Saturday, May 15, 2010

Board Affairs

SECOND UPDATE Sunday afternoon. I have corrected the numbers reported for this year's election results. I had mistranscribed the actual vote for John. Hat-tip to Glenn.

UPDATE Sunday morning. In this post I use the terms Big-endians and Little-endians to describe two groups of board members. The names come from Jonathan Swift's Gulliver's Travels and I discussed my choice of these names in What's New?, which I wrote two weeks ago. The names refer to eggs, specifically to the correct way to open a soft-boiled egg.

This past Tuesday we had our annual stockholders' meeting here at Morningside Gardens. We elected three board members to join eight continuing members for what is now an eleven person board.

This coming Tuesday the board will hold its organizational meeting. We will elect the officers for the coming year. Last year I wrote a series of posts about the election here at Morningside starting with What's Up?, written before last year's annual meeting. In that post I discuss what turned into my candidacy for president. Most of what I wrote in that post I stand by today -- but there have been some changes.

Last year we changed the bylaws so that now there are only eleven board members which is why we elected only three board members this year. In each of the next two years we will elect four members, and then again three years hence we will again elect three (unless, of course, we change the bylaws again.)

As I noted in Whew, last year I ran for president, lost, and was relieved. I was also a little bit hurt. I haven't written about that hurt and I have talked about it very little. And it wasn't the first time. In order to talk about it, I need to give background and I need to use names -- I'll use only the first names of the characters, perhaps with initials to distinguish people with the same name. Some of this background I have discussed before on this blog.

Shortly after I was elected to the board and to the presidency in 2004, I appointed an ad hoc committee to study our resale price (we are a voluntarily limited equity cooperative -- that story is too long to include here.) To be chair of the committee, I appointed Tova, who I knew was in favor of open market, but who I believed to be fair. As it turned out, her idea of fairness and mine don't quite coincide -- and together we mismanaged a contentious situation and left scars on the community that persist.

The ad hoc committee came up with a plan to increase our maximum resale price and our flip taxes. While a large number of cooperators supported the plan, a significant group favored either a smaller increase in the resale price or no increase at all. As president, I was disappointed that the ad hoc committee did not engage in meaningful dialogue with those who favored a lower price. Instead many on each side vilified those on the other side. I too was vilified when I publicly stated that I saw flaws in both plans. When it came to the vote, the ad hoc committee's plan was overwhelmingly passed by the stockholders in March 2006. At the annual meeting which followed, Tova, Barbara, Steve and Jerry were elected. Tova, Barbara, and Steve were all vocal advocates of the increased prices, what I call the Big-endians. Members of that party showed open contempt for the advocates of lower prices, what I call the Little-endians. They also showed contempt for me and I was unceremoniously unseated by Tova. They didn't quite have a clean sweep -- I was elected Secretary, so I remained an officer although I was effectively frozen out of real participation in important discussions.

Two important things happened in that first year of Tova's presidency -- we hired a new general manager and there was a stockholder petition to study going to open market which passed at the 2007 annual meeting. I did not run for reelection that year for two reasons -- I didn't like being on the outside after having been on the inside, and I was having to spend a lot of time looking after my motther's affairs as she was declining.

In 2007, Dan and Patrick were elected to the board, Chi returned to the board after a year off, and Theresa was elected to a second term. During that year, I served on the bylaws committee, and later I chaired another resale price committee as we tried to hammer out a viable proposal for going to open market. I understand that the board meetings were quite contentious, although I was present as an observer at only a few of them. It was after a bylaws committee meeting that Barbara urged me to run for the board again, which I did. This time, in early 2008, the move to go to open market did not receive the vote of the requisite majority of all stockholders. A few weeks later Ann, Glenn, Marlo, and I were elected to the board. When I was running I explicitly said I was not running for president, but I was urged to run by the Little-endians, who were fed up with Tova's leadership. It became clear to me that we didn't have the votes to unseat Tova (see Trinity Eve), and the upshot was that Tova was reelected president, I was first vice president, Jerry was second vice president, Chi was treasurer, and Glenn was secretary. I was still out of the loop on a number of important discussions, and I was frozen out of the bylaws committee, which is one of my special interests, but I did become chair of our tenant selection committee.

There was a big struggle over the budget for 2009, and we voted a much smaller maintenance increase than I was comfortable with. Then in 2009, Tova left the board and Boyd, Chris and Detta were elected and Jerry was reelected to his second term. This time the Big-endians supported me for president and the Little-endians supported Jerry. I think the Bid-endians supported me because they were mistrustful of Jerry's leadership and the Little-endians were against me because they correctly perceived that I was not an orthodox Little-endian. We would have been deadlocked except that Theresa nominated and voted for Chi. Chi herself voted for Jerry. (I am speculating here, but I am sure I am correct.) So Jerry was elected president, Boyd was first vice-president, Theresa was second vice-president, Chi was treasurer and Anne was secretary. Dan and I were both elected to the executive committee, along with Anne and Boyd. It was an insult to me that I was not made an officer. Whether or not it was deliberate, it was an insult and I felt it.

