AGS Governance

Proposed Changes to the Governance Arrangements of the AGS

Preamble

The Australian Geomechanics Society (AGS) has a rich and extensive history of providing technical support to the Australian geotechnical and engineering geology professions, and representation to our affiliated International Societies: the International Society for Soil Mechanics and Geotechnical Engineering (ISSMGE), the International Association of Engineering Geology and the Environment (IAEG), and the International Society for Rock Mechanics and Rock Engineering (ISRM). A detailed exposition of this history is presented in the 50th Anniversary Commemorative Volume of Australian Geomechanics published in 2020 and available on the AGS website.

For the last 25 years, the AGS has consistently increased its membership numbers, implemented the production of four issues of the Australian Geomechanics journal per year, held around 1,000 professional development events across six Australian chapters, convened over 100 chapter symposia, organised a regional conference with the New Zealand Geotechnical Society every four years, hosted major international conferences in 2000, 2014, 2016, and 2022, and delivered professional training courses to its members, on a variety of topics across the country. The AGS has done this largely by operating autonomously and whilst steadily consolidating its own financial position. By any measure, the AGS is a success, and exemplar amongst professional engineering technical societies in Australia and across the world.

To most members it would seem that the AGS must be operating according to a well-established and stable governance model. However, the smaller number of members who have voluntarily participated at Chapter Committee level, and in particular, served on the National Committee, would be aware (to various degrees) that the circumstances under which the AGS has been operating are inherently problematic and not sustainable. This statement does not imply in any way that the governance of the AGS has not been carried out with the utmost honesty and integrity; rather, it recognises that the governance arrangements under which the AGS has been operating do not have a sound legislative basis, with the consequence that members of the AGS Executive are more legally exposed than office bearers of a volunteer organisation should be.

This paper provides a summary of the current governance arrangements of the AGS, the historical reasons for them, and an explanation for why the governance model needs to change. It also provides an outline of the options for change, and the benefits and drawbacks of each.

A brief history of AGS governance

The following points present a brief history of the AGS governance arrangements that have resulted in the present situation.

• The AGS was originally established as a Technical Society of the Institution of Engineers Australia (now with the trading name of Engineers Australia (EA), and for the convenience of this document, referred to as such, regardless of the timing of the events described) and the Australasian Institute of Mining and Metallurgy (AusIMM).
• The AGS was established legally as an unincorporated society of EA in 1970, and this arrangement has never formally been altered.
• As far as the AGS is aware, no documentation from its establishment has survived, including a constitution that would have been ratified by both EA and the AGS at the time of its formation (should that formality have occurred).
• By the late 1990s, the AGS was well established and had clear visions as to how it wanted to operate and grow services to its members. However, the compliance requirements of EA were increasingly perceived as inhibiting that growth, and successive AGS National Executives recall growing frustration with trying to improve and increase service to members under the operating environment imposed by EA. A key point of contention was the provision of secretariat services by EA including financial management, which did not satisfy the expectations or needs of the AGS.
• In 2005, the AGS National Committee of the day undertook to discontinue the procurement of secretariat services through EA, and engaged our own secretariat services (through a contract) to serve the AGS directly; this arrangement still exists today.
• From that time onwards, the AGS has successfully retained and managed its own finances, and routinely signed and honoured contracts for secretariat and accounting services, conferences (Professional Conference Organisers (PCOs), venues, suppliers, etc), editorial support and production of the Australian Geomechanics journal, and part-time support for marketing and the website.
• In doing so, the AGS has realised excellent growth in both its membership and the extent of member benefits it can offer. However, as an unincorporated society, these accomplishments have sometimes involved personal risk for our leadership.
• AGS office bearers have been aware of the associated risks of operating in this fashion to varying degrees, and an in-principle intention has been fostered to see the AGS transition to become an incorporated society.
• In 2000, and prior to taking control of its own secretariat and financial management functions, the AGS engaged legal advice to prepare a constitution consistent with an incorporated society. This constitution was subsequently adopted by the membership with the intention of proceeding to incorporation.
• The AGS has generally operated in accordance with that constitution for more than 20 years, until the present time, and for a variety of reasons it never proceeded to incorporate.
• Around 2013, in recognition that the constitutions of its Technical Societies were vastly inconsistent (where they existed at all), EA sought to standardise governance arrangements with its Technical Societies through a new constitution. For the AGS, this new EA document was appropriate for an unincorporated society, but was inconsistent with our well-established governance practices and was non-negotiable. The AGS never signed or otherwise endorsed the new constitution by EA, and continues to operate in line with the one it had prepared for its intended transition to an incorporated society (as available from the AGS website).
• The Bylaws and General Regulations of EA make provision for its Technical Societies to be retained as National Committees, Unincorporated Societies or Incorporated Societies.
• Over the past 8 years, different AGS National Executives have engaged with EA to initiate a process of transition to an Incorporated Society. To date, a pathway has not been agreed.
• The AGS National Executive is currently engaging with EA once again, in pursuit of a collaborative change that will maintain the existing affiliated status.
• The AGS has had no formal interaction with or reliance upon AusIMM since around 2000.

