REVIEW OF THE AUSIMM CHARTER AND BY-LAWS

REVIEW OF THE AUSIMM CHARTER AND BY-LAWS Preliminary Recommendations and Issues for Further Consultation Discussion paper, published June 2016 BACKGROUND During 2014, the AusIMM Board undertook a review of its own operations. That review recommended the amendment of several By-Laws provisions relating to aspects of Board operations and the appointment of Board members and the President. In October 2014, the Board determined to establish a review taskforce of senior AusIMM members to undertake a comprehensive review the AusIMM Charter and By-Laws and make recommendations to modernise and reform AusIMM s constitution documentation. The review taskforce appointed by the AusIMM Board consists of: Dr Peter Lilly (former President 2006) Chair Alice Clark (former President 2011 2012) Deputy Chair Peter McCarthy (former President 2007 2008). Key activities of the review taskforce to date have included: Conducting a workshop as part of AusIMM Congress 2015 to identify priority issues and options for consideration within the review. Releasing a discussion paper that sought feedback from all AusIMM members (published October 2015, comments requested by January 2016). Commissioning expert advice from legal and governance advisors who have assisted other organisations incorporated by Charter to review and reform their constitutions. Commissioning a discussion paper on options the AusIMM Board s structure, composition and operation from Geoff Carter, Managing Director of Strategic Governance Group Pty Ltd. A significant focus on the review during AusIMM Congress 2016, including discussion of most of the preliminary recommendations set out in this paper and discussion of the options for the AusIMM Board and President outlined in the discussion paper developed by Geoff Carter. This document outlines the initial recommendations of the review taskforce and highlights those issues that will need further consideration before a recommendation can be presented to the AusIMM Board and AusIMM members. Comment on this discussion paper is now invited from all AusIMM members. Members are also invited to review and comment on the Board Structure, Composition and Operation discussion paper developed by Geoff Carter and released in parallel with this paper. MAKING A SUBMISSION TO THE REVIEW TASKFORCE Members are invited to make a submission to the taskforce. A template for submissions is available from www.ausimm.com.au/ by-laws, although members may choose to make their submission in different formats if desired. Feel free to make a submission on all topics, or just on one or two issues of specific interest to you. The review taskforce requests that submissions include clear and succinct explanation of the reasons for any changes you propose. All submissions should be emailed to policy@ausimm.com.au by close of business Friday 15 July 2016. Any inquiries about the opportunity to make submissions should be emailed to policy@ausimm.com.au. The Australasian Institute of Mining & Metallurgy ARBN: 052 181 174 ABN: 59 836 002 494 Ground Floor, 204 Lygon Street, Carlton, Victoria Australia 3053 Phone: +61 3 9658 6100 Fax: +61 3 9662 3662 Website: www.ausimm.com Postal Address: PO Box 660, Carlton South, Victoria Australia 3053 1

HEADLINE DECISIONS There are a number of headline decisions that set the scene for the remainder of the review project. These decisions set the direction of the review in many ways by their consequences. They are set out in the discussion below. Mode of incorporation Chartered corporation versus company limited by guarantee There is no question that an organisation of AusIMM s scale, complexity and nature must be incorporated. There are two viable options for AusIMM s method of incorporation: 1. Chartered corporation (seeking to retain incorporation via Royal Charter). 2. Company limited by guarantee (under the Corporations Act Australia). The review taskforce has sought advice regarding the two options, and it is summarised in Table 1. The table above outlines the key considerations in choosing the preferred method of incorporation for the Institute in the future. The review taskforce recommends seeking to retain Chartered corporation status, in particular in the light of the significant costs and potential for disruption of AusIMM s activities involved in seeking to move to become a company limited by guarantee incorporation. Such a change would require that the current Chartered corporation be wound up, and its assets transferred to a new company limited by guarantee. This process would have a range of procedural impacts including that all contracts entered into by the previous chartered corporation would terminate and need to be re-established by the new corporate entity. Recommendation 1: AusIMM should seek to retain Chartered corporation status. In considering the two options for method of incorporation, the review taskforce was aware that the previous attempt to modernise AusIMM s Charter in 2007 had lapsed due to an inability to obtain the approval of the Governors-General of New Zealand and Australia. The reasons for this failure are still not entirely clear, but a key consideration in this review is whether the recommended reforms will be able to be successfully implemented. The review taskforce has received advice from the New Zealand Department of Prime Minister and Cabinet that there are no impediments Table 1 Summary of incorporation options. Advantages Disadvantages Change procedures Company limited by guarantee This is the more common (and therefore better understood) mode of incorporation. Approval of Governors-General is not required for amendment to the Institute s constitution. The current Chartered Corporation would need to be wound up and a new legal entity established. AusIMM is a complex organisation with many operational contracts. There would be considerable costs involved in managing this transition. The new company would need to register as an overseas company in New Zealand under the Companies Act 1993 (NZ). It would need to lodge all amendments to its constitution and changes to its directors and their details with the NZ Companies Office, and file an annual return with that office. Approval would need to be granted by the Governors- General to surrender the current Charter and transition to a new constitution for a company limited by guarantee. Future amendments to the company constitution could only be made by special