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December 16, 2007 Subj: December 10 BOT Meeting Report Refer to: Central Region Letter 11-07 ********* Dear Central Region Alumni:
As I pointed out in my other Newsletters, my duty to communicate with you is made clear by the Alumni Association Bylaws/Operating Manual: “…being a Trustee of the Association involves serious responsibility...Of utmost importance is the responsibility to communicate effectively in explaining to our individual constituencies about issues, initiatives and activities of the Association.”
When the BOT meeting was rescheduled to December 10 and I was unable to attend, Captain Bob Jones ’64 of the Austin Chapter contacted me and volunteered to fly to Annapolis to represent me. While unsuccessful in seating him as a proxy as others have done in the past, Bob Jones still traveled at his expense to observe and take notes so that I might convey this report to the Central Region. I am most appreciative of Bob’s efforts which are “above and beyond.” The remainder of this Newsletter comes mainly from Bob’s notes of the meeting, but includes my commentary, as well information from a Board Secretary email after the BOT meeting was held.
· Executive Session. The meeting began with a very long (2 ˝ hour) Executive Session where the Board discussed the Tate & Tackney lawsuit in private. It was reported that three (3) attorneys were present. (LRW Note: I have not been briefed of what transpired in that session as of this writing, but will attempt to get an official briefing). · Trustee Quorum. There were 20 trustees present. 8 trustees were connected telephonically at various times during the meeting (Bethmann, Collins, Draper, Koch, Montgomery, McCarthy, Stovall, Wegner). 1 trustee was absent (Wass). · “No” Vote Assignment. “No” votes were arbitrarily assigned to any trustee who was absent or not on the phone at the time the vote was taken during the meeting; there is no precedent for this that I know of, but it indicates a high level of confidence in the final vote count. · Article of Incorporation. These were changed by a 27-2 vote to authorize up to 29 trustees as compared with the current limit of 25. This item is a point raised by the pending Tate & Tackney lawsuit. One trustee suggested setting a lower limit of trustees to satisfy IRS not-for-profit status, but other trustees felt that was unnecessary. · By-lawSet#1. The Governance Committee conducted an extremely broad and sweeping review of the bylaws and came up with two large revisions, which they named “By-lawSet#1” and “By-lawSet#2”. Only the first was up for formal adoption at the December 10 meeting—the second will be up for vote at the May 2008 meeting. The Governance Committee Chair and Vice Chair, Trustees McCallum and Bogel, indicated repeatedly that the proposed changes were for “clarification” not “change”. They indicated that the bylaw revision effort was driven by the Tate & Tackney lawsuit which “identifies ambiguities”. (LRW Note: A number of changes were substantive in nature despite claims to the contrary.) The proposed BylawSet#1 was divided into four groups for vote as presented below:
o Sections 4.7, 4.8, & 4.9. (Selection of President & Past Chair Succession; Newly-created Trusteeships & Vacancies; Trustee Tenure) Result: 24 Aye; 5 Nay (includes 2 absent). The more notable changes were to reaffirm a six (6) consecutive year term limit for trustees, except for the Past Chair who could serve up to twelve (12) consecutive years, assuming he and his successor both have two terms as Chair. One argument put forth by the Governance Committee for passing this change is their plans to eliminate the Past Chair position in BylawSet#2 that will be put out for vote in May 2008. (LRW Note: I would have voted NO had I been there. I see no compelling logic to voting an undesirable change, e.g., legitimizing a 12 year term for one trustee, with a promise to eliminate the change at a forthcoming meeting. I believe the bylaws should reflect how we wish to operate now and for the foreseeable future.)
o Sections 4.2 & 4.4. (Board Selected Trustees; Trusteeship Categories) Result: 27 Aye; 2 Nay (includes 2 absent). One notable change was to Section 4.3 which reduced the BOT vote from 2/3 to a majority to elect new Board Selected Trustees. The other, Section 4.4, established a new category of trustee, the “Board Officer Trustees” which include the Chair, Past Chair, Vice-Chair, and President. (LRW Note: I would have voted NO had I been there. I see compelling reasons NOT to create a hierarchical structure within the BOT. It is to be a Board of equals, by law as I understand. To create “officers” defies such equality. Further, I do not believe the President and CEO should be a BOT voting member—I believe he should be an ex-officio Board member without vote, because his job is to implement the policy set by the Board.)