What is an unincorporated society?

The Australian Charities and Not-for-profits Commission (ACNC) sets out the legal powers and obligations of an unincorporated society (association). Significantly for the AGS, unlike an incorporated structure, an unincorporated association is not a separate legal entity from its members, and as such, it cannot enter into contracts in its own name, or own land, or employ people, sue or be sued. The members of an unincorporated association do things on behalf of the association, and the members may each have individual legal liability for the association’s debts and defaults, something which can lead to legal risk for those members.

Legal protections for the AGS office-bearers and its members are in-principle derived through its association with EA, provided their activities are carried out with a prescribed level of compliance with a relatively restrictive set of rules, as described in the Governance Documents of EA.

Accounts of the relationship between AGS and EA in the late 20th Century are now relatively few, and there is nothing to suggest that the AGS did not operate and comply with the rules set out by EA in that period.

The Engineers Australia General Regulations of 2016 documented that at that time, 11 of 27 technical societies of Engineers Australia were incorporated:

It is believed that all of the currently incorporated technical societies of EA established their incorporation prior to joining EA. Regardless, there is no established or recognised pathway for an unincorporated technical society of EA to become incorporated.

The available options

From the preceding summary, it is clear that governance arrangements for the AGS cannot remain the way they are. That is, we cannot continue to operate according to the constitution of an incorporated society when our formal legal status is that of an unincorporated society. From an internal AGS review of governance supplemented by legal advice, the available options can be summarised as follows:

• Sign the EA unincorporated societies constitution and conform to its governance requirements;
• Move ahead with the adoption of a new self-determining governance structure, with or without the endorsement of EA, and seek to be recognised as a Technical Society of EA in a new collaborative partnership.

Although the preceding summary implies that the new governance structure should be that of an incorporated society, that is not the only option for a legally-established, self-determining governance structure that would give the AGS the flexibility to continue its current style of operation and service to its members. The alternative to incorporation would be to register the AGS as a not-for-profit company, limited by guarantee under the Australian Securities and Investments Commission (ASIC). The following sections explore the implications and consequences of each option.

However, before proceeding, it is very important to emphasise that the overwhelming motivation for the change in governance being proposed is NOT to end our relationship with EA, but to move to a legally sanctioned governance arrangement that would formalise the flexible operating arrangements that have made the AGS so successful, without its office bearers carrying unnecessary risk.

The option to adopt EA’s constitution

As noted above, observance of our legal status as an unincorporated society would place serious fundamental restrictions on the ability of AGS to operate flexibly, and with autonomy. Significantly:

• as an unincorporated society, AGS cannot legally enter into contracts in its own name, or employ people, because the organisation is not a separate legal structure (this has been legally possible through the AGS having its own ABN but it does so at considerable risk).
• the unincorporated association structure that AGS operates under is only suitable for small, simple groups or organisations with minimal assets and the association cannot hold assets in its own name (yet we do hold cash reserves in bank accounts under our own name).
• the members may each have individual legal liability for the AGS’s actions, debts and defaults, exposing those members to legal consequence, and we rely on (trust) EA to provide the protections of professional and public liability insurance for us in a relationship that has been very limited and un-tested in this regard.