resolution, which require over 75% of the members voting at a general meeting to vote in favour. Under the Corporations Act, the register of members of the company limited by guarantee would be open to public inspection and copying. Further, members would be entitled to appoint non-members as their proxy. Comments The directors duties in the Corporations Act (Ss. 180 190B) apply to the directors of AusIMM regardless of the mode of incorporation. Chartered corporation Chartered corporations are considerably less regulated than companies limited by guarantee: meaning a chartered corporation has much more flexibility in determining its structure, and the form and content of its constituent documents than a company limited by guarantee. The risk that some members (members with antimonarchist sentiments or those living beyond Australasia) might see incorporation by Royal Charter as a regressive link to the Commonwealth monarchy. Approval of Governors-General is required to make any amendment to the Institute s constitution. Amendments to the Charter require the support of a majority (over 50%) of voting members, and then obtaining the endorsement of the relevant Governors- General. Chartered Corporations are required to have community benefit as a central organisational purpose. The directors duties in the Corporations Act (Ss. 180 190B) apply to the directors of AusIMM regardless of the mode of incorporation. 2

to a request to amend or repeal the current Charter being considered and granted by the Governor General of New Zealand. The Governor General of Australia has recently approved Charter amendments for other organisations, so there is no reason to expect that there would be any impediment to an AusIMM amendment (or repeal) request being considered and granted in Australia and New Zealand. This does not mean that the process of seeking approval from the Governors-General of Australia and New Zealand will be either quick or easy. We should anticipate that seeking such approvals will take many months and will require considerable attention to ensure that AusIMM effectively communicates its requests and supports their passage through the approval process of the two national governments to the respective Governor General. As far as we have been able to tell, AusIMM appears to be unique in its status as a Chartered corporation holding a single Charter granted in parallel by both New Zealand and Australia. Purpose, objects and scope of the Institute A key role of the Institute s constitution is to clearly articulate its purpose, objects and scope of professional disciplines embraced by the Institute. Feedback from members confirms a desire that the purpose and objects of the institute are: Clearly and concisely articulated Focused on the pursuit and development of best practice in professionalism Encompassing of all professionals working in the minerals sectors. In addition to the points above, if the Institute seeks to retain Chartered corporation status then the purpose and objects must reflect community benefit being at the heart of the AusIMM s reason for existence. Some feedback from members to date has argued the primary focus of the Institute should be benefiting members rather than the community. Other feedback has argued a focus on community benefit through professionalism in the mining sector is appropriate and has been the case since the institute was granted its current Charter in 1955. The recently amended Charter of Engineers Australia sets out the following: 3.1 The purpose of Engineers Australia is to advance the science and practice of engineering for the benefit of the community. 3.2 Engineers Australia will achieve its purpose by: (a) educating its members and the community; (b) facilitating the exchange of ideas and information; (c) encouraging the development of knowledge and competency; (d) setting and maintaining high professional standards for its members; and (e) informing community leaders and decision-makers. This issue was the subject of a workshop during the 2016 AusIMM Congress. That workshop did not have the time to comprehensively consider and carefully draft a purpose statement, however the common themes in the workshop s outputs provides some useful guidance regarding the key concepts that need to be captured in the new constitution. Six draft options generated during that Congress workshop are presented here: 1. AusIMM s purpose is to advance knowledge and its application in the resources sector so as to sustainably support society s needs 2. AusIMM s purpose is to benefit the community through the encouragement and enhancement of best professional practice throughout the minerals industry 3. AusIMM s purpose is to advance science through education, advocacy and ethical practices of mineral professions to benefit our communities and the world 4. AusIMM s purpose is to promote professional excellence in the minerals industries for the achievement of a sustainable contribution to society 5. AusIMM s purpose is to benefit the global community through the advancement of sustainable, ethical and innovative professional practice within the minerals industry 6. AusIMM s purpose is to advance the science of mining and development of professional members and to engage the community for a better understanding of the mining industry. Member comments on these options and alternative suggestions for a description of the Institute s purpose and objects are welcome. Some preliminary thoughts regarding the way the objects of the Institute might be described are set out here for members to consider and comment on: The Institute will achieve its purpose by: Encouraging the development of knowledge, competency and exemplary professionalism in all aspects of the minerals industries; Facilitating the development and communication of sciences relevant to the minerals industries; Facilitating the development and communication of other academic disciplines relevant to the minerals industries; Facilitating the exchange of ideas and information, and contributing to community understanding of the minerals industries; AusIMM members effectively and ethically carrying out their professional and business activities; Effective management of AusIMM s business practices and membership issues. Recommendation 2: AusIMM s Purpose and Objects should concisely state that the Institute exists to benefit the community through exemplary professionalism in all aspects of the minerals industries. Issue for further consultation 1: Members suggestions regarding revised AusIMM Purpose and Objects statements are invited as part of comments on this discussion paper. Structure of AusIMM s constitution documents Member feedback to the Charter and By-Laws review taskforce has universally endorsed the suggestion that AusIMM s constitution documents should be re-written in simple and clear language. Members also support the concept that the level of prescription in the constitution documents should be reduced to empower the AusIMM Board to make decisions that suit the changing needs of the Institute over time (although there are differing views on how this should be achieved in practice for some issues, and this is discussed further below as appropriate). 3

