Helping Members Understand...

I have done some research on the possible reason for the communication blackout. Apparently the proposed change could be seen as a significant change to the corporate documents, as written. This could be seen as an attempt to restructure the corporation into something other than its current status or operational structure. In other words, change the core function of the corporation.
“From both the company's and the employee's viewpoints, the Third Circuit's ruling emphasizes the importance of a lawyer's providing — and an employee's heeding — the so-called "Upjohn warning," wherein the lawyer informs the employee, at the start of any interview in service to the corporation for an investigation or legal matter, that the attorney represents only the company and that the communications will not be privileged.”
The attorney is only going to represent the corporation, not the directors themselves. I realize the quotation states employee, but in this instance, the directors of the RCSC are second to the corporation. The attorney is protecting the corporation and needs to maintain the silence of any and all members of the board from making a statement about anything concerning the current situation. If a board member speaks out, client privilege will not protect the individual director from further litigation. I feel confident the board members would have been advised by the attorney that in order to protect corporation from any liability due to a conflict with a change in bylaws, they must not say anything in regards to the pending motions.
Translating legalese is challenging at best. In my opinion, the board members, are being advised to have no communications with any one outside of the boardroom, pending clarification of the proposed changes to the bylaws. What I can’t predict is how long the attorney is going to take to render a decision on moving forward. The voting process to include the members voting on measures of expenditure can completely change the corporate governance structure of the RCSC to a Title 33 corporation. This would affect the entire corporate structure and governance. It could also nullify the existing corporate documents and create a void in the existence of the RCSC as it is currently registered and chartered.
So, there’s an explanation from a former paralegal who suspects this could be why the members are on a communication blackout from the board. I am not an attorney, never claimed to be one, and my explanation is purely speculation and hypothetical.

 

John, I have tried to keep up with all of these motions. However I would like your help. Please post your motion again and any friendly amendments you want to add to it.
Thanks, Janet

 

Carole,
As you know there are two types of motions: ones that cause concern and ones that do not cause concern. IMHO the lawyer advised to pull them all and IMPORTANTLY do not allow the members to conduct business. This seems to be a rather draconian response; don't you think?

The lawyer seems to say that everything relates to the conduct of the business affairs and whatever bylaw amendment is proposed goes to the Board for Study because it relates to the business affairs of the corporation. If this is his argument, then the members do not have the ability to amend the bylaws. But both the bylaws and the articles say the members do have the ability to amend the bylaws. And the Bylaws specifically state that bylaw amendments are not considered business affairs of the corporation, so it seems no bylaw amendment falls within the purview of the paragraph I think the lawyer is relying on. My lawyer spidey senses tells me this just does not make sense.

 

Joh

John,
The issue of grave consequences to me, and my sense of why the motions were pulled is the motion you made to allow member voting. I am not the attorney, but the concern when reading up on various issues regarding standing cases, is that the proposed bylaw changes proposed by you changes the corporate structure from a Title 10 to a Title 33 corporation. These are per the Arizona Revised Statutes. The motion to allow voting by the members changes our corporate structure. So, unless a complete rewrite of the corporate documents were submitted, proposing a single amendment to the Articles changes the corporate structure as defined by law as to how the RCSC is chartered and registered in the State of Arizona. This single amendment could render the entire RCSC corporate documents obsolete as not meeting the standards of a Title 10 corporation.
I know I am not an expert, but I do have a good grasp of the Arizona Revised Statutes, and they are clear about the rules surrounding the two types of corporate governance.
I don’t condone what happened, but I do understand the reasoning. A vote cannot be offered in good conscience knowing it could lead to the demise of the corporation.
I did do my due diligence in researching the ramifications of a vote on the amendment as written, and it is not in the best interest of the RCSC to allow the motion to be considered for a vote. In my humble opinion.

