(James Paterson is a Senior Associate of Anzarut & Holm Lawyers, as well as a member of the Carlton Football Club. James can be followed on twitter: @patersonlaw or http://twitter.com/patersonlaw)

With the Melbourne and St. Kilda Football Club's presenting accounts to members last week, the AFL's Annual General Meeting season has almost passed, albeit the most controversial of these meetings, North Melbourne - which  includes Peter de Rauch's challenge to gain a seat on the board - still waits for a week or two as their proxy vote battle continues.

St. Kilda aside, these various club meetings have passed without attracting much media scrutiny, leaving me to question whether AFL club AGM's are important and whether they should still warrant our attention.

Actually, if you care about the strategic direction of your club, yes.  

While there is often a focus on the time and emotional investment made by supporters in their club, membership also brings with it some core legal rights which are typical to other investments, such as shares in listed companies.  Consider just some of the events that members of some clubs can influence at formal general meetings (illustrated by way of a hypothetical club):

*   The president of the Northcote Football Club, a team based in the north of Melbourne, announces that the club intends to trade under a new business name, the "Northern Kings".

If this were the Brisbane Lions, the move would require greater than 75% member approval.  Members of the Sydney Swans, however, would not have an opportunity to review or approve. 

*    The CEO of the club announces a sponsorship deal with a recycling company, whereby the club changes its traditional blue and white striped jumper to play all "away" games wearing green.

If this were Geelong, more than 75% of the members would first have to approve the new jumper before the directors could pursue that strategy.  Members of, say, Melbourne would not be entitled to have a say in the decision.

*    After a year of playing in the competition as the "Northern Kings", the club announces that it intends to move to the Northern Territory and play home games in Alice Springs - along with a $10 million ‘relocation assistance' grant from the AFL.

If this were Essendon, the members would first have to approve the decision.  Members of Carlton would not necessarily have an opportunity to review or approve that decision.

These are not abstract events and many members have already seen changes to their clubs in recent years - the Footscray Football Club Ltd now trades under the name "Western Bulldogs", many clubs are increasing the number of ‘home' games played in areas such as Tasmania and the Northern Territory, and we have seen a wave of new ‘alternative' jumpers released of late.

Whether the decisions of the directors are popular or not, I suggest most AFL club members would want to be consulted and participate in those decisions - and thanks to the corporate structure of most AFL clubs, members of certain clubs are able to help shape that strategic direction.

AFL clubs have, in the past, experimented with private ownership through proprietary limited companies (eg Sydney and Brisbane), and through listings on public markets (eg North Melbourne and West Coast).  Most clubs now take the form of public companies limited by guarantee - with members typically being afforded the right to attend and vote at general meetings, but usually expressly excluding the member from any payment of dividends from capital surpluses the club may obtain through its operations.  This structure also has the potential to provide significant tax concessions for the club. 

In addition to proprietary benefits (such as entry to the ground) this ownership structure has the potential to deliver significant legal rights to members through the Corporations Act 2001 (Cth), under common law principles, as well as under the terms of each club's constitution - many of which readers would expect to receive were they shareholders in, say, Telstra.

In researching a paper recently published in the Company and Securities Law Journal, I determined that the terms of each clubs constitution can vary widely.  This review has identified a number of core member rights which, from a best practice corporate governance perspective, I consider should be included within an AFL club's constitution, namely:

·         the ability for members to vote at general meetings of the club and to elect directors;

·         advance publication by the club of the existence of members' voting rights, as well as the ability to seek nomination to the board;

·         equality of votes for members, with a casting vote for the President;

·         meeting of members to have a quorum of 100 members or more;

·         participation in determining any changes to a club's name, team colours, or location of the club's home ground, rather than those matters being determined only by directors;

·         a special resolution approval requirement in order to merge with another AFL club. 

While most AFL clubs already afford many of these rights and perform such disclosures to members, even Essendon, which I consider to be the AFL's most transparent, does not provide all of these recommended items.   For example, many would assume that being a club member allows you to vote to determine the board of directors - not necessarily so, particularly for members of teams based in SA or WA.

The South Australian National Football League (SANFL) - the state based governing body for football in SA - is the legal ‘member' of both the Adelaide and Port Adelaide football clubs - as is the corresponding state body in WA, the West Australian Football Commission (WAFC), for the ‘Eagles' and ‘Dockers'.  As such it is those bodies, not the club membership ticket holders, which hold the core legal rights under those club's constitutions.

While Adelaide, Port Adelaide and Fremantle have recently extended voting rights to provide minority board representation to their club members, this does not extend to voting on other issues considered at general meetings.  That is, however, a large step ahead of the West Coast Eagles, where club members are afforded no voting rights at all, placing them last on the member transparency ladder.

Where does your club rank? Click here to link through to the table from the published journal.

A counter-argument could be mounted that as the SANFL and WAFC are themselves companies comprised of community membership based on its local football organisations, the general SA and WA public interested in football still determines the fate of their AFL clubs. 

However, using SA as a representative example, that would require members of the Adelaide or Port Adelaide Football Clubs  to also take up a membership of one of the local SANFL clubs in order to exercise that right - greatly diluting their voting power and influence.  Further, it is unlikely that the interests of particular members of SANFL (in particular the local Port Adelaide "Magpies" Football Club), are completely aligned with the interests of the "paid up" members of the Adelaide "Crows" Football Club -providing a less than ideal structure.

The newest AFL clubs, the Gold Coast Suns and the GWS Giants, have been established as companies limited by guarantee, providing a stark contrast to the expansionist 1980s. This illustrates the AFL has begun to understand that clubs need a strong community based membership platform to obtain long term success.  The Gold Coast is further solidifying this connection by requiring its players become members of local surf clubs to perform community services.  It is yet to be seen whether their members will also be provided with strong constitutional rights.

Some AFL clubs have taken pro-active steps to seek and respect the opinion of members on various issues through email opinion surveys, but this is often not reflected in constitutional rights for members on such core strategic issues.  However, the lack of awareness of members of these rights - or in some cases, lack of rights - illustrates further work is required.

So what can be done to change this situation? Given the AFL's existing partnership with Telstra, perhaps an initial step is for AGMs to be webcast to provide access for more individuals, as well as allowing electronic voting by proxy.

Ultimately, however, it is up to members as to whether their club adopts all, some, or even any of the best practice recommendations, in order for the club to treat members as key stakeholders, and ensuring a more transparent football club.