EC Violates Financial Disclosure Regulations Ahead of AGM

Horse Sport’s sources have revealed that Equestrian Canada is in violation of at least two sections of Canada’s Not-For-Profit Act in the lead up to their AGM scheduled for Monday, September 25th.

The NFP Act requires EC to send members (NFP-Act Article 175.1) the financial statements between 21 to 60 days (NFP-Regulations 77) before the day on which the AGM is held. Accordingly, Voting Members should have received the information by September 4, 2017, but EC emailed the year-end financial statements on the evening of Friday September 22nd. Not only does this put Voting Members in a very difficult position to fully review and formulate any questions they may have during this Agenda discussion, it is also a violation of Canada’s Not-For-Profit Act.

The late receipt of financial statements is also surprising given that EC issued a statement three months ago stating that they were “on plan to finalize its financial statements for 2016/2017,” and that “a copy of the 2016/2017 financial statements and 2017/2018 budget will be published prior to the commencement of the audit.”

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The delay in sending out the financial statements has also impacted the Voting Members’ right to request that the Auditor attend the AGM. According to the NFP Act (Article 187.2), any Director or Voting Member is entitled to request that EC’s Auditor attend the AGM in order to answer questions as it relates to their duties. However this must be done no less than 10 days before the AGM is to be held which would have been September 15, 2017 (NFP-Regulations 82). Given that Voting Members were not given the financial statements until 72 hours prior to the AGM, this may have had a negative impact on any Voting Member wishing to exercise this right.

Despite the oversight, EC’s Financial Controller, Robert Westgarth, commented that it was likely that the Auditor will attend. “It is standard practice for EC to invite the public accountants who worked on the audit to the AGM and they were included in the communications about the meeting tonight as they have been sent out. I also contacted the audit lead staff from KPMG and she anticipates being able to join the AGM today.”

New Beginnings

The annual general meeting is a yearly gathering of an organization’s stakeholders, where Directors present annual reports regarding performance and strategy. Historically, it has been an opportunity for members and the community to come together in order to ask questions, gain a better understanding of the organization’s workings, and bring forth issues important to the community.

In the press release announcing the AGM, EC gave the community just five days to submit questions and included the unusual stipulation that questions be governance-related only. In addition, the Board is restricting questions from Voting Members to only two questions each per category during the AGM. Such limitations for a meeting of members isn’t required by either EC’s Bylaws or the NFP Act and puts into question the Board’s intent to engage and be transparent.

For the first time, EC will be livestreaming the AGM using Facebook Live. This is a very encouraging move on behalf of the federation to follow in the footsteps of its federation colleagues who have been doing this for a number of years (FEI and USEF to name just two).

What’s on the Agenda?

An AGM agenda can include any topic, but at minimum must include:

The adoption of the previous year’s AGM minutes;
Report from the EC Audit Committee;
Acceptance of Financial Statements from the previous fiscal year (in EC’s case, this runs from April 1 – March 31);
Appointment of Auditors;
Introduction of Board of Directors for the coming year.

While Registered Participants no longer have a direct voice at the AGM (this was replaced during the 2015 Bylaws Vote with the 3 Category/27 Member voting structure), they are entitled to attend any Meeting of Members which is not in camera (EC Bylaws Article 5.7). Since they came into effect, this will be one of the few times EC has followed its 2015 Bylaws and are allowing Registered Participants to attend a Meeting of Members.

As per EC Bylaws Article 4.9.b, the new board takes over tonight at the conclusion of the Annual General Meeting. The entire equestrian community will undoubtedly be watching closely for signs of positive change to the way business has been conducted over the past few years.

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