 

Janet,

Several members suggested the following friendly amendment language:

Carole, Thanks for the heads up. Again, I offered over and over again to discuss this issue to no avail. Many members, including yourself were kind enough to make me aware of the possible unintended consequences and went so far as to offer friendly amendment language that I found to be thoughtful and acceptable. While I am quite sure we will achieve a quorum at the meeting it is for the wrong reason. As Tom Morone suggested, the board should have let the members conduct business and vote and then determine if the amendment was in the best interest of the corporation. John

 

John,
I don’t think, legally, the topic would have been available for discussion. Due to the nature of the proposed amendment change, discussion would have acknowledged a willingness to accept the proposal of changing of the corporate documents. Since there is clearly no agreement as to a change in the wording or structure of the Articles of Incorporation, the point of the change is moot. If at any point, there is any discussion about the proposed changes between any board member or representative and yourself, there is then a tacit agreement of consent between yourself and the RCSC.
So, the RCSC chose to pull all of the changes authored because they are all changes to the wording of the documents. Most of the changes were to clean up the current verbiage as written. The proposal submitted by John changes the wording to such a degree, it changes the actual corporation. Rather than create a segue to make modifications, it was decided to remove all proposed language changes.
My best guess is that the changes proposed in John’s would need to be pulled from consideration by the board. At this late stage of the process, I doubt there would be a change in the meeting agenda to allow consideration of other filed changes or motions.
I will once again, quantify my position as a non attorney and am not attempting to offer legal advice. I am offering my opinion on a position allegedly related to RCSC documents and their potential legal implications for the corporation. I believe the only solution is for John to request the removal of the amendment submitted and then ask for a vote on the remaining issues. I have my doubts about being able to vote on the remainder of the amendments even if John pulls his own motions. The lateness of such an action does nothing to ensure a successful vote by the members.

 

To all who have watched this thread, I thank you for your patience and understanding with the recent exchange between John and myself. I feel I have offered my best recommendation to rectify the issue of a non-voting membership meeting. Moving forward, I hope the RCSC will consider this discussion as proof of goodwill action and restore the trust of the community and allow voting at the meeting.
Thank you.

 

Carole,
Thank you for your view. I completely disagree with your tacit approval analysis and had already taken it into account in my dealings with RCSC. We are left with the question of can the members amend the bylaws? On the flip side of that coin is the question of whether the Board has the authority to pull member motions properly made and where that authority is given.

For my part, I continue to call for civil discussion of the issues involved in member voting. As I said today at the exchange meeting this is a legal disagreement between me and the Board's lawyer. We each read the same document and come to totally different conclusions. I asked that RCSC share the opinion of counsel with the members since it relates to their rights. I also asked that they consider the reputational risk of their actions and the impact it will have on member engagement and trust.

 

John,
You are correct in your assessment of the situation the RCSC has created and support your decision and position.

I get the feeling there will be no discussion as the RCSC board has decided to take an adversarial position. So sad for the members. I have no suggestions for a method to improve the communications strategy being implemented by the board at the advisement of the attorney. They have clearly demonstrated their commitment to create chaos and further alienation of the membership. I am so sorry to hear of this tragic turn of events.
I have no idea what to recommend from this point forward. I hope things get better for the members in the next 24 hours, but I am hopeful.
Jean is out collecting more proxies, perhaps it would be more appropriate to collect signatures for a recall of the board.

 

“For my part, I continue to call for civil discussion of the issues involved in member voting. As I said today at the exchange meeting this is a legal disagreement between me and the Board's lawyer. We each read the same document and come to totally different conclusions. I asked that RCSC share the opinion of counsel with the members since it relates to their rights. I also asked that they consider the reputational risk of their actions and the impact it will have on member engagement and trust.”

I see a need for revision to the current board policies and provide clear guidance and guidelines for the directors moving forward. The needs of the business is to broadly used and needs clear definitions. I understand these documents are the directives given, but clearly are not comprehensive enough for the board to follow or provide guidance for the members as to what they can expect. These documents were amended and rewritten by a former GM and the clarity of the documents seems to have been muddled. Giving the ultimate authority to the board to dictate outcomes was not the original intent of the corporate documents. The bylaws has left way too much open to interpretation, which is causing the grief being felt by the members right now.
Taking on the task of restoring the documents to be concise as to directors and corporate governance will be daunting, but it appears common sense does need to be legislated. Another sign of the times?

