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Thread: 9. POLICY DISCUSSION: Compliance with new NFP (Not for Profit) Rules

  1. #11
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    It's more than that. The mechanism of how the "Class A Memberships" are granted needs to be DEFINED.
    1) How many class A memberships are there?
    2) How are they granted?
    3) What is the duration of the memberships?

    If it is a policy and if policies are defined by the executive, then a CFC Executive could appoint or remove these memberships arbitrarily. This is not acceptable.


    There should be a bylaw stating that
    1) The number of Class A members is equal to the total membership/50, alloted by province/territory.
    2) The class A members are formally nominated by the class B members in each province/territory, through the policies of organizations within each province/territory.
    3) In the event that no class A members nominated by class B members within a province/territory, the existing class A members can nominate class A members from that province/territory on behalf of that province/territory.
    3. All formal nominations are granted without exception at the annual general meeting, provided that the nominee already has valid class B membership.
    4) The duration of a class A membership is until the AGM of the following year.

    With respect to life class A memberships, I don't think we should have them. Active life governors can easily be elected in the provincal AGMs, simply by raising their hands. If we want to grant persons the ability to provide advice as senior statesmen, there are ways that do not give them voting privledges in perpetutity without election.

  2. #12
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    The governors have already passed the bylaws which you are now objecting to. The present special resolution and articles are simply seeking permission from the governors for the members of the board to seek to apply to continue the Chess Federation of Canada under the new act. If we are not given this permission then we are not allowed to apply to do this and the CFC ceases to exist on October 17th unless other arrangements are made. I made a commitment at the beginning of this process to preserve the CFC as it is currently structured for good or ill. I believe that this resolution will ensure survival of the CFC in its present form. Will we be done when we get the government's blessing? No. There is still much to be done we need to rewrite everything in the handbook in a more sensible way.

    It is simply not possible in the time we have left to completely rewrite the handbook and make it compliant and submit it to the government. To attempt that with our current resources and available time frame is a recipe for guaranteed failure of our application. There is an additional piece of information which I will be announcing shortly which will also have a significant impact on my free time between now and the AGM. Be careful that you don't initiate with a flapping of butterfly wings a perfect storm which results in the demise of the CFC particularly when we are so very close to finishing that process.

    Garland, I suggest that you draft a policy with respect to the Class A Memberships which will bind the CFC members and board members and get someone to second it. If you don't feel up to the task I will even do it and then ask someone else to take up sponsorship of the measure as we have done with the additional award proposed motion. We can extend the meeting if need be. You can even call it a bylaw which we will submit to the government after we get our continuation. Bylaws submitted outside of the initial submission will not be examined by the government for compliance and will simply be added to our file.

    My understanding is that everything in our submission will be carefully scrutinized and can result in the rejection of our application if it is not compliant with the act. It is not clear to me that they will even tell us what is wrong with our application. I am fairly certain that if the present membership and governor related bylaws were submitted with terminology changes that our application would simply be rejected. There is also the possibility that if we submit our present bylaw with the words suitably changed to reflect the current terminology that just maybe the government would be lazy and not read it and approve it and then some enterprising Class B member could take us to court and simply force one man/one vote rule by all of the members based on the fact that you can't have voting and sometimes voting members under the new not for profit act. You can only have voting and non-voting members.

    If you want to eliminate life governors, a few of whom are active and perform very useful functions then you could bring in a constitutional amendment to do so either now under the old constitution and bylaws or in the future under the new bylaws and NFP act provisions. My suggestion to you is that if that is what you want that you do your own dirty work. My aim is to simply ensure that the CFC survives in its present form. Much was made at some point that we couldn't have life governors under the new act but that turned out not to be the case. My suspicion was that some people wanted to eliminate the life governors without having to go through a messy process to remove them. You need two thirds of the governors including the life governors to agree to this. I will not facilitate a quick and easy process to eliminate the life governors. That would go against preserving the CFC, as is, warts and all.

    Personally I think a one person, one vote system for all the members as they have in the USCF would make some sense but I am not going to set it up by putting a cynical poison pill in our initial bylaw and achieve it via the back door.

    I do not think that the number of Class A voting members should be defined in any more detail than the governors are now.


    Quote Originally Posted by Garland Best View Post
    It's more than that. The mechanism of how the "Class A Memberships" are granted needs to be DEFINED.
    1) How many class A memberships are there?
    2) How are they granted?
    3) What is the duration of the memberships?

    If it is a policy and if policies are defined by the executive, then a CFC Executive could appoint or remove these memberships arbitrarily. This is not acceptable.


