A CHANGE in the wording of the 2021 CBH member director elections nomination form has raised concerns that it gives the board the power to dismiss a director without shareholder approval.
In years gone by, point ix (9) of the nomination form had candidates agree to "abide by the CBH Group Directors Code of Behaviour, if elected".
However, the form for the 2021 District 3 and 5 elections instead stated that candidates "agree to abide by the CBH Group Directors Code of Behaviour, if elected, and agree that if I am found to have materially breached this code and am requested by the Board to resign, I will resign and not stand as a candidate in any future Director elections".
The concern raised is that in order for a director to be removed from the board, a special resolution must be passed by the shareholders, as was the case with former director Trevor Badger last year.
According to CBH's Board Charter, a director can be removed if they are disqualified or otherwise unable to be a director under the Co-operatives Act; absents himself or herself from three consecutive ordinary meetings of the board without its leave; ceases to hold a qualification that qualified the person to be a director; or is removed from office by special resolution of members.
Newdegate farmer and former CBH chairman Wally Newman said he couldn't believe that the board would make such a change to the wording given it does not have the power to force a director to resign.
"The board cannot dismiss a director, they can only recommend to the shareholders to stand a director down," Mr Newman said.
"Only the members can elect a director and only the members can dismiss a director, the board does not have that power.
"That's why when Trevor Badger refused to resign last year, the board had to recommend to the members that he be stood down, but Trevor was quite within his rights to do that."
CBH company secretary David Woolfe said the co-operative continuously sought to ensure that prospective and current directors were clear on their duties and expectations while serving on the board, which were outlined in the Directors' Code of Behaviour, and had sought to further clarify these expectations in the CBH director nomination form.
"As outlined in the Directors' Code of Behaviour, in the event a director is found by a governance committee to have materially breached the Directors' Code of Behaviour, and where the board determines that the director should resign as a result, the director agrees to tender their resignation and not stand as a candidate in any future director elections," Mr Woolfe said.
"It is common practice that where a director has materially breached their director's duties and has lost the confidence of their fellow board members, they resign of their own accord, and CBH is seeking to ensure our directors understand this expectation.
"CBH is acting within the Co-operatives Act and members continue to have the right to remove directors under section 206A of the Co-operative Act 2009."
Mr Newman believes the change in the wording on the nomination form could be seen as an attempt by the board to wrestle control away from the members.
"When I first joined as a director, the board was 100 per cent unanimous behind the corporate push, but I came on as a dissenting director because I stood on a platform to retain the co-op," he said.
"When I made it clear there was no way I would support their decision, I can tell you if that board had the power to kick me out they would have found an excuse and I would have been out the door within three months of being elected.
"The board is trying to take the power away from the members, if they can sack a director without going to the members, that is a very dangerous precedent."
The District 3 and 5 elections only had one nominee each, with deputy chairwoman Natalie Browning and chairman Simon Stead both being respectively re-elected unopposed on January 4.
"If I was to be nominating as a director now, there is no way I would have signed that form, I would have crossed out that line and then signed it, because I know what the rules are," Mr Newman said.
"The average grower would not have a clue, they would be misled and deceived by that document because they would think that if they breached the rules they could be forced to resign by the board, when in actual fact they can only be sacked by the members."
Having been re-elected, the formal re-appointment of Ms Browning and Mr Stead will take place at the CBH Annual General Meeting on Thursday, February 25 in Perth at Optus Stadium.
