Secretary's manual (page 4 of 9)

Animal Pedigree Act Secretary's Manual - Table of Contents

Governance of breed associations

Introduction

Incorporation of breed associations under the Animal Pedigree Act is voluntary. Associations are approved for the principal purpose of operating a breed registry which includes registration of animals, storing of pedigree information and issuance of certificates and other proof of pedigree background. Breed registries are essentially databases which function like family trees for domestic breeds of animals. The legal authority of a breed association comes from the Act and the by-laws which are in effect. By-laws are only in effect once approved by the Minister of Agriculture and Agri-Food Canada. Members are bound by the bylaws of the association.

Besides the operation of a registry, associations also exist to improve and promote their breed(s) and to generally further the common interests of breeders. There are benefits and obligations for associations which are incorporated under the Act; primary among them is to act in a democratic fashion. Helpful guidelines for parliamentary procedures and the democratic conduct of the affairs of associations are available from libraries and bookstores. A list of references is provided in Chapter 10 of this manual.

Breed association responsibilities

A breed association is given legal authority under its Articles of Incorporation and By-laws to administer the association's affairs in accordance with the Animal Pedigree Act. The Act requires by-laws to be made which establish a democratic basis for representing breeders. It also anticipates that breed associations have responsibility for the protection of the interests of persons who may purchase animals registered under the authority of the association. Rules of membership must be clearly detailed in the by-laws as must the rules of eligibility for registration and the procedures to be followed in application for registration. The Act also sets out other items which must be contained in the by-laws. The by-laws bind all members.

Although associations provide service to members, as the sole authority to register a breed in Canada they must also not deny registration or transfers except in specific circumstances.

The exceptions are as follows [see Section 61 of the Act]:

Note that membership dues are different from fees. Fees are paid for services. Dues are paid for membership privileges. Since registration can not be denied to persons who either do not wish to be a member or for various reasons may be denied membership, many associations have adopted special fees for non-members. These are usually set at double the rate for members.

Breed associations have responsibility to maintain the integrity of pedigree information. Upon incorporation, they also accept responsibility to manage the business affairs of the association in a reasonably prudent fashion. All funds (including profits and other accretions) of the association are to be used only for the furtherance of the purposes of the association. Audited financial statements are to be submitted annually to Agriculture and Agri-Food Canada along with a list of directors and officers of the association and where appropriate, the names of delegates to Canadian Livestock Records Corporation (section 60). The association must also send to Agriculture and Agri-Food Canada notices of meetings setting out proposed amendments to its by-laws, a copy of the annual report after each annual meeting, and the proposed amendments (see chapter on By-law Amendments and also the Checklist at the end of this chapter).

The democratic process

Breed associations are expected to operate in a democratic fashion. The Animal Pedigree Act establishes minimum guidelines for creating by-laws which will promote a democratic process. Substantially more work is required though, to develop an effective set of rules and procedures.

The dictionary defines democracy as a form of governance in which political power resides in all the people and is exercised by them directly or indirectly through elected representatives. It is a system in which the will of the majority must be carried out, but the minority must also be heard and its rights protected. To achieve this the membership must be well informed, motivated, dedicated to a common goal and acting with good intent. An effective democratic process also requires participation.

The by-laws of breed associations guarantee certain rights of membership. However, there are other rights that may go unstated. For example, full members of any democratic organisation should be entitled to all of the following rights (from Procedures for Meetings and Organizations, Kerr & King):

  1. to receive adequate notice of meetings, newsletters, and regular mailings;
  2. to participate in debate and to exercise one vote (or a weighted vote) on motions;
  3. to nominate candidates and to exercise one vote (or a weighted vote) in elections;
  4. to abstain from voting, or not to use all available votes in a multiple choice vote;
  5. to stand for elected office;
  6. to call a special general meeting;
  7. to have access to the books of the organization;
  8. to guard against infringement of the rules of the organization and of parliamentary procedure.

Breed associations must also be able to function efficiently. Four areas which are key to an effective association are the proper conduct of meetings, voting, committees, and management of the day-to-day affairs of an association. General comment will be made here about each.

Conduct of meetings

Associations must have by-laws which specify the time, place, quorum, procedures for calling meetings and procedures for conducting the business of meetings. Regular general meetings are not generally practical for breed associations representing members across Canada. Most associations have an annual general meeting and the rest of the affairs of the association is conducted by a board of directors which meets more frequently. There may also be regional groups which hold meetings on a regular basis.

