In a significant move by one of Australia’s most high-profile aid organisations, the board of Oxfam Australia will now be appointed rather than elected by its 2300-strong membership.

Oxfam Australia members were sent an email late last week from board chair Michael Henry explaining the change, in which Henry noted the high turnover rate of board members and the struggle with member-elected boards:

1. Oxfam Australia is a large complex not for profit company which demands the same responsibilities and liabilities at the Board level as those of a director of any publicly listed company. It is important that the Oxfam Australia Board is fit for its purpose. Elections do not always produce the right mix of skills required for such a board.

2. Elections have led to 70% change in the elected board membership over the past 2 years with the potential for a 100% turnover in four years if we had continued with elections in 2012. This is a very high turnover rate, and has major implications for the corporate memory, experience and continuity of the Board. Almost all governance experts would see this turnover rate as highly inappropriate for such a complex organisation.

The email included a member survey asking for members’ input on the process, including questions on whether the board should have specific diversity requirements and how nominations for the board should be called.

One anonymous Oxfam member called it an “extraordinary email”, noting that the chair of the board talks about how the board will continue to strengthen accountability but “… fails to explain how, in the absence of elections, it will be accountable”.

Henry told Crikey that members are “regularly consulted in the development of policy and strategy for the organisation” and will play “a role (yet to be determined) in the identification and nomination of candidates for appointment to the board”.

Oxfam’s decision to move to an appointed board is not a particularly surprising move, since most large organisations have either a completely appointed board or a mix of elected and appointed representatives, Steven Bowman, managing director of Conscious Governance, told Crikey: “As an organisation becomes more sophisticated it needs to make sure the board’s members skills and attributes are right … With all the goodwill in the world, most members don’t know about boards and the skills required.”

Julie Garland McLellan, professional company director and author of Dilemmas, Dilemmas: Practical Case Studies for Company Directors, agrees. “As a director, the boardroom is not a place to be if you don’t have the appropriate skills. It’s very dangerous. You need a diverse range of skills,” she told Crikey.

Even if members don’t elect the board, they still have rights, Bowman said: “Members have the right to make changes to the constitution. So if any time they were not happy with how the board was functioning, they could always hold special general meetings and change the constitution. Members ultimately hold control of the organisation without hamstringing its operation.”

That may be true for many non-government organisations, but not for Oxfam. Bowman and Garland McLellan said they expected the 2000-plus members would have had to vote on the board reforms as it would involve change to the organisation’s constitution.

This wasn’t required, Henry told Crikey, because Oxfam’s constitution doesn’t give that power. “The formal ‘members’ of Oxfam, as per the constitution, are the members of the board. They were consulted about the proposed change, and they made the decision,” explained Henry. “Ordinary members — who currently make up about 1% of our supporter base — were not consulted about this particular decision, but they will be consulted on how best to implement it.

Said Garland McLellan: “It looks like a scandalous power grab, but power has been seeded using proper processes and the problem is the board not communicating as effectively as it can.”

The Oxfam board is currently comprised of 10 elected directors, up to four co-opted members and staff representative with no voting rights. Henry says that the board will maintain its current structure until December, next year, which is when the terms of five of the board members end.

In comparison, new board members to World Vision’ Australia’s board are elected by the members of the existing board. Red Cross Australia’s board is made up of various state directors and chairs of committees plus four appointed board members.

In 2009-2010 Oxfam Australia had 146,782 “activists” and 177,696 individual donors. It has 52 groups and state committees across Australia.