The obligations of the AGS, which should strictly be followed in return for legal protection from EA, are spelled out in the EA By-laws (2015), the Engineers Australia General Regulations (2019) and the Technical Societies of Engineers Australia Guidelines & Regulations (Issue: 1 Revision: 7 May 2006). These obligations include:

• having a similar purpose to Engineers Australia at least in part;
• having a governing committee consisting of at least six but no more than 12 members;
• requirements that the AGS should collaborate with the College with which it is most closely aligned (currently the Civil College), to produce an annual plan for its activities in the next year, showing how the AGS proposes to carry out its functions consistently with EA’s strategic goals and how it intends to resource those activities;
• a requirement for each AGS Chapter to liaise with the Division Committee on operational aspects of its meetings and its CPD delivery;
• a requirement to make known on all literature and correspondence that the AGS is a “Technical Society of Engineers Australia”, using the EA red hexagon logo in strict accordance with the Engineers Australia Corporate Logo Policy, with any variation formally approved by the Director of Marketing at the EA National Office in Canberra;
• a requirement that, where possible, office bearers should be EA members, and in all but exceptional circumstances, the Chairman, Secretary and Treasurer must be EA members;
• a requirement that AGS shall seek approval for any non-EA office bearers in these positions from the VP Engineering Practice through the EA Board of Engineering Practice;
• a requirement, in the absence of any EA member office bearers, to nominate a Committee member who is also a member of EA;
• requirements for aspects of society administration, including management of membership lists in accordance with National Privacy Legislation and EA’s policy on distribution and protection of these lists;
• an expectation that EA should manage member subscriptions on behalf of the AGS;
• requirements to keep EA informed of details of all office bearers at Chapter and National level;
• a requirement for regular detailed financial reporting to EA at Chapter and National level;
• requirements to recognise EA in all documentation and publications, including web pages;
• A requirement to submit an annual report to the Board of Engineering Practice, including:
  • a summary of activities of the previous year, at both chapter and national levels, including participation and membership numbers and financial outcomes;
  • planned activities to meet the AGS and EA aims and objectives;
  • audited financial accounts for the previous year; and,
  • the Technical Society budget for the coming year.

The AGS has complied with some of these obligations, and has not complied with others, due either to inertia at the time of introduction, lack of awareness, or perceived burden. For their part, EA has allowed the AGS to operate as it has without any formal warning or sanction, which has included transferring membership registration fees to an AGS bank account since 2005. But for the AGS this situation includes the possibility that EA might at any time cease to be satisfied with the arrangement, whilst being uncertain of the extent to which its office bearers and members are legally protected or exposed. In light of the AGS not being in strict compliance with the noted obligations, and in light of the AGS undertaking its activities with almost complete independence, it has never been ascertained whether the legal protections of EA would be extended to the AGS and its members (some of whom are not members of EA), in part or in full, should the need arise.

So, given the obligations of the unincorporated AGS to EA listed above, an obvious question is why would the AGS not be able to fully meet the obligations set out by EA? Collectively these obligations represent a substantial burden of reporting and compliance on the volunteers who make up the AGS National Committee and the Chapter Committees.

More significant than the explicit burden of reporting and compliance – much of which the AGS will be legally obligated to complete if a company limited by guarantee is created – is the implicit requirement that AGS initiatives and activities will be subject to direction, approval and control from EA. A consequence of operating strictly as an unincorporated society under EA’s protection is that the AGS would be obliged to rely on EA to sign contracts. This means that EA could refuse to make financial arrangements for any AGS activity that it didn’t sanction. An example of where this is likely to become problematic is through the requirement to liaise with EA in setting its agenda, and to show how the AGS proposes to carry out its functions consistently with EA’s strategic goals. Prior to becoming more independent in the early 2000s, and later on when the AGS engaged with EA for discrete events, the service provided by EA has been inconsistent, and sometimes influenced by personnel changes or an un-shared sense of urgency in supporting AGS objectives.