In some cases this will include removing altogether some low-value provisions from the current Charter and By-Laws. An example is that the current By-Laws 71 73 referring to the Institute s publishing activities are not required in these constitution documents. Recommendation 3: AusIMM s constitution documents should be re-written in simple, clear language with a significant reduction in the level of detail prescribed in order to appropriately empower the AusIMM Board. The majority of member feedback to the review taskforce has endorsed the concept of replacing the current Charter and By-Laws with a single document (which given recommendation 1 would be a revised Charter). This single AusIMM constitution document would then be supported by regulations or rules of the AusIMM Board. This change would mean that any future amendments to the core document (the Charter) will require approval by a majority of members and the Governor(s)-General. It is proposed that Regulations of the AusIMM should be able to be made and amended by decision of the Board. These changes should lead to an improved balance between the rights of members to consider and approve any significant changes in AusIMM s governance, while the Board is empowered to be nimble in responding to changing member needs and the Institute s circumstances. Recommendation 4: AusIMM s current Charter and By-Laws should be replaced with a single revised Charter document, and the Board empowered to establish and amend Regulations of the AusIMM. The grades of AusIMM membership for individuals A central element of the Charter and By-Laws review is to consider whether the structure of member grades meets AusIMM s current needs and any foreseeable future needs. The review discussion paper raised a number of questions about the structure of grades of AusIMM membership, the prerequisites for obtaining a membership grade, and the rights and responsibilities that are attached to each grade of membership. The discussion paper noted that there are differences between the grades established in the 1955 Charter and those that are set out in the By-Laws (and that the By-Laws member grades are in practical effect). The review discussion paper asked members for feedback on all issues relating to member grades, and highlighted some particular questions including: whether the Company Member grade continues to be an appropriate part of the mix for an Institute whose primary membership is individual professionals working in the minerals industries is there a case for modifying the current Associate Membership grade to actively engage and attract para-professional members to the Institute are there any important changes to the rights of members at different grades, for example should student and/or graduate members be able to sponsor a new student and/or graduate membership application. Feedback to the review taskforce revealed a range of views about membership grades but no significant reform recommendations regarding the core structure of member grades for individual professionals and students. The review taskforce therefore proposes that the core structure of member grades for individuals: Honorary Fellow, Fellow, Member, Associate, Graduate and Student should remain unchanged. The current By-Laws also include a grade of Visiting Member which seems unnecessary. The granting of visiting member status can be managed administratively without the need for specific inclusion in the Institute s constitution documents. Recommendation 5: No changes to the structure of grades of individual membership are proposed. The proposed new constitution will incorporate the following grades: Honorary Fellow, Fellow, Member, Associate, Graduate and Student. In keeping with recommendation 5 (above), the revised Charter will incorporate a simplified description of the structure of grades for individual members, with much of the detail regarding qualifying criteria and rights and obligations being in future set via Regulations of the AusIMM Board. An issue which may require further consideration in the future is whether the minimum qualifying criteria for Member grade should be modified. The current By-Law 10 requires candidates appointed as Member have a minimum of three years relevant work experience after obtaining a relevant university qualification. This criteria was a contributing factor in the unfortunate decision of the Canadian regulators to exclude AusIMM Members from recognition under Canadian equivalent of JORC (National Instrument 43 101). The AusIMM s peer institute in the USA, the Society for Mining, Metallurgy and Exploration (SME) recently modified the qualifying criteria for its Registered member grade to seven years industry experience from the former five year requirement. The AIG s member grade requires five years industry experience. Feedback on the question of whether the minimum criteria to qualify for member grade should be modified is invited. Issue for further consultation 2: Members are invited to comment on whether the minimum qualifying criteria for Member Grade should be increased, in particular to require greater industry experience. Company membership One member grade in the current AusIMM structure stands out as different: Company membership is available to corporate entities and organisations that have a substantial connection with the minerals and extractive industries. Company members are valued supporters of the AusIMM and often contribute extensively to the institute through contributing to Institute meetings, conferences and publications. Feedback from members on the review discussion paper indicated support for reviewing whether the current model of company membership can be enhanced to build stronger relationships between interested companies and organisations and the Institute. This topic was the subject of a workshop during the 2016 AusIMM Congress, and with the outcomes of that workshop in mind, the preliminary recommendation of the review taskforce is that the grade of Company Member should be removed from the AusIMM Constitution. Workshop participants felt that strong and productive relationships between the AusIMM and mining companies and other organisations (eg educational institutions) in the minerals sector are essential but that company membership is no longer the best model to achieve the desired strong relationships. 4

