumstances the returning officer cannot accept a nomination after the time and date fixed for the close of nominations. Withdrawal of a Nomination

A candidate who has been nominated in an election should be permitted to withdraw that nomination, but only in writing addressed to the returning officer, provided it is received by the returning officer before the close of nominations. Certification of a Nomination For the purpose of enabling the returning officer to form an opinion as to the eligibility of a candidate and the candidate’s nominators/proposers, the returning officer should require the CEO of the Club to furnish him/her with such information regarding the candidate and nominators/proposers as the returning officer may specify. The CEO of the Club should provide the required information, in writing, as soon as practicable after the request is made and certainly before nominations close.

8. UNCONTESTED ELECTIONS If, when nominations close, the number of persons who have been duly nominated as candidates for a particular position does not exceed the number to be elected to a position, each of those persons is elected. Any positions remaining unfilled should be filled according to the Club’s Constitution.



9. CONTESTED ELECTIONS If, by the close of nominations, the number of persons who have been nominated as candidates for a position or positions exceeds the number of persons to be elected, then a ballot must be held for the position(s). Candidate Profiles

The following applies if candidates are permitted to provide information (profiles) about themselves, which would be made available to members:

Profiles should be submitted to the returning officer, in an approved format, at any time before the close of nominations;

The returning officer should compile and present the profiles in a manner agreed with the Club prior to the commencement of the election;

If it is considered that any information provided by a candidate is not appropriate; is false or misleading; or exceeds a stipulated word limit, the returning officer may, take action to omit or rectify the information, or reduce the length of the information, as the case requires;

Where voting is conducted at the Club, the profiles should be displayed throughout the voting period, and for a postal ballot, posted with the ballot paper. Alternatively, they could be included in the Club’s journal or annual report; and

The profiles should be displayed in the same order as the candidates on the ballot paper. Where photographs are included, all photographs should be the same size and ideally, current Directors

should not be shown wearing Director’s apparel.

10. DELIVERY OF ROLL OF ELIGIBLE VOTERS TO THE RETURNING OFFICER

As soon as practicable after the close of nominations, the returning officer should receive a roll of eligible voting members certified to that effect by the CEO. The roll should show, in alphabetical order and consecutively numbered, the full surname, given names, residential address and membership number of each member entitled to vote. If the election is to be conducted by post, corresponding address details supplied as labels or on disk (or other means as agreed between the Club and the returning officer) should be supplied to the returning officer at the same time. Candidates are entitled to a copy of the roll in order to pursue their candidature.

11. ORDER OF CANDIDATES ON BALLOT-PAPERS

A returning officer should not conduct a draw for positions on the ballot paper without at least one independent witness present. Ideally, candidates or their representatives should be present. The time and place for the conduct of the draw should have been adequately advertised. Where a Club’s Constitution contains any particular requirements as to the manner or order candidates are to appear on the ballot paper, the returning officer must comply with those requirements.



Otherwise, the returning officer, as soon as possible after the close of nominations, should conduct a ballot to determine the order of candidates on the ballot-paper. Where there are separate positions, a separate draw is conducted for each position. Such a ballot could be conducted in the following manner, which is consistent with Parliamentary elections:

on identical slips of paper show each candidate’s name as it will appear on the ballot paper;

enclose the slips in separate, identical containers, seal each container and deposit all the containers in a ballot-box and fasten the ballot box;

rotate the ballot-box and allow any other person present to do the same;

unfasten the ballot-box and take out a container. Announce and record the name of the candidate whose name is on the slip taken from the first container. Repeat the process until all containers have been withdrawn and all names recorded; and

sign the record and ask someone else to sign as well.

All candidates should be formally advised of the result of the draw.

12. FORM OF BALLOT-PAPERS Separate ballot papers can be prepared for each position, or several positions can be included on a single ballot paper. The returning officer should make this decision in consultation with the CEO. Where there are multiple positions on one ballot paper (e.g. President, Vice President, Treasurer, Committee) each

position should be shown separately and in order of seniority. The returning officer is responsible for printing the ballot-papers. This could be done “in house” or by a commercial printer, however, security is paramount. A certificate should be issued and signed by the returning officer, acknowledging the exact number of ballot papers printed. They should be securely stored at all times. The ballot papers are:

to show the position(s) being contested;

to show the names of the candidates contesting each position (in the order prescribed by the ballot or some other way if so prescribed by the Club’s Constitution);

to distinguish names from each other where a similarity in the names of two or more candidates is likely to cause confusion;

to give the candidates preferred use of name where possible. For example, candidate may prefer Bill for William or Jim for James but nicknames are not acceptable;

to provide clear and concise direction as to the manner in which the vote is to be recorded, having regard to the system of voting required by the Constitution; and

where the ballot is conducted by post to provide instructions on how the ballot paper is to be returned to the returning officer and the date for the close of the ballot.



