Editorial: June 2012
Change hits associations
By Patrick Flannery
Glass industry associations say they are ready for the changes to the
laws that govern their not-for-profit status, but some of the effects of
the changes will be unpredictable.
Glass industry associations say they are ready for the changes to the laws that govern their not-for-profit status, but some of the effects of the changes will be unpredictable.
New rules for not-for-profit corporations have passed into law, and your industry associations have until October 17, 2014, to comply with them or risk losing their statuses as not-for-profit organizations. They are all at different stages of preparation for the changes, but all are confident they will have everything in place in time. This is good news, since the changes could have serious impacts on how the associations are governed, how transparent their operations are and how much control members have over directors and executives.
The changes are contained in the Canada Not-for-profit Corporations Act, which replaces the old Canada Corporations Act, Part II. Given that the old Act has not had significant revision since its inception in 1917, it is probably fair to say that it was due for an update.
Association members might want to get familiar with the new rules because there are some potentially big changes to how their organization is run. Members have expanded rights under the new Act to require directors to call meetings and submit meeting proposals. They can obtain court orders to stop so-called “oppressive” actions by associations that unfairly run against the interests of members. Directors must now disclose any material interests they may have in contracts or transactions with the corporation. They could even be held liable for certain financial liabilities of the not-for-profit corporation. Directors are not required to be residents of Canada, but their residency can have implications for the tax status of the corporation. Associations that take in more than $10,000 per year (that is, pretty much all the major ones) have additional rules. They must appoint an accountant, file public financial statements and may only donate to qualified organizations. The law firm Pallett Valo has a good overview of the new laws at www.pallettvalo.com .
Zana Gordon, executive director of the Canadian Glass Association, reports that the CGA completed all the necessary changes to its bylaws at the AGM on May 30. Members will notice one very big change in particular at the AGM in Montreal in 2013. Under the new rules, federally registered associations cannot have appointed directors; directors must be directly elected by the membership. This ends the CGA’s practice of automatically giving the president of each regional association a seat on the board. Any CGA member may now be nominated for a director’s seat, and members will have a chance to vote for their favourites in Montreal.
The consequences of this change promise to be very interesting. Will members elect a purely national board, with a pan-Canada perspective? Or will they focus on having their regions’ interests represented at the national level? It looks like the 2013 AGM is going to be a can’t-miss event.