Regarding who is the USCF Board of Directors?
Brian Mottershead wrote: There are a number of practical consequences. The organization has been operating in some respects as if the Executive Board is the Board of Directors. For one thing, it fills out reports to Illinois and the IRS incorrectly. But that is the least of it, though it is not trivial. The USCF seems to purchase E&O insurance on the assumption that the EB are the directors. There are questions of director conflict of interest, liability, and fiduciary duty, which turn on who are the directors. It is not a trivial matter to be a director of an organization, and therefore it isn't trivial to make it clear who the directors are.
Mulfish wrote: I don't have any answers on this subject, but I think I'd want to know if delegates are directors before allowing my name to be submitted for candidacy. So I'd very much like to see an answer to this, which ought to be a simple enough question.
We agree as the answer to the question ought to be straightforward. It is anyone’s guess why this matter has remained unaddressed for more than a decade. Perhaps it is as simple as minds are already set to an answer. Due to the related ramifications, it should be significant to proper governance that we have a definitive independent clarification to resolve the matter. Since a cooling off period has passed, it bears some further discussion.
A governing body is a group of persons having ultimate authority over and responsibility for the governance of the organization under the organization’s governing documents or applicable state law (e.g., the board of directors of a corporation, the co-trustees of a trust) in a capacity other than as (or on behalf of) the owners, shareholders, or members of the organization. The United States Chess Federation (USCF) is incorporated under the Illinois statutes as a Not For Profit organization. The US Chess Federation is governed by a set of Delegates who meet annually, and a Governing Board which concerns itself with situations that arise between Delegates' meetings. USCF communications report the Delegates function as the Board of Directors and the Executive Board is the group you elect to oversee USCF management and operations throughout the year.
The USCF Board of Delegates is a required and distinctive governing body of the USCF. Being a Delegate can be a very important representative role in a membership organization. In my view we tend to treat this role too cavalierly. It is useful to note that on the various chess forums people have always insisted that the USCF Delegates are also the USCF Board of Directors. Others appeal to folk wisdom, common opinion, as well as common sense to support this claim. However the USCF Executive Board has been given considerable responsibility as well as officially reported as being the Board of Directors to the Illinois Secretary of State and the IRS. We are told this must be a mistake and is not of consequence. Even so, how we are dealing with our Delegates as a result of this mistake may involve serious mismanagement.
It thus appears on one hand we have an oral tradition about how things used to be verses actual presented documents on how things are today. Nonetheless, the arguments surrounding the issue continue to be vetted. The topic seems to be a sensitive and emotional one for those involved but may also be particularly of interest for those seeking to serve in USCF governance. Regardless it would be prudent not to repeat any mistakes and necessary to maximize role accountability.
Adding to the confusion, in 1998 major changes were made to the USCF governance structure. Also the USCF Bylaws do not explicitly address the issue of whether the Delegates are the Board of Directors. The issue then becomes one of what to do when you can’t find something in your Bylaws on such a topic. Even though evidence may be in the eye of the beholder, we have our governing documents including the Illinois Not for Profit Act, the USCF founding Charter, USCF Bylaws, and our Parliamentary Authority to guide us. To help structure the dialog, we also have formal written independent opinions based on those documents. I’m not sure any debate will be productive if there is speculation that ‘how things used to be must be correct’ verses ‘how things are today is incorrect’ as well as why any ‘independent opinions are not applicable’. Of course, a little ad hominem can always divert our attention.
The reality may be that the USCF does not actually know who their Board of Directors is. Professionals who deal with such issues assure me that confusion between nonprofit Delegates and Executive Board over who is the Board of Directors is not unusual. The Executive Board may be too small and the Board of Delegates may too large compared to the norm. Regardless it appears our current actions are in conflict with our Bylaws, and since the implications of that are great and it seems yet unexplored, some might argue the discussion on this topic is still pertinent for the organization. Ultimately we must move away from speculation and then actually resolve the matter in a way consistent with best practice used among nonprofit membership corporations.