The AGM of Cape Town Tourism was so bizarre, that it has taken some time to understand exactly what happened on Thursday evening at the Cape Town International Convention Centre. It appears that a number of aspects of the AGM are unconstitutional!
Having been a Board member and Deputy Chairman of the previous section 21 Cape Town Tourism until 2004, and having seen the power of the City of Cape Town in using its financial funding muscle to achieve what it wants, I went back to the Constitution of Cape Town Tourism, reading the version last updated after the AGM in 2011 (the resolution amending some typing errors in the Constitution, ‘approved’ on Thursday evening, has not yet been implemented). I discovered the following AGM procedures to be in breach of the Constitution of Cape Town Tourism:
1. Clause 8.1.2 states: “The notice convening the annual general meeting must state in broad terms the business to be transacted at the meeting and must specify the terms of any resolutions to be proposed”. The wording of the clause seems clumsy, but it would appear to mean that members should receive the resolutions when they receive the notice of the AGM. This was not the case, making the adoption of the Resolutions by show of hands at the meeting unconstitutional.
2. Even more odd was that no Annual Report was presented nor adopted at the meeting, the constitutional requirement (clause 126.96.36.199) being that ‘the presentation and adoption of the annual report of the Chairperson of Cape Town Tourism and the budget and business plan for the forthcoming year‘. As reported, outgoing Chairman Ian Bartes spent most of his talk focusing on the City of Cape Town’s changed Budget allocation of R36 million (from R42 million), and the removal of the Destination Marketing responsibility from Cape Town Tourism. He did mention that staff costs had reduced by 3%, and all other costs by 4% in the past financial year, and intimated that retrenchments may be on the cards, in answer to a question. No Business Plan was presented.
3. Similarly, in clause 188.8.131.52, ‘the consideration of the draft annual financial statements of Cape Town Tourism, as approved by the Board’ is specified in the Constitution, but no motion was moved to adopt the Financials!
4. The biggest shock of the AGM was the announcement that Cape Town Tourism is to lose its role of Destination Marketing, and has been left with only the duties of ‘Tourism Marketing’ and Visitor Information Services. Clause 5.1 of the Constitution defines the role of Cape Town Tourism as follows: ‘The main object of Cape Town Tourism is to provide destination marketing services and visitor services and thereby to provide services for the benefit of Cape Town Tourism members and the wider tourism industry’. ‘Destination Marketing’ is the role allocated to Cape Town Tourism, and there is no reference to a separate category of ‘Tourism Marketing’! In 2008 the members of Cape Town Tourism had voted to accept Cape Town Tourism’s expanded role of Destination Marketing, which had led to the appointment of a Marketing Manager (the current incumbent is Velma Corcoran).
The City’s decision to take ‘Destination Marketing’ away from Cape Town Tourism is therefore in breach of the Constitution of Cape Town Tourism. I challenged Mr Groenewald about this after the AGM, and he quickly responded that the resolutions presented at the AGM had taken care of this. There was no mention of a resolution relating to the changed role of Cape Town Tourism at the AGM. This is the record of the 2012 Resolutions on the Cape Town Tourism website:
“RESOLUTIONS TO BE TABLED AT THE ANNUAL GENERAL MEETING OF CAPE TOWN TOURISM (“CTT”) TO BE HELD AT THE CAPE TOWN INTERNATIONAL CONVENTION CENTRE ON 18 OCTOBER 2012
That, in terms of clause 15.2.1 of CTT’s Constitution (“the Constitution”), membership fees for the 2013/14 financial year be increased by 6.5% (six comma five percent).
That, in terms of clause 16 of the Constitution, the following allowances and re-imbursements be paid to the members of the Board of CTT for the 2013/14 financial year:
2.1 Allowance: R400.00 per month;
2.2 Travel and parking: in accordance with CTT’s conditions of service for staff members.
3. Appointment of auditors
That, in terms of clause 15.5 of the Constitution, PKF be re-appointed as the auditors of CTT for the 2013/14 financial year.
