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Board Fiduciary Duty Fail While Exec/Founder/Owner Seeks Compensation #NonprofitBoards
Debt and ownership are two big challenges for nonprofits - particularly those in the group home "business". Parents or caretakers most often want to secure arrangements that will safeguard their care-recipient's long into the future - a future often without them. More often than not caregivers rally together and acquire properties under a nonprofit banner to secure these futures. What happened with these group homes introduces a different strategy - one more common to for profits particularly in the nursing care business. In that business it is most common for the owner-operator to acquire property under one entity and lease that property integrating property costs into the overall cost of care or alternately singling out the cost of "rent" and billing for that.
In the following story, this is the same approach but done under the aegis of a nonprofit with the "owner" (clearly not the board) now wants the value of the property back. It is unclear what type of conversations the nonprofit board ever had about the eventual arrangements but clearly the end result is not looking optimum for either the supposed owner and the nonprofit not to mention the care recipients. For shame on the board for not clarifying all this at the earliest beginning of the nonprofit! This board has groslly failed its fiduciary duty of care and must now identify an unlikely win:win resolution. In my opinion this board has seriously failed in its fiduciary duty of care and IF board members are also related in some way to the exec, duties of loyalty and obedience. And that monthly rents were being paid to the founder/executive/owner, there is not obligation on the part of the nonprofit but clearly there is a title challenge. Were I board, I'd be seeking full ownership of the title and seriously argue against any severance or separation agreement with the exec as there has been more than enough gain on her and her family's part.
Here's the CT Mirror story that provides a more in-depth profile.
IA CT group home director wants to cash in on her state-funded properties
State ethics officials ruled the ownership structure for the group homes was a "direct conflict of interest" under Connecticut law
by Andrew Brown April 24, 2022
For nearly four decades, Malcolm and Margaret Winkley have run a pair of nonprofits in Connecticut that serve individuals with developmental disabilities.
And over the course of those 40 years, the husband and wife used their authority over the two organizations — and the taxpayer money they received — to amass millions of dollars' worth of real estate.
As the founders and directors of Brian House Inc. and Adult Vocational Programs Inc., the couple helped decide where to house dozens of people who were in the nonprofits' care, and they frequently arranged for those individuals to move into group homes they personally owned.
Between 1983 and 1990, the Winkleys licensed eight different houses along the lower Connecticut River Valley, in Haddam, Chester, Lyme, Deep River and East Haddam.
Audits, contracts and other records show the couple held the titles for those group homes, while the nonprofits used state and federal funding to pay the taxes, insurance and mortgages on those properties.
That arrangement was specifically called out in an ethics opinion in 1999. State officials ruled the setup was a "direct conflict of interest" under Connecticut's laws, and they argued it allowed the couple to use their authority over the nonprofits "for their own financial gain."
Even so, state officials never required the Winkleys to change the ownership structure for the group homes, and they allowed the couple to retain control of the properties as the state paid off all of their mortgage loans.
Now, as Margaret Winkley prepares for retirement, she is looking to cash in on those taxpayer-funded investments by selling off the homes and other related properites.
We, as a state government, should not be in the business of allowing folks to profit in the millions like this.
STATE REP. MICHELLE COOK, D-TORRINGTON
Officials with the Connecticut Department of Development Services said Winkley, who took the operations over following her husband's death in 2017, sought the state's permission in 2019 to sell the eight group homes back to the nonprofits she runs.
The agency rejected that plan, however, because it would have required the state to pay for those properties for a second time.
"They were expecting to have (the state) pick up the cost," said Kevin Bronson, the agency's spokesperson. "DDS has not heard anything since."
The state's denial was a setback, but according to communications reviewed by the Connecticut Mirror, it has not stopped Winkley from exploring other avenues to a sale.
An email that was sent to the nonprofits' employees last October shows Winkley — who also goes by Peggy — announced plans to donate three of the properties back to the organizations.
At the same time, she and the nonprofits' boards of directors floated a proposal that would free up the five other houses that Winkley still owns by moving roughly 28 residents out of those homes.
"The administrative leadership team is currently assessing the needs of the individuals, planning for potential moves into more supportive or in some cases less restrictive environments," the email said. "The team is exploring options for opening additional homes to replace the remaining homes owned by Peggy Winkley."
The three houses Winkley donated to the nonprofits are worth roughly $1.1 million, according to appraisals. Meanwhile, the properties she held onto are estimated to be worth well over $2 million, according to property records reviewed by the CT Mirror.
'Extremely problematic'
Winkley, who is 73, argued that she and her family should be allowed to profit from the other homes, which have doubled in value in recent decades.
"I kind of look at it as a win-win," Winkley told the CT Mirror in an interview. "I believe that the state of Connecticut has done very well with Brian House and the Winkley family."
"I know that we've saved Connecticut a ton of money," she said. "So the citizens of Connecticut can be, you know, kind of grateful that we have been part of helping the disabled."