The discussion at Congress suggested that AusIMM should develop a new affiliate or partnership model to underpin relationships between the Institute and companies and organisations in the sector. The details of the model to be adopted will need to be explored in collaboration with current Company members and with other AusIMM members. The Congress workshop recommended: Consultation with companies (members and non-members) regarding the options for a new model to strengthen relationships with AusIMM. An annual fee could be introduced to provide companies access to a package of benefits, and delivered in such a way that it fits with company budget cycles. There is a significant opportunity to expand and strengthen AusIMM s relationships and partnerships with companies and other organisations in the sector if done well. Recommendation 6: The review taskforce is making a preliminary recommendation that the grade of Company Membership should be removed from the constitution, with a replacement affiliate or partnership model to be developed and implemented by the AusIMM Board. Issue for further consultation 3: Comments are invited from members on the preliminary recommendation that Company Membership should be removed from the constitution, and on the alternative models that might be developed in its place. 5

OTHER REFORM OPPORTUNITIES FOR THE AUSIMM CONSTITUTION This section of the paper discusses and makes recommendations for a range of other reforms to the AusIMM constitution to reflect the Institute s scope and better underpin contemporary and effective operations and good governance. Definitions and terminology It is clear that there is a need to improve the definition of key terms and the consistent use of terminology throughout AusIMM s constitution documents. Specific proposals will be developed during the drafting of the proposed new documents. As part of this process, consideration will be given to questions such as whether the term corporate member is still required and if so whether it should be modified to remove the potential for confusion with the Company Member grade. Recommendation 7: AusIMM s revised constitution documents will include improved definition of key terms and the consistent use of terminology throughout. The structure of the Institute There is a need to clarify and confirm the structure of the Institute: the Charter and By-Laws are currently inconsistent, with the Charter now referring to an Institute structure which was long ago modified by By- Law amendments and decisions of the Board. Figure 1 summarises AusIMM s governance structure, and the way in which ownership and control are separated and managed within the Institute. The arrows indicate the flow of accountability: from the CEO to the Board, and from the Board to members. No significant change to the current structure of the AusIMM is proposed, but changes to clarify the status and roles of some groups within the Institute structure will occur (and are discussed in detail below). Recommendation 8: No significant changes to the structure of the Institute are required. Each of the components of AusIMM s organisational structure are discussed briefly below. In some cases (eg the Complaints and Ethics Committees) the discussion includes recommendations for amendment of the Charter and By-Law provisions that establish and govern them. The President and Board The President and Board of the AusIMM are central to the good governance and effective leadership of the Institute. Consultation to date has revealed a number of options for possible changes to the arrangements for the AusIMM President and Board, and it is clear that further consideration needs to be given to these matters before firm recommendations can be made. President of the AusIMM Under the current AusIMM By-Laws, the President has three discrete powers: 1. to attend meetings of any committee of the Institute (By-Law 51) 2. to approve any public or media comment by the Institute (By-Law 59) 3. To take the Chair, or appoint a Chair of AusIMM General Meetings (By-Law 70). The President of the AusIMM is currently required by convention to fulfil two roles: the public face of the Institute; and the Chair of the AusIMM Board. These two roles require very different skills and it is possible that the fact they are tied together will discourage some candidates from expressing interest in being President. The AusIMM Board last considered the question of whether the role of President and Board Chair could be split in 2014, and at that stage expressed a view that the President role should not be changed. Consultant advisor Geoff Carter has indicated in his contributions to this review that the President is regarded as the first among equals on the Board: the Board is the leadership group who delegate certain Board representative and meeting facilitation roles and functions to the President/Chair. In 2014, the AusIMM Board also recommended that the method of electing the AusIMM President should change. The current AusIMM By-Law 32 establishes an election of the President by the Congress delegates if there are two or more candidates for the role of President in the coming year. The AusIMM Board has proposed this process be replaced with the appointment of the President by the Board. Feedback to the review taskforce s first discussion paper which raised this question to date did not reveal a majority view. This question was also discussed during Congress 2016 and diverse views were expressed by delegates. The appropriate method of the President s appointment or election requires further consideration based on modern corporate governance principles. Further member comment on the way the President should Figure 1 Overview of AusIMM s organisational structure. 6