Annual general meetings

Annual general meetings provide a forum for committees and officers to report on their activities of the past year. It is important that members hear account from and be able to question the officers on how they administer the affairs of the association. The annual meeting is also where officers are usually elected and committees are struck, unless such has been done in advance by mail ballot. Since the annual meeting tends to be the main gathering of the general membership during the year it is also the best opportunity to discuss the general goals and objectives of the association. Therefore, the Board of Directors, officers and committees should be adequately prepared to present their reports and manage the agenda so as to avoid excessive time being spent on minor details.

Special general meetings

Special general meetings allow a Board of Directors to address particularly urgent issues such as a critical amendment to the constitution or the replacement of an officer. It also permits a group of members who are unsatisfied with the administration of the association to introduce substantive issues or to request reports from officers or the Board. In either case, special general meetings are restricted to considering only those issues specifically on the agenda circulated with the notice of meeting.

Notice of meetings

An association must have by-laws which specify how meetings are called. Notices of meeting must clearly indicate the date, time and place of the meeting. The following are some other issues to be considered for calling of general meetings:

  1. Length of time prior to the meeting should be such as to accommodate normal postal delivery, time for members to review and consider the agenda and time to make travel arrangements at more favourable rates.
  2. Are proxies allowed? If so, proxy forms should be supplied with the notice of meeting.
  3. Is the notice of meeting sent as a separate mailing or accompanying a circular? If it is combined with a regular breed publication, the time required for publication may be an important factor.
  4. How much time is being given to submit proposed amendments and to review proposals? For example, it would be impractical to indicate that a notice of meeting with by-law amendments shall go out the same day as the last day for submitting proposed amendments.

Meetings must serve the broadest interests of the association and it is important to have a proper notice of meeting to ensure members are able to participate fully in the affairs of the association.

Procedural rules

Associations vary in the degree of formality used in meetings. Larger meetings generally require more formal procedures to be followed. Formal procedures help ensure that topics of discussion are properly managed, that the will of the majority is carried out and that the minority is heard and its rights protected. In small committees, by contrast, it is not uncommon to almost completely dispense with formalities.

Meeting procedures should facilitate discussion, full participation and decision making. Therefore, parliamentary rules may need to be adapted to ensure the business of meetings is conducted fairly, efficiently and effectively. Regardless of how meetings are managed, associations must still ensure a proper record of decision is kept. Special attention should be paid to the number of eligible voters, quorum requirements, and if majority vote is obtained to render decisions valid.

Procedures for voting

The objective of a vote is to determine the will of the majority. Votes are held to elect directors and officers, to amend a constitution, to establish adhoc committees or other working groups, to accept reports, to approve changes in administrative procedures and rules or to approve expenditures. Other votes may be taken on procedural issues, bestowing of honourary status, etc. Every association must have by-laws respecting the election of directors and officers and the filling of vacancies.

Certain decisions require a majority approval of two thirds or more of eligible voters, such as for amendments to by-laws. A record of the number of eligible voters present and exact vote counts should be kept for these major decisions. Vote counts should be submitted to Agriculture and Agri-Food Canada with the requests for amendment to the by-laws.

Requirements for amendment of articles of incorporation of an association are covered in sections 20 and 21 of the Animal Pedigree Act. These votes are usually made to change the name of an association or to add or remove breeds. The membership must receive mail-in ballots, over 25% must return the ballots and a two thirds majority must be obtained.

Majority

There are numerous definitions of a majority. Associations should specify the definition of a majority in their by-laws. Is it the majority of votes cast, majority of eligible voters present, or the majority of total eligible members? The voting majority required to elect directors may also differ from that required to amend the by-laws. Agriculture and Agri-Food Canada will request evidence that a majority was obtained before by-law amendments receive approval. Note that by-law amendments, as well as amendments to articles of incorporation, require a two thirds majority vote to be approved.

Proxies

Proxies may be used only if permitted in the by-laws. The conditions under which proxies may be used must be clearly specified. Proxies can be a useful tool in a national organisation where distance is a factor restricting participation. Proxies may also be important to ensure that a quorum can be achieved on votes of major importance. However, they can also be misused if rules are not clearly specified. For example, proxies should clearly specify the meeting for which they apply rather than making them generic. Kerr & King (1984) also recommend, "that an individual should decide on an issue after hearing and participating in the debate. If specific notice of motions and relevant documentation are not received prior to a meeting, it is better not to exercise the vote rather than give a proxy." Proxies may not be used for board meetings.