Still, Winkley and the staff at the nonprofits insisted that no final decisions have been made regarding the five group homes she owns. And they argued that any decision that is made will be based on what is best for the nonprofits, their employees and the current residents of those homes.
"Although there is not an actual timeline for when we'll be moving the individuals out (if we decide to) of Mrs. Winkley's homes, I can assure you that it won't be any time in the near future," said Michael Boileau, the nonprofits' chief financial officer.
"Mrs. Winkley won't sell any of her properties until the individuals are out of the homes. She has been in this game for almost 40 years and would not pull the rug from under the vulnerable population we serve," he added. "Serving these individuals has been her passion; she dedicated a lifetime to it."
If the other properties are sold, it would further reduce the number of group homes available in Connecticut at a time when the state is already struggling to find enough housing and care for people with developmental disabilities.
State lawmakers and disability advocates are confused about why the state allowed the Winkleys to personally own the properties for decades, and they are deeply concerned about how a potential sale could affect the people who are currently living in the group homes.
Rep. Michelle Cook, who has been a member of the Connecticut Legislature's Human Services Committee for 14 years, called the Winkleys' ownership of the homes "extremely problematic," and she said she intends to speak with legislative leaders, Gov. Ned Lamont and Attorney General William Tong about the family's plans to sell the homes.
"We, as a state government, should not be in the business of allowing folks to profit in the millions like this," said Cook, D-Torrington. "That is just unconscionable to me when you recognize that all of the folks in these homes could feasibly be on the street if they are not successful in relocating them."
"This angers me," she said.
Deborah Dorfman, the executive director for Disability Rights Connecticut, said she was surprised that DDS officials allowed the situation to get to this point, in which the state could potentially lose several group homes.
"It's very, very troubling that this has happened and this is ongoing," she said. "It's sounds like they are just allowing it to happen even when there was an ethics finding."
The Winkleys got their start in the group home business around the same time that Connecticut and other states began to move people with developmental disabilities out of centralized institutions and back into their communities.
Financial records show the Winkleys formed both nonprofits in 1983. Brian House was set up to serve as the group home operator, and Adult Vocational Programs, or AVP, was used to coordinate day programs, which allow individuals to gain employment in their communities and learn job skills.
The Winkleys were "pioneers" in creating private group homes in Connecticut, the nonprofits' staff said, and the couple offered some of the first opportunities for people to move out of the large state-run institutions, which were often criticized for their poor living conditions.
But from the start, the nonprofits and the Winkley family operated in tandem. The nonprofits were in charge of caring for the disabled individuals, but the Winkleys made the decision to personally own the properties where those people would be housed and cared for.
One by one, the family purchased the eight colonial, cape and split-level homes and transformed the properties into group home settings.
"The Winkley family moved five times in total, living in four of the homes while they were renovated, furnished and licensed, and moving out as residents and staff moved in," the nonprofits' website explains.
That setup allowed the nonprofits to get their start, but it also starved the organizations of any long-term financial resources they could use to help fund their ongoing operations. That was something the state ethics office warned about in 1999.
"Rather than having the private provider buy these homes and build equity by paying the mortgage, the executive director and his wife retained ownership and built equity for themselves," state ethics officials explained.
Up until last year, Brian House and Adult Vocational Programs didn't have any hard assets of their own, outside of the furniture in the homes and the vans that are used to shuttle residents around.
The two nonprofits received millions of dollars in revenue from the state in past years, but according to the annual audits, they couldn't even qualify for a line of credit from a bank on their own.
Winkley, who currently collects an executive salary of more than $137,000 per year, said all of the homes were purchased under her and her husband's name because of the financial realities they faced in the early 1980s. The banks, she claimed, wouldn't lend to the nonprofits.
The family backed the loans and opened the homes, she added, as a "favor" to the state.
"We were helping out the state of Connecticut. We weren't having influence over anything. We were just doing what they asked us to do," Winkley said. "The state wasn't willing to buy these houses. The state wasn't willing to put down the deposits."
The group homes aren't the only examples where the Winkleys intertwined their personal affairs with the nonprofits.
The audits for the two organizations are filled with other mentions of "related party transactions."
The audit reports highlight, for instance, how the two nonprofits posted the collateral for a private loan that enabled the Winkleys to buy a 2,737-square-foot office building in Haddam.
The couple rented that office space back to the organizations for $43,884 per year, according to the annual audits. The nonprofits also paid the taxes and insurance on the property.
That business deal started in 1987, according to Winkley, and continued until roughly a year ago, when the nonprofits' employees were moved out of that office and the building was put up for sale for nearly $350,000.
Winkely said she was uncertain whether she would share any of the proceeds from that sale with the nonprofits.
"You know, I don't know," she said. "I hadn't really thought of that."
"The office is empty. There is nobody there," she added. "So what am I going to do with it? It doesn't make sense to keep it empty and vacant. So I'm going to sell it."
The Winkleys also have a long-running arrangement in which the individuals who are served by the nonprofits work at another property the family owns in East Haddam. That work primarily involves the disabled individuals cultivating vegetable gardens, which the nonprofits operate as part of the day programs.