be appointed is invited, and Geoff Carter s discussion paper exploring Board Structure, Composition and Operation provides an independent perspective which members are invited to respond to. The makeup and formation of the AusIMM Board Consultation regarding the makeup of the AusIMM Board and the method(s) by which Board members are appointed has identified a level of member support for some changes in the way the AusIMM Board is formed and operated. The feedback to the review taskforce to date indicates some level of member support for: Empowering the Board to directly appoint Board members to fill skills gaps. Introducing an ability for the Board members and/or President to be remunerated (including possibly paying only those who are directly appointed to fill skills gaps). (The current AusIMM By-Law 32 allows for the President to be paid an Honorarium). Mandatory prerequisite requirements to stand for Board election (making mandatory the sorts of guidance for candidates the Board introduced in 2014 for the 2015 Board election process). Introducing a role of President-Elect to the makeup of the Board. Issue for further consultation 4: More detailed consideration of the options for the President and Board are required. In parallel with the release of this discussion paper, the review taskforce has released a discussion paper commissioned from specialist governance consultant Geoff Carter. That discussion paper exploring Board Structure, Composition and Operation is open for member comments in parallel with this paper. The review taskforce will further consider these views and make recommendations on these issues once members input on Geoff Carter s discussion paper and on this paper has closed. AusIMM Board powers and functions The review process has identified a need to consolidate and clarify the powers and functions of the AusIMM Board into a single set of provisions. Included in this is a need to clarify the relationship between the Board and the Congress and the CEO. The By-Laws have superseded and made redundant the provisions of the Charter which were developed before the Board existed. The Charter refers instead to the creation, powers and functions of the former AusIMM Council. Powers and functions of the Board are currently described particularly in By-Laws 30 40 and 48 52, but there are also a number of other references throughout the current By-Laws and Charter (eg By-Law 53 which empowers the Board to create a Branch, and By-Law 59 which empowers the Board to approve AusIMM policy positions and authorise groups and individuals to convey them). There is scope to improve the presentation and clarity of some of these By-Law provisions, but no changes to their core intent are proposed. During the drafting of the proposed revised Charter and Regulations of the AusIMM, careful consideration will be given to which provisions should be placed in the Charter and the Regulations. Recommendation 9: Revised AusIMM Charter and Regulations of the AusIMM will be drafted to consolidate and improve the clarity surrounding the Board s powers and functions currently set out in By-Laws 30 40 and 48 52. Many of the matters to be included in these provisions of the new are discussed in Geoff Carter s discussion paper exploring Board Structure, Composition and Operation, and members comments are invited. The key change to the powers of the AusIMM Board which is recommended at this stage of the review process is that the Board becomes responsible for setting the Institute s strategic direction. Contemporary corporate governance standards place responsibility for establishing and monitoring the implementation of the organisation s strategic direction as a primary Board role. AusIMM s current By-Law 41 gives the AusIMM Congress responsibility for reviewing and approving, the Strategic Plan for the following year. Feedback from members to the review discussion paper clearly supports transferring this responsibility to the Board and clarifying the Congress is a key source of advice for the Board in fulfilling this duty. The application of modern corporate governance principles would also require this transfer of responsibility to the Board. Recommendation 10: The Board should be empowered to set the AusIMM s strategic direction, to delegate responsibility for operational planning and delivery to the CEO and to monitor implementation of the plan. Another significant change option presented in the review discussion paper is the 2014 proposal of the AusIMM Board that the Board should be empowered to appoint the President (a function which currently sits with the Congress under By-Law 41. This is the subject of ongoing consideration and will be explored further in the discussion paper the review taskforce has commissioned Geoff Carter to develop (see issue for further consideration 4 above). Chief Executive Officer The current By-Law 46 establishes the role of CEO of the AusIMM to be appointed by the Board. It is suggested this clause be expanded to clarify that the CEO is appointed by the Board on terms and conditions (including as to remuneration) as determined by the Board, and may be removed by the Board (subject to any contract of employment between the Company and the CEO) and the functions powers and responsibilities of the CEO are subject to directions of the Board as well as the requirements of the AusIMM governance documents (Charter and By-Laws/Regulations) and statutory obligations. A working-draft new provision is: A Chief Executive Officer shall be appointed by the Board on terms and conditions (including as to remuneration) as determined by the Board, and may be removed by the Board (subject to the terms of any contract of employment). The CEO shall undertake the management of the AusIMM. The functions and powers of the CEO are subject to directions of the Board. The CEO is empowered to undertake all aspects of the management of the AusIMM, including (and not limited to) engaging staff and contractors, entering contracts, managing the Institute s budgets and finances, representing the institute to stakeholders and members, delegating any functions to staff or other persons as required as directed and authorised by the Board. The equivalent provision in Engineers Australia s By-Laws is: 46. Chief Executive Officer 46.1 The Board must appoint (and may remove) a Chief Executive Officer of Engineers Australia. 46.2 The Chief Executive Officer must be a voting member. 46.3 The Chief Executive Officer is responsible to the Board for the management of Engineers Australia. 7