Mail-in vote

Mail ballots permit the entire membership to vote on an issue rather than only those who attend meetings. National organisations sometimes have difficulty getting strong, representative participation at meetings. This may become a concern when,

  1. voting takes place on a contentious issue where many more people would like to participate than can attend the annual meeting,
  2. meetings are held in a region where positions are suspected of differing from those held nationally, and
  3. meetings are organized at a time or place that may prevent groups of people from attending who could be adversely affected by the amendment.

Rarely is it possible to have meetings which address everyone's needs. Therefore, mail-in votes present an opportunity to reach the entire membership. This may be especially useful for votes on major issues.

If mail ballots are to be used, procedures should be outlined in the by-laws indicating when and how such a vote may be called. There are some drawbacks to a mail ballot. Here are a few concerns that have been raised.

  1. A mail ballot could remove one of the main reasons for attending the annual general meetings. If we have a mail ballot we risk even fewer members participating than now.
  2. Mail ballots cost money. We can't afford to spend more money than we already do on the annual meetings.
  3. The membership needs to discuss the issues before being able to vote knowledgeably. A mail ballot doesn't offer the same opportunity for discussion as a meeting.

These are all valid points. Here are a few ways to address the problems.

  1. Arrange mail ballots to overlap with the timing of annual general meetings. If ballots are sent out with the regular notice of meeting, cost of mailing can be kept to a minimum. The return date for ballots can be after the annual meeting so that attendees have a chance to fully discuss contentious issues and relay the results back to other interested members. Therefore, meetings can still serve as important opportunities for discussing by-law amendments as well as other issues.
  2. Mail ballots should be prepared with accompanying background information and explanation, including a sampling of views (pro and con) on the issue. The membership must be able to make an informed decision. Although it is true that many issues often become clear only after discussion, this may also be due to lack of advance preparation. By having to put an explanation in writing and solicit views and comments of directors and other interested parties in advance, a mail ballot may actually serve to better clarify complex issues for the membership.
  3. The whole membership usually has one opportunity per year to meet as a body. This is a good opportunity to discuss broad policy options, the goals and objectives of the association and to critically assess the association's performance. However, not every association uses the opportunity wisely and some get into endless debates about minor points. Mail ballots require advance preparation, especially by the board of directors, so may allow the annual general meeting to focus more of its effort on policy alternatives rather than administrative, procedural or technical detail.

Committees

Most of the detailed work of an association often gets done in committees. Committees can function in an administrative or executive role, or as advisory bodies. They may be established in the by-laws as standing committees or may be appointed by the board of directors for a fixed period of time or until they have completed their duties. To be effective it may be advantageous to avoid committees which are too big. Too many committees also tend to drain associations which rely on volunteer effort and can be unwieldy to manage for reporting and decision making purposes.

Committees may exercise no authority beyond their terms of reference. Where committees are established in the by-laws of an association, their make-up, functions and reporting requirements should be specified. A more detailed terms of reference can either be included directly in the bylaws or procedures for their establishment indicated in the by-laws. Lack of sufficient detail has sometimes caused problems, for example, where it is unclear if the executive committee or the board of directors should be making certain decisions. Is it obvious where, when and on what issues reports should be made to the board for its decision? Breed associations need to ensure that the by-laws are clear on who has authority to do what.

Committees often operate on an informal procedural basis but are expected to report on a regular basis or as otherwise requested. Therefore, regardless of how informal the meetings may be it is still necessary to have a proper record of proceedings. Committees are directly responsible to the body that creates them.

Management

The by-laws of breed associations establish the broad framework for management of an association but often require further details to be specified. Associations should have some type of policy and procedures manual or other guidelines. This is especially necessary where secretaries act on a volunteer basis and change often. Where a general manager or chief executive officer is hired by a breed association it is still no less critical to clarify how various situations in the day-to-day management of the association are handled. The board of directors is elected by the membership to manage the affairs of the association and must be knowledgable of how it is being done.

Board of directors

The Board of Directors reports to and is directly responsible to the general membership. The board is usually expected to draft policy which can be considered by the membership, to appoint people to carry out specific functions and approve criteria for hiring as necessary, to be responsible for the prudent management of the finances of the association and to carry out specific functions as indicated in the by-laws or otherwise delegated to it by the membership. The composition of the board, the method for election of directors, powers, duties and functions must all be specified in the association by-laws. This means that the board is delegated specific authority by the membership for administration of the affairs of the association between general meetings.