13. ADVICE TO MEMBERS AND CANDIDATES

The returning officer should ensure that a list of the candidates and the office for which they have nominated, along with other information such as the days and hours of voting, availability of postal voting, name and contact phone number of the returning officer are displayed on the Club’s noticeboards. This information may also appear in the Club’s journal. The returning officer should write to all candidates following the close of nominations providing them with a copy of the ballot paper draw, the arrangements for voting, the method of voting, information regarding the appointment of scrutineers, the day and time of counting the votes and any other information as the returning officer determines.

14. VOTING Voting options are as follows (note: in accordance with Section 30(1)(d) of the Registered Clubs Act 1976 there is no proxy voting). Attendance Voting at the Club

Voting takes place at the Club during the days and times as advertised. A member wishing to vote should produce his/her membership card and have his/her name marked off the roll. The member should record acceptance of his/her ballot paper by listing their membership number and signature on an attendance sheet. This then becomes a daily and continuing record of ballot papers issued.

If the Club’s membership card does not contain photo identification the member should be asked to produce another form of photo identification. If photo identification is not available then another form/s of identification should be produced to satisfy the returning officer/polling official of the identity of the person. The returning officer/polling official should initial the ballot paper before handing it to the member who, having voted, should place the completed ballot-paper in a locked ballot box. Ballot papers should not be numbered as this compromises the confidentiality of the vote. If a member makes a mistake when voting, a replacement ballot paper can be given in exchange for the spoilt one. Members should not be allowed to take their ballot paper from the voting area and then return to cast their vote as this may cause the validity of the ballot paper to be in jeopardy. Candidates should not assist persons as to how to complete their ballot papers. Members who require assistance should obtain assistance from the returning officer or polling official. At some Clubs voting may take place at more than one location. As members may attend both premises, there arises the opportunity for a person to vote at both locations. While procedural checks would identify any instance of this after the ballot had closed, it would be too late to guarantee the integrity and correctness of the result. Some possible alternatives are:

amend the hours of voting so that voting is not concurrent at two locations. This would allow a single



roll to be used. Sufficient time would have to be allowed to open voting at the 2nd location, using the same roll; and

require members to place their ballot papers in an envelope, and complete a declaration on the envelope before placing it in the ballot box. It would then be possible to isolate and reject any envelopes should someone have voted more than once.

This situation should of course, be addressed and resolved prior to the start of the election process and candidates advised of procedures.

Postal Voting

The returning officer should, as soon as practical after the printing of the ballot papers, send by post to each person included on the roll:

a ballot paper (or papers) initialled by the returning officer, containing the directions for voting and for return of the ballot paper;

an envelope addressed to the returning officer with spaces on the back for the member to print their name and address, and a space for the member’s signature. If considered necessary, the member’s membership number may also be required. (An inner “ballot paper only” envelope may also be provided if considered necessary); and

if applicable, candidate profiles.

The envelope containing the completed ballot paper is to be received by the returning officer prior to the close of the ballot. It can be posted or delivered.

On receipt of an envelope, the returning officer must, if satisfied that a person of that name is included on the roll for the election, accept the ballot paper in the envelope without opening the envelope and make a mark on the roll to indicate that the person has voted. If the returning officer is not satisfied that a person of that name is included on the roll, or if the person’s name and signature does not appear on the envelope, it should be rejected and the envelope not opened. Envelopes received by the returning officer after the date for the close of the ballot should be rejected and remain unopened. Combination of Attendance Voting and Postal Voting

The same procedures outlined above for attendance voting are to be followed. However, where a member is unable to attend the Club during the hours of voting he/she may apply in writing to the returning officer for a postal ballot paper. The returning officer should mark the roll to identify that a postal vote has been issued to the member. The same procedures for postal voting as outlined above are followed. Voting at the AGM

Some members (and employees) may be entitled to attend the AGM and vote on general matters, but are not entitled to vote in the election of the Board of Directors. The CEO, when preparing a list of members entitled to attend the AGM should prepare a separate roll of



members entitled to vote in the election of the Board of Directors. The returning officer should initial the ballot paper before handing it to the member who, having voted, should place the completed ballot paper in the locked ballot box. Clubs with Multiple Premises

Members of Clubs with multiple premises (including amalgamated Clubs), regardless of their location, must be given a reasonable opportunity to participate in the election process at the premises they usually patronise. If it is impracticable for this to occur because of the small number of persons participating in voting at a particular set of premises then a postal vote should be offered.