46.4 The Chief Executive Officer must attend all meetings of the Board, unless excused or requested not to by the Board. The CEO s role in managing the Institute should also be reflected in the drafting of the AusIMM constitution, for example clarifying that the CEO s responsibilities include: implementing the strategic direction set by the board; leading all operational matters for the Institute including functions such as working with the Committees of AusIMM Branches and Societies; giving notice of an Extraordinary General meeting or to manage the conduct of an election for the Institute; and managing all matters relating to contracts, partnerships and financial management for the Institute. Recommendation 11: The current By-Law 46 should be expanded to clarify the role of CEO in leading all aspects of the management of the AusIMM. AusIMM Congress The AusIMM Congress as it is currently established is a body appointed each year that may make some particular decisions (eg a President s election) it meets once a year at a face-to-face meeting, and is also able to make decisions outside the face-to-face Congress meeting dates. Congress is established and governed by By-Laws 41 45, with other references to the functions and conduct of Congress in By-Laws 32, 66, 68 and 69. The Charter provisions relating to Congress were the subject of a workshop discussion during the 2016 AusIMM Congress. This workshop explored the appropriateness of current Congress functions: the election of the President; approving the strategic plan; identifying and discussing strategic issues and making recommendations to the Board; and identifying issues of interest to members. As noted above (in the section discussing the AusIMM Board), this review is recommending that the Congress transitions from currently being responsible for approving the AusIMM Strategic Plan to Congress advising the Board on strategy. This is consistent with modern corporate governance approaches, making the Board responsible for setting the Institute s strategic direction. Under this proposal Congress becomes a key source of advice and input to the Board s role in setting the strategic direction. The workshop conducted at Congress also came to this view, emphasising the important role that Congress plays as an input to the Board s work to set the Institute s strategic direction. The workshop conducted during Congress 2016 also explored the question of whether Congress needs to continue as an annual faceto-face meeting. The workshop concluded that an annual face-to-face meeting will be the best model for the foreseeable future, but that the new constitution should allow for future flexibility for changes to the regularity or the mode of conduct of Congress meetings. The workshop also discussed a range of operational matters relating to the conduct of Congress including the possibility of changing the practice of conducting Congress in a different location (hosted by an AusIMM Branch) each year. These operational matters are rightly issues for the Board and CEO, not things that should be prescribed in the new constitution. In keeping with recommendation 3, above, the level of prescription around the Congress should be minimised in the Institute s constitution. This will enable changes to be made as appropriate to the conduct of Congress as the needs of the Institute change in the future. AusIMM Communities of Interest The treatment of AusIMM Communities of Interest (Branches, Student Chapters, Societies, Committees and Taskforces) in the Charter and By- Laws is discussed below. The order of discussion is not intended to imply the relative importance of each type of Community of Interest. Feedback from members in response to the review discussion paper has clearly indicated support for consistent operating rules and guidance for AusIMM Communities of Interest, and also for the Board being empowered to set required detailed rules through Board decisions rather than in the Charter. This feedback is incorporated into the proposed approaches outlined below. Branches Branches are governed by By-Laws 3, 53, 54 and 56 61 in particular. There is currently no clear definition of a Branch, and some of the provisions relating to their creation and operation are detail that would better fit in future AusIMM Board Regulations rather than in a new Charter. It is proposed that the revised Charter should: define what Branches are, empower the Board to create and to wind-up Branches, and empower the Board to establish rules and guidance for the operation of Branches. Student Chapters Student Chapters are not mentioned in the current By-Laws of the AusIMM. It is proposed that the revised Charter should recognised and define Student Chapters as part of the Institute s structure, and provide for Student Chapters to be created and wound up by the Board and managed by the CEO in accordance with rules and guidance approved by the Board. This would put Student Chapters on an equal footing with Branches and Societies with regards their status in the AusIMM constitution. This suggested change to recognise Student Chapters in the constitution was supported by discussions held during AusIMM Congress 2016. Societies One historical disconnect in the language of the current Charter and By-Laws is the use of the term Divisions in the 1955 Charter which was replaced with Societies in the By-Laws. The By-Laws terminology of Societies is now well embedded into AusIMM operations, with six Societies of the Institute now in place. Societies are governed by By-Laws 4 and 55 61 in particular. There is currently no clear definition of a Society, and some of the provisions relating to their creation and operation are detail that would better fit in future AusIMM Board Regulations rather than in a new Charter. It is proposed that the revised Charter should: define what Societies are, empower the Board to create and to wind-up Societies, and empower the Board to establish rules and guidance for the operation of Societies. Recommendation 12: The new AusIMM Charter define AusIMM Branches, Student Chapters and Societies, and for each of these empower the AusIMM Board to create and wind-up an individual group and establish rules and guidance for their operation. Affiliated Societies By-Law 4(a) contemplates affiliated Societies : allowing for a group that has been created outside AusIMM becoming affiliated with the Institute in a way similar to a subject-specialist Society created within the Institute. By-Law 52 states that The affairs of each affiliated Society 8

