Facing the changes
Much has changed since we began. The RCSC Board has an almost entirely new
composition of Directors, and for the first time, is starting to show signs of
wanting to operate as a Board; one that listens to the Membership, one that is
proactive in addressing the missteps of past Boards, and one that is planning
for the future of the RCSC.
Making things happen
Lately, RCSC Membership is more engaged than it has been in a decade and has learned that when we act in numbers, we can make change happen! Given this, it is time for the Sun City Advocates to begin writing our next chapter in the Sun City saga: A chapter that focuses on the opportunity that our new Board and renewed Membership engagement brings to the RCSC.
What is that opportunity? To help and sometimes nudge the RCSC to begin operating as a professional, best-practices organization that we all can be proud of; we all believe in; we all believe in acting in the best interest of our community; and we all want to be a member of.
Examining best practices
In the coming months, we will be starting a discussion of how a Board becomes a “best practices” board, what it means to be a “best practices” Board, and how we, as RCSC Members, can assist in that process.
As you might have already guessed, it will require Communication, Education, and Participation – what we have always strived to maintain and remain the keys to any successful organization!
So tell us where do you see the opportunity?
22 comments:
I've long advocated this! Congrats on making the change! I think it starts with informing all members, as well as those running for the Board, just what a Board of Directors is (NO...it's NOT a City Council). The Board of Directors, by the RCSC Corporate Documents, AND by State Law, is beholden to the corporation, NOT the members. As with any not-for-profit corporation in America, members do not OWN the RCSC. There is no "owner", just like there is no owner of the Boy Scouts, or your church. That needs to be drilled into the minds of every member. Members vote for the Board, just like shareholders vote for Boards of for-profit companies. But the loyalty of the Board isn't with the shareholders, nor is it with the members. I know that's not particularly what most people want to hear, but it is the truth...go ahead, ask an attorney.
Once we get clear what a Board is and isn't we can move on to the more important stuff. And we can start getting into the "best practices" that you cite (and yes...that's certainly needed). But first things first, people need to realize what a Board is, and more importantly what it isn't.
Just a reminder to all that the RCSC HAS NO REASON TO EXIST WITHOUT ITS MEMBERSHIP. WE PAY the PIF. WE pay the usage fees. WE comprise the membership of the Board of Directors. WE employ the staff through the Board of Directors. Yes, the RCSC is a corporation, but that corporation was created to better serve the membership by providing an organizational structure to conduct the many facets of its functioning. Rich, please consult the early history of Sun City for further insight.
Sadie, do not confuse the RCSC's goals and duties with the legal fiduciary duties of its Board. The two are entirely separate by law. Yes...the RCSC exists to serve the members. However, the Board's duties are beholden ONLY to th
e corporation. Its the same with every corporation in America. And just because you pay an assessment And PIF fee does not give you special rights over the Board other than those outlined in the corporate documents. Hope that helps you understand the difference a little better.Oh...and by the way...the Board only has one employee...the General Manager. The Board has nothing to do with the other employees, except approve the budget that contains salaries.
I like to think of it like this: Yes, the RCSC has a fiduciary responsibility to the Corporation, not the Membership, but that does not mean that decisions cannot be made taking the Membership into consideration. Working together for the benefit of the corporation and the membership - that's huge!
Of course Board members should take the members into consideration on any issue. That has always gone without saying. But, the law and the corporate documents state very clearly, as you and I have discussed before, the Board works for the benefit of the corporation. And it's that way in every single corporation in America, bar none (including the RCSC). If I'm wrong, show me where, in our corporate documents and in ARS Title 10, it shows that, and I'm happy to change my tune. My aim here is not to get into arguments over the Board's duties, it's to educate. Period.
Rich-maybe real examples would help people understand. Like even if all Members voted/wanted their assessment cut in half - the Board couldn't because it could not run the corporation. But the hard part is: when you say Board must "work for the benefit of Corporation" - what is meant? Who defines what exactly the Corporation is? And who decides what 'benefits' it? Wouldn't that be the General members? Don't 37,000 people define what they view as recreational activities??
Ok. Let me try it this way. I think most people unfamiliar with boards make the mistake of thinking the Board and the corporation have he same goals. This is not true. The RCSC's goals are to serve the members as is stated in the Articles of Incorporation. The Board's duties are later in the Articles. Those duties are to insure the preservation of the corporation. The two have totally different goals...and its the same for every corporation in America.