A Board of Directors must act as a body and is governed by the association's articles of incorporation, approved by-laws and the Animal Pedigree Act. The president officially represents the association to outside persons and other bodies. However, no director may act independently on behalf of the corporation unless given specific authority by the board to do so. Decisions of the board made in accordance with its proper authority, are binding upon both the board and the corporation.

Executive committee

An Executive Committee may be established where it is considered too difficult for the full board of directors to meet on a regular basis. It is common for associations to have an Executive Committee which is responsible for the day-to-day affairs.

The membership of the committee is derived from the board and officers of the association. Its powers should be defined in the by-laws or delegated to it by the board, if so permitted in the by-laws. The Executive Committee only has powers as permitted through the by-laws.

Officers

The powers, duties and functions of officers should be specified in the bylaws as should their manner of election. The detailed terms of reference (i.e. job description) of officers may be further decided by the board in accordance with the objectives and needs of the association. The standard list of officers usually includes a president, past-president, vice-president, secretary and treasurer. In smaller non-profit corporations it is not uncommon for the same persons to be directors as well as officers of the corporation.

Liability

The Animal Pedigree Act gives the protection of limited liability (see Sections 14 and 50 of the Act) to officers, directors and employees of an association who are acting on its behalf in good faith. Therefore, although an association can be sued, persons who are acting in good faith in the exercise of their powers or performance of their duties and functions are not personally liable.

Financial liability of members of an association is limited to any fees owing to the association and any amount that may be due in respect of services provided.

Conflict of interest

Conflict of interest is of primary concern where a person uses either inside knowledge not available to others or his position within the organisation to benefit financially. "A director with a personal interest in a matter under consideration by the board must disclose in full what that interest is and usually will be required to abstain from voting on that matter. It has become common practice for a director with a conflict of interest to leave a meeting while the matter is under consideration." (Stanford, 1995)

Association directors and officers must also be cautious about how they handle inquiries to purchase breeding stock. Although it is not usually practical or advisable to forward incoming purchase and sale inquiries to every member, the association should have procedures in place to give every member a fair opportunity to benefit. Increasingly, electronic communication is giving more options to breed associations and these opportunities should be explored. The benefits as well as obligations are expected to accrue to the whole of the membership, not just to directors and officers of the association.

Frequently asked questions

If we send out notices for our Annual General Meeting two days late does that invalidate the meeting?

By-laws are established for a number of purposes, not the least of which is to standardize good practices. For example, if cheaper airflights require booking 30 days in advance, mail takes up to a week to deliver and people require one to two weeks to make arrangements and consider whether or not they can attend a meeting, 60 days notice may be reasonable. Many by-laws are drafted and approved by the membership exactly because they make good practical sense, not because 60 days is such a magic number.

However, once written into the by-laws they become more than just good ideas and they bind every member. It is expected that rules and procedures adopted by the association will conform to the by-laws. Nevertheless, when certain requirements are not met for reasons beyond the control of the association, a judgement call may be necessary. What procedures or circumstances were responsible for the delay? Was this a simple oversight or does there appear to have been intent to manipulate? Were there consequences of the delay that affect decision making? Was it really the intent of the membership which approved the by-law that an Annual General Meeting should be cancelled if notices were sent out at 58 days? Although these considerations may sound reasonable, technically any member also has a right to object to an improperly called meeting and decisions made at a meeting may be considered invalid.

The rules of eligibility for registration don't make sense and the board of directors wants to change them. Can they do that without first going to the membership?

No. The board is bound by the by-laws as is every other member. There are three types of by-laws which must be spelled out in detail. Requirements for membership, rules of eligibility, and procedures to be followed in applications for registration all must be clearly detailed in the by-laws. The board of directors may make proposals to the membership in respect of their amendment but may not act contrary to them. The board remains bound by the by-laws which has been approved by the Minister.

There are other by-laws which may not contain sufficient detailed specifications to account for every situation which may arise. In these cases, the board is delegated authority through the by-laws to administer the affairs of the association. However, its decisions should remain consistent with the established procedures of the association and its objectives.

Annual checklist for information to be supplied to Agriculture and Agri-Food Canada

[Note: Where the Act specifies that certain information is to be sent to the Minister, it should be sent care of the Animal Registration Officer who acts on the Minister's behalf. It should not normally be sent directly to the Minister.]

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