Compared
with the NRMA, Victoria’s RACV has been a picture of peace and calm
while remaining one of the biggest mutuals in Australia with more than
$600 million worth of assets.

But that might all be about to
change, as Crikey can today reveal the RACV is reviewing its board
structure with a view to watering down the gerrymander enjoyed by the
RACV Club. This would involve handing over more control to the
disenfranchised 1.4 million road service members who have actually
created most of the value by paying their annual dues, currently $69 a
year, and signing up for other insurance policies.

At the
moment, the RACV Club holds nine positions on the board and votes on
all 15 positions while the disenfranchised road side service members
only get to vote for their six directors. Since former NAB investment
banker Clive Hall took over as chairman last November, things have
started to move and the corporate governance committee of the board is
working up some recommendations for change, although it hasn’t gone to
the full board yet.

Club directors tell Crikey they are not
happy with the proposal, fearing they will lose power. However, Clive
Hall has a good reputation for corporate clean ups and it’s shaping up
as an interesting test of wills.

RACV Club members have just
helped themselves to almost $200 million worth of RACV money to build
themselves an extravagant new Taj Mahal in Melbourne’s Bourke St, which
finally opened on 4 July, more than eight months late. The 20,000
members, who pay between $260 and $425 a year plus a hefty joining fee
as you can see here, get to enjoy luxury accommodation and all sorts of other benefits which are denied to the regular 1.4 million members who have built up the assets over the years.

No-one
has ever had a serious tilt at demutualising the RACV, but if the
regular members could ever get themselves organised, the extravagant
new RACV Club facilities should provide a catalyst for change and that
is what some Club directors are worried about. That money should
arguably have been returned to motorists, not wasted on a new
headquarters.

The RACV could join the long list of organisations
that have got into strife after going over the top with a new
headquarters. ANZ, National Australia Bank and the SECV are three
prominent Melbourne examples and who can forget what happened to the
United Nations?

Peter Fray

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