Here's an example. When shareholders get a proxy for an annual meeting, there are 3 parts. 1. The list of board members to vote for. 2. A list of board initiated proposals that comes with the recommendation to vote FOR each of them. 3. A list of shareholder proposals that comes with the board recommendation to vote AGAINST the proposals.
Hope that makes some sense. You have to look at the two as separate bodies, not one. Legally they are separate.
And this is where the confusion lies!
You say, " The Board's duties are later in the Articles. Those duties are to insure the preservation of the corporation. The two have totally different goals...and its the same for every corporation in America."
But that later Article states, "The affairs of the Corporation shall be conducted by a Board of Directors..."
So how can the RCSC's (the corporation) goal be to serve the Members as stated in the Articles of Incorporation, and then have those same Articles of Incorporation state that the Board shall conduct the affairs of the Corporation, and then say their not different?
Seems to me that if the responsibility of a non-profit Board is to serve its Members, and that same Board is also tasked with the responsibility to conduct the affairs of the Corporation, we're talking about one entity, the Board, with two equal responsibilities!
Unfortunately, that's neither in our corporate documents nor in our state law (or any other state I'm aware of.
I guess my only point is; the Articles of Incorporation says in Article III "To do anything and everything lawfully necessary in the the interest of the Members of the Corporation.."
Then in Article VIII it says, "The affairs of the Corporation shall be conducted by the Board of Directors..."
My point is, there is, in my opinion, an equal responsibility of the Board to the Members as well as the Corporation and the typical excuse we have received in the past about fiduciary responsibility does not necessarily take precedence over the interest of the Members.
We will respectfully agree to disagree.
Sorry Rich - still doesn't help. (Your example used shareholders which you already stated doesn't apply to us). You said Articles define Board's "duties are to insure the preservation of the corporation". All I'm reading is: "The affairs of the Corporation shall be conducted by a Board of Directors..." That's it. So again, if Corporations affairs,action,responsibilities are the 13 things numerated in Article III, then that's what the Board needs to do. No? #1 is "establish...conduct...enterprise for the benefit of it's Members..." Loyalty to the Corporation is loyalty to its purpose which is loyalty to the interests of it Members. No?
Look. I posted this to help members who obviously don't understand Board duties what is corporate policy and the law. It's not to get into a drawn out discussion. I've given you what IS policy and IS the law. You can believe it or not. Look it up and do your own homework. Better yet pay the bucks and talk to a corporate law attorney. The law is the law. Your opinions don't matter. With that, I'm done trying to inform and educate you. You obviously don't want to accept anything but what you already believe. It's like I said when i served on the board...I can't convince 51% of members that the sky is blue. So with that I'm done trying.
Thanks for trying. I understand you're done. Hopefully my questions spur the community and SCA to more clearly explain terms and concepts. I clearly don't know what to believe which I was asking for more than "the law is the law". One example might be the Board has the responsibility to review and approve a balanced budget. And especially make sure that critical infrastructure (like IT) isn't obsoleted and scheduled maintenance is fully funded. It needs to do that instead of diverting funds to projects that may only serve a small group or interest (like maybe archery for example?) So where it gets sticky is how EXACTLY does the Board determine what is to the BENEFIT of the CORPORATION when questions of multi-million dollar projects are entertained. It is beholden to the Corporation - but the Corporation does not voice an opinion...
We can argue back and forth all we want. The majority of court cases have ruled that the board represents the interest of the corporation and not the shareholders. What this means exactly, I have no idea as I am not a lawyer, nor am I a judge.
When I think of the interest of the Membership, I think in terms of the approximately 30,000 members of the RCSC. That is the interest of the Membership. It is not the golfers, the pickleball players, the woodworkers, or the library members. It is the 30,000 members taken as a whole.
Given this concept of the Membership, I am challenge to find many, if any, situations where the interest of the Corporation and the interest of the Membership are different. They are one and the same. So does it really matter if the Board represents the interest of the Corporation or the interest of the Membership? They are the exact same interest.
The problem arises when we begin to think that the Membership is some fraction of the 30,000. In some cases, we appear to think that the Membership is a single person! It is not.