That the following amendments to the Constitution be approved, with effect from 18 October 2012:
4.1 By the deletion of clause 1.3 and its replacement by the following:
“In 2011 and in 2012 it was decided by the members of Cape Town Tourism to effect further
amendments to the Constitution. These amendments have been incorporated in a revised
Constitution, approved as provided for in clause 20 hereof.”
4.2 By the deletion in clause 5.2.2 of the words “Destination Marketing Organisation, known as Cape Town Routes Unlimited (“CTRU”)”, and their replacement by “Destination Marketing, Investment and Trade Promotion Agency for the Western Cape, known as WESGRO (“WESGRO”)”.
4.3 By the deletion in clause 184.108.40.206 of “far” and its replacement by “for”.
4.4 By the deletion in clause 8.2.2 of “Specify” and its replacement by “specify”.
4.5 By the deletion in clause 14.2 of “6 (five)” and its replacement by “5 (five)”. 4.6 That the designation at the end of the Constitution be deleted and replaced by the following:
“Thus adopted unanimously at a special general meeting of Cape Town Tourism held at the Ritz Hotel, Sea Point on 14 August 2008 and amended at the Annual General Meetings of Cape Town Tourism held at the Cape Town International Convention Centre on 17 October 2011 and 18 October 2012.”
it is clear that no Member approval was called for in regard to the future role of Cape Town Tourism, and that a Special General Meeting will have to be called, to make the removal of ‘Destination Marketing’ from Cape Town Tourism’s role constitutional.
Forcing members to vote for three of six ‘Black’ Board nominees, due to the constitutional requirement that three of its Board directors be ‘Black’, was a step backward in voting on the basis of skin colour and not on merit, in our opinion, but was in accordance with the Constitution.
Interesting to note is another clause (12.2), not related to the AGM, in which the Constitution states that ‘Only the Chief Executive Officer or the Chairperson or, in his/her absence, the Vice-Chairperson, are entitled to issue public statements on behalf of Cape Town Tourism’. Once again the wording is ambiguous (what does ‘issue’ entail?). We have noted that two recent media releases issued by Cape Town Tourism have quoted Councillor Grant Pascoe, in one instance combined with a quote from the CEO Mariette du Toit-Helmbold, and in another instance with no reference to her, which would appear to be unconstitutional. In hindsight, given the shock AGM announcement, it is clear that the City of Cape Town is now hijacking Cape Town Tourism’s PR activity (the little that there is) for its own glory! It would appear that quoting only Councillor Pascoe would make such media statements in breach of the Cape Town Tourism Constitution!
Something else that appeared odd was Chairman Bartes’ almost apologetic acknowledgement that he had signed the City of Cape Town’s amended Service Level Agreement, to prevent a ‘qualified audit’, and to ensure ‘stability’, both aspects unexplained. It sounded as if he had signed the Agreement without Board approval, which may be a breach of the Constitution, as no such power is vested in the Chairman as far as we can see.
The breaches of the Constitution of Cape Town Tourism in its handling of the AGM would appear to reflect an organisation that lost its focus when the City of Cape Town broke the news about its slashed Budget and its changed role in September, coincidentally the same time as the trip to Turkey, which 10-member delegation included Mr Groenewald from the City, and Cape Town Tourism Chairman Bartes, CEO Mrs Helmbold, and more. The breaches are unforgivable, and are a poor reflection on the Board of Cape Town Tourism, and its legal advisers!
Cape Town Tourism will have to call a Special General Meeting to fix its constitutional breaches, to:
1. Obtain approval of the Financial Statements (circulating them in advance to members)
2. Obtain approval of the Resolutions again (circulating them in advance)
3. Obtain approval of the Annual Report, with a Budget and Business Plan (circulating them in advance)
4. Change the description of the role of Cape Town Tourism, deleting its role of Destination Marketing, in its Constitution.
Clause 20.1 states that the Constitution can be amended by calling a general meeting of its members, with 21 days’ notice to be given to the members of Cape Town Tourism.
Chris von Ulmenstein, Whale Cottage Portfolio: www.whalecottage.com Twitter: @WhaleCottage