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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. Michael, 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. As a result 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. Regards, Wayne
Praeder |