 

My good friend Ben Roloff had a simple philosophy he brought to every organization he was part of: The bylaws should mean what they say, say what they mean and most importantly, reflect how the organization operates. Sadly some want the ambiguity as an escape clause. The reality should tell them otherwise, because as they waffle on intent and content the chaos and confusion does little to instill confidence or faith from those watching them function.

Which in my humble opinion is exactly why we are where we are regarding tonight's annual membership meeting.

 

So, what will happen this evening? Membership talks and presents things, but voting will not happen? I am seeking to understand. Thanks

 

Unfortunately the way this has shaken out has been pretty clearly structured by the agenda sent over the weekend. If they stick to the script, they'll read a statement from the attorney on why he recommended they not look at the motions submitted by the members (i would prefer he be there in person, but i doubt they care what i prefer) and then they will deal with the "proposed ad hoc bylaws committee" (no idea what that means other than maybe letting us vote on that, or not).

After that, it looks like the meeting will end, and they will entertain an open mic session. That should result in an interesting bitch session/praise the board session where heads will spin as opinions fly. As John noted numerous times, civility should be maintained. There will be some heat with the argument the petition to remove the GM being central to the complaints of not listening to the members. That of course will be further flamed by the removal of all of the motions made and properly submitted in a timely fashion by members.

Ultimately the question becomes; do our documents even matter to this board. Hopefully they will have better answers than "our attorney told us to do it."

While all of this sounds bleak, i would hope a least a portion of the open mic allows for suggestions as how the RCSC and big picture Sun City begins to recapture that lost sense of community. At some point i will try and add my two cents worth.

Finally Eileen, there was a question whether the open mic portion of the meeting will be recorded, or once the meeting ends, they quit recording? I didn't answer on Facebook, but if they (the board) shuts down the video of it, we will yet again have another face meets rake tines moment. Hopefully the board has tired of self-inflicted wounds.

At least one can hope eh?

 

You described it well, Bill. Thank you. Good day!

 

Bill,

Civility and directness can be partners if we don't allow our ego to interfere. For my part, I will speak (if time permits) and ask one simple question. Will you now allow the Long-Range Planning Committee free reign to apply the data based logical approach of Board Policy 16 to the Quail Run and Indoor Dog Training and Socialization proposals before you spend any money on these projects? IMHO both seem excessive given our members financial condition. If the answer is no, my only follow up question will be why.

John

 

I sent an email to both Tom Foster and Chris Nettesheim (president and vice-president) this morning to inquire if the Board intended to video tape the ENTIRE Annual Membership Meeting. I'm waiting for a reply.

I am planning on explaining why I undertook the Petition to replace the GM and giving the final tally of signatures attained. Again, this was not an "official" petition; it was an informal request from the Members in petition form to ask the Board of Directors to do their due diligence and replace the GM. I met with Tom and Chris last week to ask them to consider calling an Executive Session (with the entire Board) to make the decision to ask the GM to step down before the meeting. There was never any intent on my behalf to embarrass him in public, and I thought if they were to ask for his resignation before the meeting, it would be a better situation for all involved. I have no idea if they really listened to me.

I, too, hope for civility.

The aftermath of this meeting needs to be documented in a Lesson Learned session so that this won't happen again. And the Ad Hoc Bylaw Committee should start work immediately so proper words placed in correct order and placement and not written in language that the average person cannot understand take shape to guide us in the future. (I will state here that I disagree with an Ad Hoc Committee; I feel it should be a Standing Committee, include the Policies, and work year round to keep the documents up-to-date and correct.)

 

I have received an email response from Tom Foster, President of the Board. He writes,

"Jean,

The plan is to record the entire meeting."