shall be administered within each Society consistent with the basis on which the Society was affiliated. AusIMM currently has no affiliated Societies. The current By-Law provision is quite specific and should be replaced with a more general provision in the AusIMM constitution documents recognising that affiliations, partnerships and cooperation agreements are valuable ways of operating. Board of Chartered Professionals The AusIMM Charter does not contemplate a professional accreditation program such as the current Chartered Professional program. There is also very limited detail regarding Chartered Professional in the current By-Laws: By-Law 4(b) provides a high-level description of the program, and creates the Board of Chartered Professionals as the body responsible for setting the standards and administrative procedures for the Chartered Professional program, and clarifies that the Board of Chartered Professionals is accountable to the AusIMM Board. The AusIMM Chartered Professional program is undergoing a review: earlier this year the AusIMM Board initiated a review with the intention of adopting a new and improved professional accreditation scheme that will meet members needs over the longer term and ensure increased recognition by employers, governments and our professional colleagues of the standing of AusIMM accredited professionals. The Board has established an advisory taskforce to support it in determining the features and requirements of the new scheme. This work initiated by the AusIMM Board is separate to this review of the AusIMM Charter and By-Laws. The Board of Chartered Professionals had also previously proposed to this review that its name should be changed to avoid the possibility of confusion about the respective roles and responsibilities of the AusIMM Board and the Board of Chartered Professionals. This proposed change was raised as a discussion point and generally supported by AusIMM members in feedback to the Charter and By-Laws review discussion paper. In the light of the above, it is proposed that the new AusIMM constitution documents simply note that the Institute will have a professional accreditation program and empower the AusIMM Board to make all necessary arrangements for the operation and governance of that scheme. This will enable to the Board to ensure that the program can adapt to changing member needs and in response to changing external factors such as changes in professional regulation activity by Governments (eg the current Victorian Government s proposal to introduce a professional engineers regulatory scheme). This approach is also consistent with properly implementing recommendation 3, set out above. Recommendation 13: Amendments should be made to empower the AusIMM Board to establish a professional accreditation program and to provide for its operations and governance through Regulations and guidelines of the Board. These changes would remove specific reference to the current Board of Chartered Professionals. Compliance Committees By-Law 26 establishes the AusIMM Complaints Committee and Ethics Committee, and describes their powers and the complaints process within which they operate. These are essential committees of the Institute, and no change is proposed to their role within the organisational structure. Specific proposals to clarify and augment the AusIMM compliance processes as established by the current By-Law 26 are outlined in the relevant section below. Audit Committee By-Law 50 establishes the Audit and Compliance Committee of the Institute, setting out its makeup (three Board members, one of whom is Chair, and the option of an external appointment of particular expertise ), and empowers the Board to define the duties and responsibilities of the Committee. Since this By-Law was drafted, the Board has adopted the alternative name of Audit and Risk Management Committee, and there have been some times where the current rules regarding the Committee s makeup have restricted flexibility to ensure continuity of membership and an appropriate skills mix. In order to allow increased flexibility in the operation of this essential committee, it is proposed that the revised AusIMM constitution requires that an Audit Committee be created by the Board, and empowers the Board to determine its makeup and operating procedures. Other committees, networks, taskforces and affiliates of the AusIMM There are a number of current committees and taskforces that have been established by the AusIMM Board and/or the CEO. These range in importance and tenure, with examples including: Investment Committee, responsible for oversight of AusIMM s investment management strategies Publications Committee, an advisory committee that draws advice from AusIMM s societies to support effective decision-making by the CEO regarding which publishing projects to undertake New Professionals Network, a group focused on supporting the professional development of early career professionals Women in Mining Network (WIMnet), a group focused on initiatives and advocacy to support equality of opportunity and outcome for women in the mining professions The Charter and By-Laws review taskforce which the Board formed in order to conduct this review of the Institute s constitution documents and make recommendations to the Board and members for changes. AusIMM also has affiliated relationships with other bodies. Examples include: The Education Endowment Fund, a trust fund administering education initiatives and grants which is independent of AusIMM and managed at the sole discretion of its trustees (including the AusIMM President as a trustee). Various international and domestic professional institutes including partnerships through the Global Minerals Professionals Alliance and bilateral Memoranda of Understanding with groups such as the Mongolian Professional Institute of Geosciences and Mining. The Joint Ore Reserves Committee (JORC) and the VALMIN Committee, for which AusIMM is one parent body, jointly responsible for the formation, operations and funding of the Committees and for the ongoing maintenance of their respective professional Codes. Currently the Charter and By-Laws do not explicitly describe the AusIMM s relationship with these various affiliated bodies. Advice will be sought regarding whether there is a need to add explicit provision for the AusIMM to engage in these types of affiliations and partnerships 9