o Section 8.1. (Operating Manual). Result: 25 Aye; 4 Nay (includes 2 absent). To quote the Board Secretary in his 12/12/07 email, this vote was for “clarification of the Operating Manual so that the Board can take any action it wishes that is consistent with the Bylaws, without regard to what the Operating Manual says”. (LRW Note: I would have strenuously objected to passage of this change, and would have voted NO. The Operating Manual, in my seven [7] years of Board service has ALWAYS been FOR the Board to use—it lays out the details of the policies and procedures called for by the bylaws. To eliminate Board compliance with the Op Manual is very bad governance policy in my opinion.)
o All Other Changes. (Miscellaneous terminology and wording). Result: 27 Aye; 2 Nay (includes 2 absent). There were numerous changes covered in this vote, but it does not appear that any were substantive.
o Section 8.5. (Indemnification and Insurance.) The Governance Committee did not call for a vote on the Indemnification Article 8.5, which proposed significant changes in BylawSet#1. This Article was sent back for further study by the Governance Committee.
· By-lawSet#2. These proposed changes will be circulated to the BOT for vote at the May 2008 meeting. One change contained in the proposal is to relieve the membership of voting for the Chair and Vice Chair positions, and to replace them with a committee that presents a single candidate slate to the BOT for ratification; write-in candidates would not be allowed. Another change would allow the BOT to disallow a Region Trustee candidate from being placed on the ballot, even though he/she obtained the required 150 nominating petitions from their respective region alumni. Under the current bylaws, a successful petition candidate MUST be placed on the ballot. (LRW Note: I know from two experiences that obtaining 150 original nominating petitions is a most difficult task to achieve.) I will send out more detail on BylawSet#2 as it becomes available, but I suggest that you contact the various trustees who represent you to express your views on this proposal.
· Nominating Committee. The Board unanimously approved (27-0) the recommended slate of the Nominating Committee for elections to be held in early 2008. They are: for VICE CHAIRMAN: CAPT Neil Block , USNR (Ret) '61, LTGEN Jack W. Klimp, USMC (Ret) '68; for CENTRAL REGION: CAPT Steven R. Ingram, USN (Ret) '73, CAPT Robert D. Jones, USN (Ret) '64, LTCOL Alex Plechash, USMC (Ret) '75; for EASTERN REGION: Mr. Richard Glickman '49,,Mr. Telmo W. Ortega '59, CAPT William O. Rentz, USN (Ret) '55 (incumbent). Congratulations to each of these men for their readiness to serve. Messrs. Bob Jones ‘64 and Telmo Ortega ’59 were petition candidates, i.e., more than 150 alumni signed petitions to place these men on the ballot as allowed by the current bylaws. · Communications Committee. A proposed policy for using the Association email system was put forth by this committee. There seems to be some things in the proposed policy that would make it easy for the Association to block someone from sending emails. For example, it prohibits “offensive content against any person(s) or organizations(s)” as well as saying “the message shall not denigrate BOT policies or decisions”—either of these restrictions can be interpreted very broadly and subjectively. The proposal will continue to be worked on, and will probably be voted on at the May 2008 meeting.
· Joint Audit and Joint Investment Committees. The auditors gave an unqualified opinion (i.e., no discrepancies) of the books of the Association. There was good news from the Investment Committee. The return with the new investment company exceeded the national average for endowments/colleges. We earned 19.5 % on our investments for the period ended June 2007. Yale leads the pack with 28%, followed by Notre Dame, Dartmouth, Harvard, MIT, UCal, and then the Association. A cautionary warning was issued not to count on such high returns this fiscal year, because of market volatility which we have all seen. · Council of Class Presidents (COCP) Report. The report pledged to support the Association with respect to the Tate & Tackney lawsuit. The COCP also presented a major BOT reorganization proposal that would change BOT composition so that class presidents are equal to other trustees. Chairman Trost said he would refer the proposal to the Governance Committee for review. · New Voting Procedures. The upcoming 2008 election will use new procedures. In addition to hard-copy ballots in Shipmate, alumni members may use the telephone or the internet.
· Superintendents Report. Because the BOT meeting was rescheduled on short notice there was no Superintendent’s Report.
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