    There should be a bylaw stating that
    1) The number of Class A members is equal to the total membership/50, alloted by province/territory.
    2) The class A members are formally nominated by the class B members in each province/territory, through the policies of organizations within each province/territory.
    3) In the event that no class A members nominated by class B members within a province/territory, the existing class A members can nominate class A members from that province/territory on behalf of that province/territory.
    3. All formal nominations are granted without exception at the annual general meeting, provided that the nominee already has valid class B membership.
    4) The duration of a class A membership is until the AGM of the following year.

    With respect to life class A memberships, I don't think we should have them. Active life governors can easily be elected in the provincal AGMs, simply by raising their hands. If we want to grant persons the ability to provide advice as senior statesmen, there are ways that do not give them voting privledges in perpetutity without election.

  3. #13
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    Default Proposed CFC Policy with respect to class A voting members

    It is the policy of the Chess Federation of Canada that upon transition to the new not for profit act all governors shall immediately become class A voting members as described in the current CFC bylaw with their term ending at the next AGM as has been the usual practice for many years for the governors. Life governors who remain active will continue to be reappointed to a one year term as class A voting members as long as they remain active within the last two years. The CFC will not appoint new life governors unless the class A voting members decide to do so. It is proposed that class A voting members at the 2014 AGM and beyond be elected in the same manner that governors were elected in the past through the provincial associations as described in the handbook. This policy can be changed only by a two thirds majority vote of the class A voting members at a meeting of the Class A voting members.

    I propose that the above become the policy of the Chess Federation of Canada upon successful adoption by two thirds of the governors voting at this meeting. I further propose that upon successful adoption this motion have force as a bylaw which will be submitted to the government as required by the new not for profit act. I suggest that we form a committee of class A voting members to propose a new NFP act compliant process for election of Class A voting members to replace this policy.

    Comments?
    Last edited by Vladimir Drkulec; 04-08-2014 at 09:10 PM.

  4. #14
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    Default More from Pierre

    Pierre is concerned if I understand correctly that only a committee of directors can be delegated any of the powers of the directors and if I understand his concern correctly that we can't have committees of non-directors (ie voting members). I see mention of committees of members in two places in the new NFP act so while they can't exercise the powers of directors I don't see how that impacts the formation of committees of voting members. I think that it is fully reasonable that committees and their members cannot be delegated the power of directors. I don't see how this is a problem. It would have to be pointed out to me how the ability to grant committees such power would be desirable.


    Quote Originally Posted by Pierre Dénommée
    It is not in the regulation, it is in the Act itself. It is at Article 138 of the NFP act http://laws-lois.justice.gc.ca/eng/a...ight=138#s-138.

    Quote Originally Posted by Vladimir Drkulec
    Quote Originally Posted by Pierre Dénommée
    Hi Vladimir,
    Quote Originally Posted by Pierre Dénommée

    Article 138 138. (1) Directors of a corporation may appoint from their number a managing director or a committee of directors and delegate to the managing director or committee any of the powers of the directors.

    Only a committee of directors can have a delegation of power.
    Again I don't see this in the regulations associated with the act.

    It is even worst under Quebec Laws because the Executive is the only committee that can have a delegation if authority. Quebec courts have always interpreted article like that restrictively: if it is not written in the Act, the director have no power to delegate authority.

    Life members deserve a special class of members because they have paid for a service. If the CFC ever close, those members should recover some money from the foundation before all other members.
    In the event of a wind up the members will get nothing beyond possibly a refund of the outstanding balance of their memberships. The life members will have to get a pro-rated refund. They will be creditors of the CFC. The Executive Director would get whatever they are entitled to under their contract. Everything else would go to one or more registered charities and not to the voting members or non-voting members. This is not a realistic scenario.

    I do no see how to guarantee that without a separate class of member.


    I think the possibility of a class action lawsuit will be enough to guarantee fair treatment. I don't think that it is reasonable to spend to much time on a possibility which is quite remote.

    Most separate votes can be withdrawn by careful writing of the Act of Incorporation. For all other members, including honorary, the sole difference between those members is the length of the membership, the price and the age restriction.

    If we do not know who is a life member, we have a serious problem.
    We do know who they are but we may not be sure that they are still among the living in all cases nor are we guaranteed to know how to contact them.

    Some bylaws changes should required prior authorization from the member before becoming effective: for example terminating the affiliation with FIDE. If FIDE is notified that the CFC is withdrawing, they may not wait for voting member disapproval before naming a successor.
    Again this (terminating affiliation with FIDE) would make little sense from the point of view of the CFC unless FIDE went crazy and started passing rules and requirements which were clearly not possible for the CFC to meet. The act covers most of the rules and procedures required of not for profit corporations. It is not possible to anticipate every contingency.

    The core problem is that repelled bylaws ceased to be in force only at the date of the vote and that any decision taken while the modified bylaws were in effect are not changed. For example, if the Olympic Selection bylaw is modified by the board of directors and later the governors refuse the change, the already selected member of the Olympic team would remain unchanged. It is not within the authority of a voting member to choose the national team. If the directors try to rescind the national team nominations, they could get sued.