as part of the suite of recommended reforms, or whether this is appropriately implied in the powers for the Board and CEO to plan and conduct the operations of the Institute. This discussion is also related to the review of the concept of Affiliated Societies under By-Law 4(a) (see above). It is proposed the new constitution should simply empower the Board to enter affiliation, partnership and cooperation agreements. Operational detail of individual committees and taskforces does not belong in the constitution. Subsidiary entities AusIMM s operational needs sometimes require the establishment of a subsidiary (wholly owned) entity. The corporate entity operating as the AusIMM Hong Kong Branch is a key example: establishing a corporate entity in Hong Kong was an essential underpinning to allow Hong Kong based members to come together as a Branch conducting formal activities including technical meetings and hosting the PACRIM 2015 conference. Currently the Charter and By-Laws do not explicitly state that the AusIMM Board and CEO can establish subsidiary entities. Establishing such subsidiary entities is a normal part of the management of corporate entities. It is proposed advice is sought regarding the need to include a general provision empowering the Institute to establish subsidiary corporate entities in the AusIMM constitution documents. Recommendation 14: Advice will be sought in drafting the revised AusIMM constitution documents as to the need to incorporate provisions empowering the CEO and Board to enter affiliation, partnership and cooperation agreements and to establish subsidiary corporate entities. Operation of committees The AusIMM Charter and By-Laws contain various provisions that direct the operations of committees, and in some cases are confusing because the term committee is used both to denote an elected leadership committee for a Branch or Society and also a committee appointed to examine a particular issue (for example the New Professionals Network). Some of these provisions are very detailed, and together they fail to provide a comprehensive guide to the effective operation of committees. It is proposed that the future AusIMM constitution documents should simply empower the Board to establish rules and guidance for the effective operation of all groups within the AusIMM. Conduct of meetings, ballots and notices Feedback to the review taskforce to date suggests that the By-Laws that govern the conduct of meetings, ballots and notices (in particular By- Laws 62 70 and 76) are fundamentally sound, but should be reviewed to ensure they are appropriately simple and they allow for future flexibility for conduct of ballots and meetings by methods determined by the Board as appropriate at the time. Minor changes along these lines will be developed as part of the drafting of the proposed AusIMM constitution documents. Financial management of the Institute Financial accounts and audit There are a number of changes that are required to ensure that the AusIMM constitution documents reflect best practice in corporate governance and financial management. The current By-Law 58 is overly prescriptive and reflects an out-dated method of managing the Institute s finances. By-Law 47 which requires that the Annual General Meeting endorse the auditor is also inconsistent with contemporary practice as this is a function that normally rests with the Board. It is proposed that the revised AusIMM constitution documents will require that the institute meets all financial management requirements applying to it as a corporate entity. All AusIMM Branches, Student Chapters, Societies and other groups are required to manage financial issues as directed by the CEO and Board. Recommendation 15: The detail contained in the AusIMM Charter and By-Laws regarding financial accounts and audit will be replaced with a simple provision which clarifies the Board is responsible for ensuring best practice in financial management and across the Institute. Membership fees and concessional rates By-Law 27 empowers the AusIMM Board to determine entrance, transfer and annual subscription fees. These fees can be (and are) set at different rates for different grades of membership, and have in the past been set for applications for entrance to Chartered Professional accreditation. The review discussion paper sought feedback on the current By-Law provisions relating to the setting of membership fees and in particular the highly prescriptive concessional fee structure outlined in the By-Laws. The feedback to date while not unanimous supports simplifying the provisions in AusIMM s constitution documents and empowering the Board to set fees and rules for concessional fees, allowing more freedom to modify these arrangements in response to changing circumstances. As per the current By-Laws, the Board should retain an ability to set fees for application or admission and for annual renewal of membership at a particular grade. The Board should also have a general power to establish fees for other purposes including application and annual fees for Chartered Professional accreditation. The current By-Laws do not explicitly authorise the Board to establish fees of other types. A general power to authorise the Board to establish fees for purposes that have not been envisaged at the time of recommending amendments to the current Charter and By-Laws would seem useful. The following provision from the Engineers Australia By-Laws may provide a useful guide to the type of provisions AusIMM could adopt: 11. Subscription and fees 11.1 The Board must prescribe the subscription and any other fees to be paid by members. 11.2 The amount of the subscription and fees, and the date for payment may vary according to criteria set by the Board, including the category and grade of membership. 11.3 The rights (including voting rights) of members who have not paid all subscriptions and fees by the date for payment are suspended until those amounts are paid. 11.4 Members in the grade of Honorary Fellow are not required to pay any subscription or other fee in respect of membership. Recommendation 16: The detail contained in the AusIMM Charter and By-Laws regarding the level at which fees are set should be removed and replaced with provisions that empower the AusIMM Board to set fees (including concessional fees and conditions) applying to member grades and accreditations, and to set other fees as it determines appropriate. 10