The better question is one of what happens now? Because although Coorey was first elected as a director of Canterbury League Club Limited in March 2012 he was re-elected, by the club’s voting members, at its annual general meeting conducted on April 22 this year. Five days later, and strictly in compliance with the club’s constitution, the club’s seven directors elected Coorey as president. It’s uncontested that these same serious allegations of Coorey’s supposedly odious behaviour were definitely pinballing around inside the Bulldogs biosphere as early as February 2020. Those allegations were then independently investigated, without consequence.
Clause 58 (z) of the club’s constitution mandates that the seven directors of the club shall elect a president during a meeting held no later than five days after the date that the whole board is elected. The power to elect (*I’ll come back to this) the president lies solely with the club’s board.
Now here’s the crux: If those seven directors did properly elect Coorey as chairman on April 27, as was subsequently announced by the club by written notice to its members, then how? This election occurred two months after allegations about Coorey first surfaced. What did those directors know on April 27, and when did they first know it?
These are crucial questions, because notwithstanding what’s transpired this week with these directors supposedly leaning heavily on Coorey to stand aside, it’s plainly beyond their power to remove the president.
If no further developments have eventuated since April 27, how could there now be any contemplation of removing him? What is different now?
Canterbury League Club Limited is what’s known as a public company limited by guarantee. All but about 1000 of the club’s members have voting rights. Curiously, the ultimate holding company is Canterbury Bankstown Bulldogs Rugby League Club Limited – the entity which holds the Bulldogs’ NRL licence, and not the other way round.
The football club has the perpetual right to nominate four of those seven directors of the leagues club. What that means, is that the thousands of rank and file members of the leagues club have free rein to nominate candidates for a minority of board positions. One suspects this is a cause of unending angst.
Public companies have a number of peculiar features of relevance to this present situation. First, section 203E of the Corporations Act mandates that the directors of public companies cannot resolve to jettison a fellow director, or purport to require that a fellow director vacate his or her office.
Second, under section 203D of the Act, the forced removal from office of a director of a public company is the sole and exclusive domain of the company’s members. A simple majority of voting members passing such a resolution at a validly-convened meeting, at which a quorum is present, is sufficient.
The takeaway is that, even if the directors of the leagues club can reverse the decision consciously made a little over four months ago to elect George Coorey as president, those same directors most certainly cannot remove him altogether from the board.
Which then leaves this important but vexed question: can the directors, if they are so minded, reverse their decision to elect Coorey as their president and chairman? Otherwise, the next elections are due in 2022. At the club’s board meeting last Wednesday, it certainly seems the directors have thus tried.
To this end, the Corporations Act is roundly silent on what boards of public companies do about electing chairpersons. Rules regarding these matters are to be included in a company’s constitutional document, if anywhere. And on this question, the constitution of the leagues club either fails, or purposely shields the president from any shift to remove him or her mid-term. Whereas the constitution expressly provides for how the president is elected; the same document is positively silent on any provision governing circumstances in which the board vote to replace the president mid-term.
Contrastingly, the president expressly enjoys the right to chair every meeting of the members and every meeting of the directors and is also included on every subcommittee of the leagues club. These are important observations, and especially so in circumstances where the club’s constitution does also definitely provide for the president having a second and deciding vote that is exercisable to resolve any deadlock situation at board level, and in any general meeting of the members.
The leagues club’s constitution operates effectively as a contract between the directors and the club, club and member, and between members. It is an unquestionally brave move exceptionally open to legal challenge for the other directors of the Leagues Club to attempt to remove Coorey as president (or as a director), or even lean on him to ‘step aside’. They simply have no such power.
Instead, any decisions remain the exclusive domain of the thousands of voting members. The exception might be if Coorey was ever disciplined under the club’s constitution for conduct unbecoming, with his club membership revoked (because a director of a registered club must be a member). But that outcome is hypothetical.
And thus I reiterate this essential question: what did the directors know, as at April 27, and when did they first know it? That’s the crux of this conundrum.
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Darren Kane is a sports columnist for The Sydney Morning Herald.