    Pierre
    The voting members will have to ensure that they vote for board members who do not make inexplicable decisions.

    I will continue to share this conversation with the governors.

  5. #15
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    Default More discussion with Pierre

    Quote Originally Posted by Pierre Dénommée
    You are totally right that Class A members designation must be specified in the Act of Incorporation. The proposed text give the directors absolute power on the nomination of class A members which is totally unacceptable. The directors could nominate any number of class A members, totally unrelated to the number of class B member and totally unrelated to the vote of the class B members.


    The proposed text is also inadequate because it fails to mention the Chess Foundation of Canada whose purpose is to protect the money of the Life Members. If the CFC close after a life member has paid 500$, he should get something back. There is nothing in the text to ensure that.


    The CFC created by this text will have no structures: no NAC, no Ethics Committee, no Olympic Commitee, no Chess Foundation and so on. Any real organization has a permanent structure that that is protected from modification by the directors.
    I believe that my proposed policy for the election of class A voting members addresses these concerns without unnecessarily jeopardizing our application for a continuation or taking us to a situation of unnecessary brinksmanship which could lead to our doom. Hopefully we can convene a committee of governors/class A voting members to address the issue and develop a long term solution. Note that each of the provincial associations will need to transition to their own new not for profit acts and these will in all likelihood have some significant impact on the way the provincial associations operate.

  6. #16
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    Here is my draft of a bylaw addressing the memberships. Tell me if it works or doesn't and why.

    If you read it, you will note only one change in substance to what is written in the current handbook, the replacement of governors/class A members. Instead of granting the President power to grant membership, the membership will remain vacant. I thought it would be cleaner.

    I even left in Life Governors, although I do not like it. I've put it in to ensure more support from the existing body of governors.

    In any year the number of class A members eligible per province or territory will be one class A member for the first fifty or part thereof of class B members in said province or territory as of April 30 of the immediately proceeding fiscal year, and one additional class A member for each subsequent fifty or part thereof.

    Class A members will be nominated by provincial or territorial affiliated associations. All persons nominated must be class B members in good standing, must be a Canadian Citizen or a landed immigrant in Canada, and must be 18 years of age or over to qualify.

    The Executive Director, full-time employees of the Chess Federation of Canada, and any part-time employees who receive a substantial fraction of their income from such employment are inelegible for Class A membership.

    All those nominated for Class A membership shall be granted class A membership effective at the convening of the incoming assembly of the annual meeting of the Chess Federation of Canada. Class A membership lasts for approximately one year until the commencement of the incoming Assembly at the annual meeting in the following year.

    Where a provincial or territorial association fails to nominate someone for class A membership, then the existing class A members may nominate some or all of that province's or territory's Class A members at the annual meeting, or may defer the decision to the President.

    In addition the following persons are also granted class A membership provided said person also fufills the requirements for class B membership.

    - the past Presidents of the Federation who have served as President for at least two full terms. A term is that period between one annual meeting and the next.

    - the past Presidents of the Federation who have served as President for at least one full term in the immediately preceding five years.

    - the chairman of the Board of Trustees of the Chess Foundation of Canada.

    - the President of the Canadian Correspondence Chess Association.

    - the reigning Canadian Closed Champion.

    - the runner up at the Canadian Closed.

    - the past Presidents granted the life title of Governor at Large as at September 1994.


    Any class A member who has failed to maintain class B membership status shall have his/her voting privileges suspended. Once suspended, the member and related provincial association shall be notified and requested to bring his/her membership into good standing not later that 30 days from his/her expiration of membership. In the event that the membership is still not in good standing 30 days after suspension, the membership will be revoked.

    If at any time between annual meetings a person loses class A membership status, the membership remains unfilled until the next annual meeting.

  7. #17
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    Quote Originally Posted by Garland Best View Post
    Here is my draft of a bylaw addressing the memberships. Tell me if it works or doesn't and why.

    If you read it, you will note only one change in substance to what is written in the current handbook, the replacement of governors/class A members. Instead of granting the President power to grant membership, the membership will remain vacant. I thought it would be cleaner.
    I would be interested in what the governors say about this. I don't feel strongly on it one way or another. I think the president or board should be able to appoint someone as Masters representative or fundraising coordinator if a viable candidate presents themselves in the absence or resignation of the current officeholder.

    I even left in Life Governors, although I do not like it. I've put it in to ensure more support from the existing body of governors.

    In any year the number of class A members eligible per province or territory will be one class A member for the first fifty or part thereof of class B members in said province or territory as of April 30 of the immediately proceeding fiscal year, and one additional class A member for each subsequent fifty or part thereof.

    Class A members will be nominated by provincial or territorial affiliated associations. All persons nominated must be class B members in good standing, must be a Canadian Citizen or a landed immigrant in Canada, and must be 18 years of age or over to qualify.