On one occasion in the last 15 years, EA implemented a policy that its Technical Societies should hold all events at EA venues. The AGS leadership did not believe this restriction was in the best interests of its members so did not comply. Whilst the AGS and EA are generally in pursuit of common goals, in many respects the organisations have very different ideas on how to reach them.

The capacity of the AGS to deliver for its members is evident in the experience of running major international conferences. For the 20th International Conference on Soil Mechanics and Geotechnical Engineering (ICSMGE) in 2021, the AGS, with appropriate due diligence, sought quotes from 5 different PCOs and organised and under-wrote the event independently. The conference was an overwhelming success, despite a period of considerable financial risk to the AGS associated with Covid, a related dependence upon international attendees, a year-long delay, and a significant change to a hybrid mode of presentation.

The alternatives

The alternatives to compliance with EA’s expectations of an unincorporated society all involve a change of status to a legally-protected, self-determining, not-for-profit structure. This could be done with or without the blessing and ideological support of EA, although a new and enduring partnership with EA is the preferred option.

Although for more than 20 years the envisioned arrangement was for the AGS to become incorporated, a registered not-for-profit company limited by guarantee would also provide a suitable governance model.

These options have various advantages and disadvantages, but a significant distinction is that the incorporation framework is state-based, meaning that were the AGS to incorporate, it would need to be in one state, with consequent implications (both real and perceived) for state-based Chapters. Registration as an Australian company limited by guarantee has no equivalent limitation.

To avoid any doubt, while some new operational costs would be expected for the society to comply with legislative requirements, and our national leadership would be expected to attend a one or two day training course relating to governance, the AGS is in a sound financial position. No increase would be expected to membership fees in relation to the formation of a company limited by guarantee.

The next steps

The AGS National leadership has decided that our current practices are unsustainable and that a new governance model is required, by either transitioning back to being a compliant unincorporated Technical Society of EA, or by changing our status to that of an independent entity in the form of a not-for-profit company limited by guarantee.

In the coming months, you will be asked to cast a vote. A change from our unincorporated status will only proceed if more than 75% of the members who vote, support the proposed change. This document provides a general background and context to the proposed change, but more information (including a proposed constitution for the proposed new entity) will be provided prior to the vote being held. You are encouraged to read it carefully before making a decision.

In the meantime, the AGS will engage with EA in pursuit of their endorsement for the creation of a new company limited by guarantee, and in pursuit of a sustained relationship as an affiliated technical society. It is noted again that the governance bylaws of EA contain provisions for such an arrangement. In the event that the proposed change is supported by the AGS membership, but opposed by EA, the AGS plans to proceed regardless, still with a hope to resolve whatever disagreement may exist.

Credits:

This discussion paper is based on an internal AGS review first prepared by Stephen Fityus in 2018 and updated by him recently. It has been reviewed and endorsed by the following past and current leaders of the Australian Geomechanics Society:

• Chris Haberfield, National Chair 1998-1999
• John Carter, National Chair 2000-2001
• Andrew Leventhal, National Chair 2002-2003
• Mark Jaksa, National Chair 2004-2005
• Marc Woodward, National Chair 2006-2007
• Neil Benson, National Chair 2008-2009
  Graham Scholey, National Chair 2010-2011
• Sam Mackenzie, National Chair 2012-2013
• Darren Paul, National Chair 2014-2015
• Hugo Acosta-Martinez, National Chair 2016-2017
• Stephen Fityus, National Chair 2018-2019
• Nina Levy, National Chair 2020-2021
• David Lacey, National Chair 2022-2023
• Tim Thompson, National Chair 2024-2025
• Amir Shahkolahi, current Deputy National Chair

9 August 2024.