Does that mean that the Board should not listen, at times to a fraction of the Membership? No. Sun City and the RCSC is so much more than the sum of it's parts. Sun City and the RCSC is great because we have 8 recreation centers, not 1. Sun City and the RCSC is great because we have 8 golf courses, not 1. Sun City and the RCSC is great because we have Pickleball, and Tennis, and Lawn Bowling, and Archery, and Rock Hounding, and Swimming, and Weight Lifting, and Dog Training, and Bowling, and Crafts, and Dance, and... Not because of any one of these things, but because of all of these things. So yes, the Board should listen, at times to a fraction of the Membership, but should it listen exclusively to any fraction of the Membership - No.
Keeping the Corporation vibrant, multi-faceted, financially stable, and every evolving is the interest of the Membership.
I think what's interesting in Earl's remarks is where he says, "The majority of court cases have ruled that the board represents the interest of the corporation and not the shareholders." Hmmm? He says the "majority" of the cases but not in all the cases? He is also referring to shareholders which is a much different animal than the RCSC?
My research has found "The main purpose of a for-profit and nonprofit entities is starkly different, but they also share one important similarity. For-profit corporations serve their shareholders, and board directors are accountable to them, Nonprofit board members serve the members of their organization, their cause and their communities."
And as much as I've heard the excuse, "It's the Law," I have yet to see anybody produce that law! The only thing I can ever find in either the Arizona Revised Statutes or the RCSC Articles of Incorporation are the permissible duties the board has authority to engage in?
As I have stated earlier, my only contention is that the board has an EQUAL obligation to the Members as it does to the corporation. End of story!
You have convinced me Tom, what are you going to do with it. A famous religious leader once said "Words without action have no meaning".
Well...perhaps the next time they say they can't do something because of their "fiduciary responsibility" we have better grounds to challenge that excuse?
Don't just tell us it can't be done, show us why not!
Okay...My final thought with a question that I believe would settle the argument; Who is the board responsible to, the Corporation or the Members?
Extreme case Scenario:
The Members decide that they no longer want to be a part of the RCSC, but would rather simply be a part of Peoria and accept being governed under their City Council and municipal rules? What if the Members were to start a petition, get their 10%+ signatures, call a Special Membership meeting and the Members vote, YES! Dissolve the corporation?
Now, here's the BIG question: Who prevails? If the Members believe it's in their best interest as stated in the RCSC's Articles of Incorporation then I suppose the Members would prevail?
This is probably a question we hope is never asked, but until it is, I guess we'll just keep arguing about who the board owes its final allegiance too?
Even as i try and get away from this stuff (the Advocates) i find myself intrigued as others speculate on "how it works." Especially with reading Rich's comments above. I guess now that he is off the board, he is less pragmatic.
I asked this identical question of him when he was a board member and his answer was pretty good as he told me/us "the relationship was best described as symbiotic." Simply put, it was a shared responsibility between the board, management and the membership. I thought it was a good answer then, even though it wasn't working out quite like that.
We all know over the past several years, as we watched the former, former gm make too many decisions, we got in trouble. As she was leaving we came to understand our technology was abysmal (and that's being kind), we had massive issues with deferred maintenance and golf was struggling with too many rounds being played and the courses suffering from it (to say nothing of the full play non-residents enjoying better rates than members).
The good news was we had carry-over funds, the bad news is the cost of everything exploded and catching up was going to be a challenge. The worse news was the board had passed a 40 million dollar boondoggle that would have crippled us. And, we had embraced the mantra of cheap being a good thing.
Rich to his credit confronted the former gm about his math but the board paid little attention as they plowed forward. Thankfully the power on the board shifted to new board members who understood the foolishness and we are still working through what we can afford and need (not want).
'
Anyway, the relationship between the members, the board and management was built on and around the commitment to work together. Ultimately the board's responsibility is to the corporation but as others have acknowledged the corporation exists to serve the membership. Dare i say; symbiotic?
It was a great arrangement until our documents were stripped of the safeguards and protections built into them. We are slowly moving back to a time where the membership has a larger role and voice, but it is and will be a long slow slog.
Continuing on with my thoughts, does it really matter who "owns" the RCSC? If i told you during our formative years, DEVCO/Meeker worked overtime in trying to convince members they were the owners; would it matter? John Meeker knew one day the company would walk away and the community's success or failure would be left in the hands of the membership.
I would speculate that was why he ultimately thought incorporation would be the ultimate outcome. He, and many others, never fully understood how much those living here loved what they had built. It was a labor of love and the majority didn't want to let it go.