15. INCENTIVES TO VOTE Incentives to vote before or during an election period are not desirable. For example, free drinks or free or discounted meal vouchers. It is, however, customary to provide some reasonable free refreshments and/or food after the conclusion of an Annual General Meeting.

16. SECURITY OF THE BALLOT The returning officer must at all times ensure the security of the returned postal vote envelopes and the ballot papers completed at an attendance ballot. The unused ballot papers should be securely stored by the returning officer, preferably in a separate ballot box.

17. ‘HOW TO VOTE’ MATERIAL While candidates are normally entitled to post out ‘how to vote’ material to members in order to pursue their candidature, the distribution of “how to vote” material on Club premises is subject to any restrictions specified in the Club’s Constitution/By-laws. Generally it is recommended that Clubs do not allow the distribution of “how to vote” material on Club premises. Enforcement of any restrictions on the distribution of “how to vote” material on the Club’s premises should be the responsibility of Club management. Clubs should also ensure that neither incumbent Board members nor other particular candidates in Board elections are given any special treatment or promotion in Club publications or on the Club premises over other candidates. Examples include particular candidates being promoted in a President’s message in the Annual Report or promotional material being authorised by the Board for particular candidates on the Club’s premises. How to vote material should not contain any defamatory statements and should clearly state on the material who authorised the material.

18. SCRUTINY AND COUNTING At the close of the ballot (postal ballot) the returning officer is to open each envelope which has been determined as acceptable, extract the ballot paper (without unfolding it) and place it in a ballot box. In an attendance ballot, the ballot papers should remain in the locked ballot box up to the close of the ballot. The returning officer will then remove the ballot papers from the



ballot box, examine each ballot paper for formality and conduct the count. The ballot is to be counted in order of seniority. Any candidate elected to a higher position will be excluded from subsequent ballots. In the event that two or more candidates have an equal number of votes and one has to be excluded or one has to be elected, unless the Constitution/By-laws provide a means of resolution of a tie other than by “a draw from a hat” the returning officer will conduct a draw.

19. INFORMAL BALLOT PAPERS A ballot paper is generally considered to be informal if it:

has not been completed in accordance with the directions on it; or

has not been initialled by the returning officer or the polling official; or

contains a mark or writing which, in the returning officer’s opinion, would enable the elector to be identified, for example, roll number, name.

Before starting the count, the returning officer should be perfectly clear on the criteria for informality and should ensure that scrutineers observing the count on behalf of candidates have a clear understanding. The returning officer’s decision on the formality/informality of a ballot paper should be regarded as final.

20. PERSONS PRESENT AT SCRUTINY AND COUNT

The returning officer, polling officials, and scrutineers appointed on behalf of candidates are entitled to be present during the scrutiny of envelopes, issuing of ballot papers, and the counting of the ballot papers. A scrutineer is a person appointed by the candidate to observe the process on his/her behalf. A scrutineer is therefore not entitled to assist the returning officer in the counting of ballot papers. A candidate may not act as a scrutineer in any of the ballots being contested. Subject to the requirements of the Club’s Constitution a scrutineer need not be a member of the Club. The Club solicitor or auditor for example could act as a scrutineer.

21. RESULT OF ELECTION Once the result of the election has been determined, the returning officer should advise the CEO of the Club of the result in writing, including:

(in the case of a postal ballot) the number of envelopes rejected and the reason for the rejection;

the number of votes received by each candidate;

the number of informal votes; and

the total number of votes cast.

Once the result has been announced, a copy of the result should be placed on the Club noticeboard.

22. RETENTION OF MATERIALS All materials (roll of electors, ballot papers, etc) are to be kept by the



returning officer for one month prior to being destroyed. This is in case there is any challenge by a candidate concerning the result of the election. After the election result is declared at the Annual General Meeting a resolution should be sought from the members to destroy the ballot papers after one month.