    I am not sure that they call newcomers landed immigrants anymore but if we can find and substitute the correct term....

    The Executive Director, full-time employees of the Chess Federation of Canada, and any part-time employees who receive a substantial fraction of their income from such employment are ineligible for Class A membership.
    I corrected a spelling mistake. I am not sure that I agree with this and could present a problem under certain circumstances.
    This provision could be considered problematic as it directly contradicts provisions of the NFP act though they may be talking about the board and not members. That may still be okay but it might generate a problem. I would have to consider its implications carefully.

    As a purely hypothetical situation supposing at some point in the future we consolidate the offices of the CFC and FQE. Further supposing we continue with the CFC/FQE agreement beyond its expiry this summer. The FQE currently gets to appoint three voting members/governors under that agreement. Supposing that they ask to appoint someone who works in the combined office.

    What is the advantage of this provision to the CFC?

    All those nominated for Class A membership shall be granted class A membership effective at the convening of the incoming assembly of the annual meeting of the Chess Federation of Canada. Class A membership lasts for approximately one year until the commencement of the incoming Assembly at the annual meeting in the following year.

    Where a provincial or territorial association fails to nominate someone for class A membership, then the existing class A members may nominate some or all of that province's or territory's Class A members at the annual meeting, or may defer the decision to the President.

    In addition the following persons are also granted class A membership provided said person also fufills the requirements for class B membership.

    - the past Presidents of the Federation who have served as President for at least two full terms. A term is that period between one annual meeting and the next.

    - the past Presidents of the Federation who have served as President for at least one full term in the immediately preceding five years.

    - the chairman of the Board of Trustees of the Chess Foundation of Canada.

    - the President of the Canadian Correspondence Chess Association.

    - the reigning Canadian Closed Champion.

    - the runner up at the Canadian Closed.

    - the past Presidents granted the life title of Governor at Large as at September 1994.

    Any class A member who has failed to maintain class B membership status shall have his/her voting privileges suspended. Once suspended, the member and related provincial association shall be notified and requested to bring his/her membership into good standing not later that 30 days from his/her expiration of membership. In the event that the membership is still not in good standing 30 days after suspension, the membership will be revoked.

    If at any time between annual meetings a person loses class A membership status, the membership remains unfilled until the next annual meeting.



    With minor tweaks that could be a our new policy and submitted as a bylaw. I would suggest that it require two thirds adoption by the governors at this meeting and further that it NOT be included with our initial submission for continuation (transition) because of the danger that it could cause our application to be rejected. Regardless it would apply immediately if accepted by the governors by a two thirds margin.
    Last edited by Vladimir Drkulec; 04-08-2014 at 11:11 PM.

  8. #18
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    Quote Originally Posted by Vladimir Drkulec View Post
    I am not sure that I agree with this and could present a problem under certain circumstances. This provision could be considered problematic as it directly contradicts provisions of the NFP act though they may be talking about the board and not members. That may still be okay but it might generate a problem. I would have to consider its implications carefully.

    As a purely hypothetical situation supposing at some point in the future we consolidate the offices of the CFC and FQE. Further supposing we continue with the CFC/FQE agreement beyond its expiry this summer. The FQE currently gets to appoint three voting members/governors under that agreement. Supposing that they ask to appoint someone who works in the combined office.

    What is the advantage of this provision to the CFC?
    Glad to see that my input is useful.

    I tried to follow the handbook wording as closely as possible:

    13. Any Ordinary or Life Member, who is a Canadian Citizen or a landed immigrant in Canada, and who is 18 years of age or over, is eligible to be nominated and elected to the position of Governor [as amended by Motion 84-24; see GL November 1983, p. 16] representing the organization of the Province in which he resides. The Executive Director, full-time employees of the Chess Federation of Canada, and any part-time employees who receive a substantial fraction of their income from such employment, may not become Governors or Officers of the Chess Federation of Canada.

  9. #19
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    Quote Originally Posted by Garland Best View Post
    Glad to see that my input is useful.

    I tried to follow the handbook wording as closely as possible:

    13. Any Ordinary or Life Member, who is a Canadian Citizen or a landed immigrant in Canada, and who is 18 years of age or over, is eligible to be nominated and elected to the position of Governor [as amended by Motion 84-24; see GL November 1983, p. 16] representing the organization of the Province in which he resides. The Executive Director, full-time employees of the Chess Federation of Canada, and any part-time employees who receive a substantial fraction of their income from such employment, may not become Governors or Officers of the Chess Federation of Canada.
    I'm glad that you're engaged in the process. At times I get the feeling that I am only talking to myself. Hopefully we can get some feedback from other governors and maybe get a seconder for a motion.

  10. #20

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    The term "landed immigrant" has been replaced by "permanent resident."

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