That was then, this is now. Yet, as many have pointed out, the RCSC's documents hold the answers to almost every question. What are we? How should we be run? Who is responsible for the outcomes? Does the membership even have a right to a voice?
The challenge is and has been, as those living here stopped paying attention, those running it took greater liberties. Like i have have said often, if they were were pope-like (infallible), it would have worked out fine. It didn't; not sure why anyone would try and dispute that.
These past few years have been daunting. Fixing messes in non-profit organizations is never easy. It's slow and tiring and taxing. Throw in a 9 member volunteer board with limited training and questionable inter-personal skills and is anyone surprised there is some friction?
Then to make it all the more "fun" by adding in a new management team who may or may not have a clue about how the community functions as a whole and it gets even more dicey. One would think. for old people, we would have come to better understand the need to better work together.
Here is the single most redeeming aspect of where we are and the differences of opinions and ideas that clearly exist: The vast majority of RCSC members love, LOVE the fact they choose to make Sun City their home. They want us to be successful and like our counterparts from the past, they won't let us fail.
It's really that simple.
The problem is, everybody wants everything NOW! They want a Performing Arts Center Now! They want the new web site NOW!, they want Mountain View renovated NOW! they want the Library Lease settled NOW! They want the homeless problem settled NOW! And the list goes on and on!
People need to realize that nothing happens overnight! We have several new members on the Board as well as in management and everybody needs to settle-in. New positions are being created and personnel are being moved around. That all takes time and if you want things to be done right, they all need that time.
We all see our lives winding down and we all want to know what the future will bring. Unfortunately many of us won't be around when many of the issues come to fruition.
Truth is, there are many cycles of Board Directors who will come and go and many administrative employees that will come and go, and in the meantime, life goes on as each issue gets passed from one administration to another. Everybody must realize that as those changes happen everything takes one-step backwards as the new people get back-up to speed.
So let's just chill-out and be thankful for the things we do have. The rest will take care of itself.
Tom, you are right that we need to chill-out and be thankful for what we have! Changes in administration and governance are not unique to RCSC. I appreciate your call for patience.
Bill, I have always wondered why people get caught up in whether the Board answers to the Corporation or the Members. It seems to me we are one and the same! Just a difference in semantics in the corporate documents. Those discussions bore and frustrate me.
I think we are all impatient and want things NOW because of our age and we know we have limited time to enjoy ourselves. (If retired, we also have time to think about what we want.) However that doesn't justify the "Me,Me, Me first" attitudes. Although I don't participate in performing arts, I think a PAC should be our first priority. To me, it is a quality of life thing for a community. Since theater attendance is down nationally, we need to make our investment fit other purposes as well.
Here's my idea:
1. Renovate the current auditorium at Mountain View for a theater with retractable seating and use that space for other activities such as dance groups, musical performances, and now the possibility of an indoor dog training facility.
2. Start long term planning for a special Performing Arts Center at Lakeview. The Foundation could start building partnerships to attain additional outside funding so the burden of the building wouldn't fall entirely on the Membership. Also they could have a capital improvement campaign within our Membership for donations, bequests, or including the Foundation in estates. Maybe someone would start a living estate or we could find a business to be a large sponsor and have some portion of the PAC named for them. Think of a Kroger/Fry's auditorium, a Banner Sun Health lobby and a realtor's name on a visual arts section for example. With additional funding, the PAC could be awesome with a view of the lake through large windows, an outdoor patio area, and perhaps an upscale restaurant as well as a coffee/lunch cafe where Members could gather. Let our enthusiasm and creative juices get started. When I said long term, it may take 12-15 years to get it built. I may not be here to enjoy it, but I would be proud of Sun City for accomplishing it. Once a new PAC is available, the auditorium at MV could still be used for smaller performances, practices, and other activities so that money would still be well spent.
3. Since other clubs would prefer that their needs are met first, they could also approach their building desires the same way - through donations to the Foundation. As we have always said, we don't have the money for everyone's wants and needs. Let's all step up to the plate to get more done! (Thinking if the pickleball club wants indoor facilities, are they willing to go above and beyond asking RCSC to furnish it. Same with the air conditioning for the Vintage Vehicle Club, the Best Friend's Dog Club, the golfing groups, and all the other clubs clamoring for their needs being met.) Most communities don't relay totally on taxes, which our lot assessments are akin to, for improving their amenities. It takes many hands, minds and money to go beyond that. There is no reason Sun City can't do the same.
Post a Comment