ACS loses major court battle over irregular vote
7 January 2020
ANALYSIS The Australian Computer Society, which prefers to be known as simply ACS, is still a computer society. Late last year it attempted to become a company limited by guarantee, a structure often used by charitable and not-for-profit organisations, but to do so it needed a 75% vote in favour at a Special General Meeting.
It held the meeting and won – by a single vote. Just 747 of ACS’s more than 10,000 full members voted. Now the Federal Court has declared that vote to be invalid, and the process starts all over again. The results were challenged by those who voted against the change, and a court found against the ACS, in a damning judgement.
That judgement, handed down on 23 December in the shadow of Christmas, found that the meeting and the resolution it passed were invalid, on the basis that ACS members had not been adequately informed of the proposed changes, and that there were significant irregularities in how the meeting was held and in the voting procedure.
ACS has accepted the criticism and has subsequently apologised to its members. The two parties will meet again in February to work out the best way forward.
It is an extraordinary tale, and one which still has a long way to play out. There is a lot at stake. The ACS is awash with cash, with $25 million in liquid assets. Its annual revenues exceed $35 million, largely from two sources - international members and IT accreditation. The number of overseas members significantly outnumbers Australian professional members, and ACS has a government endorsed monopoly on accreditation for IT skills for computer professionals working in Australia on visas.
Many IT professionals belong to ACS because it is seen to be the right thing to do, but their numbers are declining even as the industry is growing. Overseas members join because it is seen as a type of accreditation. Many people believe that the organisation is no longer adequately performing its primary task of representing Australia’s computer professionals.
In many ways the current shenanigans can be seen as a battle for the soul of ACS. Traditionalists opposed to the change want it to remain a professional society for individuals, while those advocating a transition to a new structure want it to be more representative of the industry. They say that the change is necessary to keep up with the demands of the modern world.
ACS management, as might be expected, strongly supports the change. The two key protagonists are CEO Andrew Johnson and President Yohan Ramasundara. The CEO holds a salaried position and runs ACS day-to-day, while the president is elected by the members for a two-year term.
Those opposing the changes are led by Canberra-based academic and consultant Roger Clarke, a fellow of the ACS and widely known within the IT community. His supporters include many senior members and fellows of ACS.
ACS’s role in the Australian IT industry has long been the subject of debate. Founded as a federation of existing state bodies in 1967, it as for most of its existence been primarily an organisation representing computer professionals. The move to a company limited by guarantee would mean members would become shareholders, which the critics say would diminish their role.
Membership has at times been restricted to those with academic qualifications in IT, but this requirement has been relaxed in recent years. It has long been criticised as being overly representative of the academic IT fraternity, and not fully embracing the commercial world. Many vendors dismiss it as irrelevant.
The unsuccessful attempt to turn it into a company limited by guarantee is in many ways a symptom of the ongoing debate over the role of ACS. There are sound arguments on both sides, each of which has said it wants what is best for members and for the industry. There is a touch of arrogance all round.
The ham-fisted way in which the change was attempted has now led to a judge’s ruling that the two sides talk to each other in a "case management" exercise. We can only hope, the sake of ACS members and for the industry as a whole, that a compromise is reached and that ACS will evolve into an organisation respected across the industry. Both sides have expressed to iTWire their willingness to compromise, but the gap may be too wide.
iTWire will follow and report on subsequent developments closely.
For those who came in late, a brief chronology:
7 December 2018
The ACS National Congress unanimously endorses a proposal that the organisation should transition from an incorporated association to a company limited by guarantee. It says the proposal was endorsed by all elected members of all ACS state and territory branches – nearly 200 people. The proposal is not communicated to ACS members.
15 May 2019
The National Congress endorses significant governance changes to help ease the transition from society to company.
25 June 2019
ACS publicly announces its intention to make the transition, in an article in its InformationAge online publication. It argues that the change is necessary to be “contemporary and relevant, and at the forefront of thinking in relation to emerging technology and the new economy.
"We need to ensure our organisational design and governance frameworks are fit for purpose, so that ACS delivers agility in a changing operating environment, and that we are best placed to deliver on the Strategy.” The ‘Strategy’ is a reference to the ACS five year plan, announced in 2017, to modernise.
3 July 2019
The ACS sends an email to some members outlining the changes and announcing a Special General Meeting to vote on them. The email is not sent to the many members who had previously opted out of receiving marketing material from ACS, effectively disenfranchising them. The limited nature of the distribution and of the announcement itself, which contained hyperlinks to documents rather than full details the changes, is to become one of the bones of contention in the subsequent court case.
11 October 2019
A group opposed to the transition, led by well-known Canberra academic and consultant, and ACS Fellow, Roger Clarke begins a campaign to encourage members to vote against the motion. It argues that the change would “destroy the ACS as a professional society, and to substitute for it an industry association and/or a marketing corporation.The resolution would remove the last vestiges of member influence over the organisation's strategy.”
Clarke's campaign gains 163 proxy and 23 in-person votes against the motion.
25 October 2019
The Special General Meeting is held in Sydney. Just 161 members attend the meeting, many of them armed with proxy votes. Roger Clarke travels to Sydney from Canberra for the vote. The meeting takes 90 minutes, with short two-minute statements but no questions allowed.
The proxies mean that there are 747 votes on the motion, which requires a 75% majority to pass.. The motion is passed by a single vote (561 for to 186 against), with two proxy votes against disallowed on what were subsequently ruled to be invalid grounds. Had those votes been allowed, the motion would have been lost.
12 November 2019
Roger Clarke launches a crowdfunding page on gofundme to finance action against the vote. “This may be achieved by negotiation, or mediation, but it may be necessary to get court orders to overturn the resolution.” It raises $14,223.
14 November 2019
The ACS refuses to negotiate and Roger Clarke initiates an action against the vote in the Federal Court in Canberra.
12 December 2019
The case is heard under Justice Wigney. The hearing takes a full day, with barristers employed by both sides.
23 December 2019
Justice Wigney hands down his judgement. He finds against the ACS on all counts, setting aside the results of the vote and awarding costs against the ACS. His 79 page judgement is extremely critical of ACS’s behaviour, detailing the irregularities in how the meeting was called and whether proxies should have been allowed. He was also critical of the conduct of the meeting. “Plainly a decision had been taken before the meeting to curtail discussion and debate.”
The judgement call for a “case management hearing in February 2020 for the purpose of considering what, if any, orders or directions should be made for the convening of a general meeting of the Society. To that end, the parties should confer and jointly a range for the matter to be listed on a mutually convenient date in February 2020.”
31 December 2019
The ACS issues a statement saying that in light of the court judgement it will review its plans to transition to a company structure. “We are naturally disappointed. No process is ever perfect, and for a not-for-profit membership body we have shown an exhaustive effort to keep all members involved in the consultation processes, and to participate in the resolution process. That said, we respect the Court’s decision.”
6 January 2020
The ACS sends a contrite mea culpa email to all members, apologising for its shortcomings in announcing and executing the Special General Meeting.
“It is clear there were a number of shortcomings identified in our processes, and for that we sincerely apologise. Where did we go wrong? At a high level:
- The notice of proposed alteration to the Rules and Objects was not correctly constructed.
- The notice of proposed alteration to the Rules and Objects was not correctly distributed.
- Some proxies were not correctly treated, and this was material to the outcome.
- The General Meeting was not run correctly.”
To be continued …