Do we have to send financial statements to every member before the AGM?

Dear Agony Uncle,

I work for a men’s health organisation. Each year, at our AGM, we table our financial statements. All 800 members of the organisation are advised of the AGM and are invited to attend. Perhaps because of the boring nature of AGMs, only about 60 people actually turn up, and these all receive a copy of the financial statements (profit and loss and balance sheet). We also say in the email to all members that they can see the financial statements at the organisation’s office if they wish to review them.

Is there any law which states that all 800 members must be sent the financial statements along with the AGM agenda and invitation to attend? I feel that if we send it to all members we are only going to have to spend quite some time explaining bits and pieces to them, and this will waste office staff time. Do we have to send the financials to everyone or can we just table them at the AGM for anyone who turns up?

Agony Uncle's answer

Well, the strict law of it is no, you don’t have to send them out, you can just table them at the meeting. Specifically, most of the state Associations Acts (check your own state on Austlii.com.au) say something like this from NSW:

At each annual general meeting of a Tier 1 association, the association's committee must cause:

(a) the association's financial statements for the previous financial year, and

(b) the auditor's report for those statements,

to be submitted to the meeting.

So, there’s nothing said about using mail (or email or web pages or anything modern, cheap, and easy) to distribute the financials.

That said, I really think you’re both exaggerating the load on the office of putting the financials up on your website (or emailing them out) and minimising the advantages. ICDA generally recommends as much transparency as isn’t impossibly inconvenient, and I would say that this falls on ICDA’s side of that line. If only 60 people come to the AGM, that suggests that the other 740 are reasonably satisfied and wouldn’t be badgering you daily. You don’t want anyone to think you have anything to hide. You may have something to hide, of course, but even then if you’re putting controversial financial items (“$20,000 to defend board chair’s assault charges”) into your reports you’re probably doing it wrong and should rephrase them (“$20,000 for legal advice on compliance policy”).

Making members come to your office to read the accounts seems likely to irritate them into being confrontational when they might otherwise not be, and seems if anything counterproductive.

In summary: you needn’t, but you probably should anyway.

Best wishes,
Agony Uncle.