In my opinion, Jerry made a number of mistakes as president in the last year. I was particularly dismayed that he scheduled information sessions during board meetings -- taking up time that might better be spent on important business. There were a number of other missteps -- times when I felt he could have handled things better. In addition, he has made a number of negative statements about Mike, the manager, that to this day are still in the realm of innuendo rather than concrete complaints on which the board could act.

I know that I am to some extent making assumptions about where people stand, but by and large I think I am correct in saying that during the past year the board had three Big-endians -- Detta, Glenn and Marlo; five Little-endians -- Anne, Boyd, Chi, Chris, and Pat; and four Independents -- Allen, Dan, Jerry and Theresa. Both the Big-endians and the Little-endians on the board include folks who are in active touch with people not on the board who share their general outlook.

At the end of this past board year, Pat chose not to run again and Theresa completed her sixth year and was not eligible to run again. Dan and Chi ran for reelection and there were four other candidates -- John and Larry who are generally identified with the Big-endians and Mimi and Tatyana who are generally identified with the Little-endians.

A couple of weeks before the election, Marlo went public with information that he felt cast doubt on Chi's suitablity to serve on the board. For me, Dan, and others, this was a serious breach because we considered that Marlo obtained some of the information only because he is a board member and hence the information is privileged. Dan introduced a motion at the next board meeting condemning Marlo's action. The motion passed, eight to three with one abstention. As I look back on it ten days later, I realize that the "whereas" clauses in the motion obscured what I think is the real issue -- that is, a breach of confidentiality and the use of confidential information for an apparently political purpose. That issue was conflated with at least two others -- whether the information released and Marlo's interpretation of it was accurate and whether Marlo had made a serious effort to present the information to the board for discussion before going public. The latter two issues played larger roles in community discussion than did the breach of confidentiality.

The outcome of the election was that John was the front runner, Larry trailed him by 43 votes, and Chi came in third, more than 150 votes behind John and more than 100 voted behind Larry. So now we have a board with five Big-endians, Detta, Glenn, John, Larry, and Marlo; four Little-endians, Anne, Boyd, Chi and Chris; and two independents, Allen and Jerry. (Again I want to emphasize that this is an over-simplification of people's positions, but it is pretty accurate as we go into the organizational meeting at which we will elect officers for the coming year.) The Little-endians are again putting Jerry forward for president and the Big-endians are putting Glenn forward. There are five on each side and at the moment I hold the deciding vote.

This is a good point to set forth my perceptions of the key characteristics of the Big-endians and the Little-endians when considered as parties. Since neither is a formal party, my perceptions are based on observation and are necessarily distorted by my own point of view.

One of the hallmarks of each group is a lack of trust of the other group -- indeed, lack of trust may be the chief hallmark of each group. There are elements in the outlook of each group that go back thirty years or more, but much of the current lack of trust can be traced to the lead up to the vote on prices in 2006. On substantive issues, I think it is fair to say that the Big-endians are concerned about our long term capital and operational needs and their costs, and the Little-endians focus on the short term costs to the cooperators of meeting those needs. That means that the Big-endians are likely to vote for a relatively higher maintenance increase in any given year than are the Little-endians. This is not to say that Big-endians are oblivious to the financial burdens that increased maintenance places on cooperators.

From my point of view, I think Chi, as treasurer, has for the past three years presided over a budget process and voted for budgets that have consistently under budgeted our needs and have produced operating deficits in each of those years. I think this is because, when it comes to budgeting, Chi, and some other Little-endians, are too myopic and unrealistic about actual costs which cannot be wished away or met through budget cutting and "cost control."

For the reasons I have stated, and for some additional reasons that I will not put in a blog post, I have decided that I will not support Jerry for president or Chi for treasurer. If not Jerry, then who? There are two obvious candidates: Glenn and me. I am very reluctant to try for president, although it is possible that I could be elected, especially if I bargained hard with ech side. But I really don't want the job. I'm willing to put in a lot of time, but not as much time as it takes to be an effective president.

That leaves Glenn, who, as I said before, is the candidate of the Big-endians. I am not a Big-endian. I do not share the deep suspicion many of them, especially those not on the board, have for people who disagree with them. I wince at the thought of the glee with which certain people will greet the election of Glenn as president and of anyone other than Chi as treasurer. But if I do not run myself, I have to make a choice between Jerry and Glenn, and since I have decided not to choose Jerry, I have to choose Glenn. I have talked to Glenn and I trust him to run a more open board than either Tova or Jerry did.

It's been a hard decision. I am somewhat surprised that I came out where I did. God willing, I won't regret my choice.


Anonymous said...

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Allen said...

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So do I.