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Susan Crago, Chief Governance & Risk Officer and Company Secretary
Last week, RAA held a member information session about the Governance changes we’re proposing to strengthen RAA’s future.
Along with our President and Chairman Kathy Gramp, Chief Executive Officer Nick Reade and General Manager of Community & Corporate Affairs Emily Perry – it was a great opportunity to connect with members.
We had some constructive two-way conversations with members about the governance changes we’ve proposed.
Members raised a number of issues, including the importance of our ongoing status as a member-based organisation and their role in our governance.
As a member-based organisation, we encourage members to take an active role in RAA’s corporate governance and vote on the resolutions we’re proposing.
What are the changes we’re asking members to consider?
The Governance changes we’re proposing will strengthen RAA’s future.
Since 2021, we’ve been taking steps to modernise your RAA so we can deliver the best services and products – and the greatest value – for members well into the future.
This year, we’re asking members to support us as we take the next step in this journey.
We’re asking eligible members to vote in favour of modernising RAA by:
Ultimately, these changes will result in better governance.
At the forum we spoke with members about what that better governance looks like.
RAA has outgrown the Associations Incorporation Act, under which we currently operate.
Given RAA’s size, complexity and diversity as an organisation, we’re better suited to operate as a Company Limited by Guarantee under the Corporations Act – which is also supported by the Commissioner of Consumer and Business Services.
In fact, RAA already has three businesses under this legislation including RAA Insurance Ltd, RAA Insurance Holdings Ltd and RAA Innovation Pty Ltd.
As such, it makes sense to align all of our operations under the Corporations Act which will also make reporting processes more efficient.
It would also bring us in line with our sister motoring clubs including RACV in Victoria, RACQ in Queensland, NRMA in NSW and RACT in Tasmania.
They’re not the only ones – other leading not-for-profits and mutual organisations have made this change, including RSPCA Australia, Royal Guide Dogs Australia and the South Australian Cricket Association.
Under the proposed changes, the Australian Securities and Investments Commission (ASIC) will become our regulator, which is best-practice for an organisation like RAA.
We’d also be able to access a broader range of funding options, not currently available to us.
This includes the ability to issue a type of financial instrument known as a Mutual Capital Instrument (MCI) – which are only available to mutual entities under the Corporations Act.
MCIs give mutual entities another way to raise funds, strengthening our financial standing and enabling us to bring greater value to our members.
We don’t have any immediate plans to issue these financial instruments – and they wouldn’t affect our status as a member-owned organisation – however it’s still important to understand the flexibility they could give us in the future and that’s why we’ve included the relevant provisions in the new proposed constitution.
At the forum we also touched on the proposed increase to the Director’s maximum remuneration pool – the second resolution we’re asking members to vote on.
We’ve benchmarked the proposed increase against other similar organisations based on an independent, expert report, and you can read more about that on the RAA website.
It’s imperative we appropriately compensate Directors for their time, skills and expertise to ensure we attract and retain talented professionals to lead RAA into the future.
What do these proposed changes mean for members?
At the forum we reassured members that these changes won’t change the way they interact with us day-to-day.
They also won’t change RAA’s overarching purpose – to be better for members, better for our community.
Nor will they change our status as a member-based organisation or our membership categories.
In fact, member voting rights and the protection of RAA’s status as a member-based organisation will be strengthened under these proposed changes.
The changes that members will see are very minor – like small terminology changes.
Another important but minor change is that in a Company Limited by Guarantee, members have ‘limited liability’ in the very unlikely scenario where the company is wound up.
This is a nominal amount – only $1 – and will be enshrined in our constitution but rest assured, we’ve been around for more than 120 years, and we plan to be here for at least another 120!
We’re encouraging members to take the time to read the materials and have their say in RAA’s future.
Voting remains open until 5 November online and in hard copy and members can, of course, vote at the AGM on 11 November.
If you were unable to attend the member forum and want to find out more about the changes or have your say and vote, visit Annual General Meeting – How you can attend | RAA
Susan Crago, Chief Governance & Risk Officer and Company Secretary