The MFAA has proposed some radical changes to its leadership structure, and it could hand greater control to brokers
When the MFAA rolled out a proposal to institute sweeping changes to its board structure, it was done with the intent of re-engaging the group’s membership.
MFAA president Tim Brown has said the proposal to change both the size of its board and the way its board is elected will put more control of the organisation in the hands of brokers.
“The size of our board, while already efficient, probably wasn’t as efficient as it could be. This brings it into line with what is the traditional proper size for an organisation’s board. The other motivation was to re-engage the membership. The objective of the board from the start of the year has been to lift member engagement. For us, we thought this was an important step,” he said.
This important step breaks down to changes to the MFAA’s constitution. The upshot of the changes will be that the board will be comprised of five directors, directly elected by the MFAA’s membership. There will also be a requirement that at least four of these board directors are brokers, or the representatives of broking or mortgage management businesses. The board will also be able to appoint other directors as it sees fit, provided brokers (or broker or mortgage manager representatives) are always in the majority. The proposed changes would also ensure that there can never be more than two directors from any one state.
The proposed system will replace the current one, whereby directors are named to the board automatically as a result of them being either a state president or the chair of a national committee.
“Basically, previously board members came from one of the committees, whether that be a state committee or a sub-committee such as the aggregation committee, the lender committee or the commercial committee. That’s no longer a requirement. The committees will continue to exist and will continue to work with the board, but the changes mean that just because someone is on a committee it doesn’t enable them to go directly to the board,” Brown said.
Full details of the constitutional changes required for the proposal are to be provided to members in early September, and the proposal is to be put to MFAA members at an Extraordinary General Meeting on 25 September.
Brown said if the proposal goes ahead, the MFAA board will rotate an average of three members each year.
“The first year we’ll rotate only two, simply for consistency. I’ll stay on for the first 12 months of the transition, and after that they’ll elect a chair from the seven board members, who predominantly will be brokers. Four out of five of the board directors have to be members in the industry. The fifth one could potentially come from a supplier, but we believe all five will likely come from members,” he said.
One of the motives behind the change was the maturing of the industry, Brown said.
“We think the industry has evolved, and we think it’s time we took it to a space where the members have more say in how it operates,” he said.
This evolution has been driven by a growth in professionalism, Brown suggested.
“In the sense of professionalism, we’ve come a long way from where we were 20-odd years ago. The key component of that has been the educational changes driven by the MFAA. They’ve succeeded in giving us a higher quality of members,” he said.
Brown said the new structure was also reflective of other industries in the financial services sector.
“We’ve seen it in the FPA and CPA where they’re now run by members. We’re not breaking new ground. It’s the evolution of the industry, and it’s timely. Our members have a lot to say, and we believe if they have a lot to say they should put their hand up and get involved,” he said.
And while Brown said the proposed changes had the potential to greatly boost member engagement, he said better engaging members is a goal toward which the association has already made significant headway.
“I think we’ve come a long way in terms of communicating better, but I think we can always do better in that space.”
Meanwhile, with long-time MFAA chief executive Phil Naylor set to depart the organisation in December, Brown said the board is close to naming a candidate for his replacement.
“We’re out in the market talking to a number of people, and hopefully we’ll have a recommendation for the role come the 25th of September,” he said.
This article is from Australian Broker Issue #11.16. Download the issue to read more!