But it also includes those workers landscaping the grounds, shrubbery and flower gardens surrounding the Winkleys' personal residence, a 4,410 square-foot colonial-style home that was first built in 1786.
That relationship was not disclosed in the annual audits for the nonprofits prior to 2019, and when it was finally recognized, the auditors noted that it was an informal business deal.
"AVP does not pay rent for the use of the property, but in exchange, maintains the property at no charge," the audit said. "No value has been assigned to this arrangement."
More recently, that historic home has been transformed into a side business for one of the Winkeys' sons, who rents out part of the 15-acre estate as a wedding venue and event space for corporate retreats.
Photos on Facebook show the company, Smith Farm Gardens, began hosting weddings and events at the property in 2018. The company's website boasts about the gardens, flowers, orchards and "expansive lawns" the work crews maintained.
But according to the audits, the wedding business didn't start paying the nonprofits for those landscaping services until the 2020 fiscal year.
Winkley argued it has been beneficial for her family's personal property and their finances to be interwoven with the nonprofits.
"Brian House needed the Winkley family to survive," she said. "They wouldn't have been in business. It wouldn't have existed without the Winkley family."
"We're a family that has high moral standards. We have high ethics," she added. "And again, the state of Connecticut is lucky to have us."
'Grandfathered in'
Connecticut has laws and regulations that are meant to prevent the executives, directors and owners of private group homes from enriching themselves off the public money they receive.
The legislature passed laws, for instance, that limited the amount of taxpayer money that can go toward executive salaries at private group homes. DDS also has a special ethics committee, which is supposed to police business deals for potential conflicts of interest.
But according to state officials, none of those rules prohibited the Winkleys from owning the eight group homes that state taxpayers financed.
In fact, a state contract from 1995 shows Connecticut officials specifically authorized the nonprofits to pay for the eight homes using state funding as long as the family only charged for the taxes, insurance and monthly mortgage costs on those properties.
The Winkleys relied on that contract for decades as they used government funding to pay down their loans and build up millions of dollars in equity in the eight properties.
That contract remained in force even after the Connecticut Office of State Ethics denounced the arrangement in 1999 and encouraged state officials to prevent similar conflicts of interest in the future.
"The state basically gave their blessing. We were grandfathered in," said Boileau, the nonprofits' chief financial officer. "The state never had any complaints about anything."
The 1995 contract spelled out specific rules for the eight group homes and how they would be paid for. The agreement ensured the payments to the Winkleys would shrink once the mortgage loans for those properties were paid off, which happened in 2014.
Yet one question was not addressed in that document: Can the Winkleys sell the homes and profit from the state-funded properties?
Winkley suggested there is nothing prohibiting her from from selling the five homes that she retained control of. And she argued that her family deserves the proceeds from those properties, since the state prevented them from earning any extra profits in the past through rent.
"All they paid for these homes was a pittance," she said. "I think that, you know, the state has had a pretty good bargain there."
The issue, according to Winkley, comes down to a question of fairness.
"What is fair? That's what I wrestle with," she said. "I want to give back. I want to give back more than I take."
An ongoing shortage
The potential loss of five group homes could seriously affect dozens of individuals and families who are currently on a waiting list for state support.
That statewide backlog has persisted for years as the demand for state-licensed group homes and other facilities outpaced the available spots in those settings.
At the end of last year, state records show hundreds of developmentally disabled individuals in Connecticut either weren't receiving any state support or were in need of additional resources.
Of that group, DDS estimated that roughly 290 people would like to find an opening in a group home or another shared-living arrangement.
Christina Hall, who is in line to replace Winkley as next executive director of Brian House and AVP, said the information that was shared with the nonprofits' staff last October gave the false impression that they had already decided to move residents out of the Winkleys' five remaining group homes.
Hall said the nonprofits are exploring "more desirable" living arrangements for the more than two dozen residents in those homes. But she said those considerations are being made based on the needs of those individuals, not Winkley's retirement plans.
As a result, none of the residents in Winkley's five remaining group homes have been informed that she is considering selling the properties.
"I don't want to concern people unnecessarily, or let them think it's going to happen tomorrow," Winkley said. "We would inform people and give them enough notice."
In the meantime, many of the homes are undergoing significant renovations and repairs, including the replacement of at least two septic systems.
All of that work, according to an internal email, is being paid for through the nonprofits' new line of credit.
What Does it take for a Board To Just Go Away? #NonprofitBoards
Elon Musk has taught a lesson to the Twitter Board that maybe isn't so surprising to for-profits. Musk affirmed that when the going gets tough or there's a lot of money on the table - the board will opt to leave.
In the world today, or at least in the US philanthropic world, boards are struggling, even more since Covid, to figure out how to make their nonprofits truly sustainable. But when I say "figure out" I don't really think that there's as much thought being given this dilemma as I would like to present. Of course, sustainability has become a really huge challenge to nonprofits both in the short and long-run pictures.
I recently learned that one organization that has been trying a variety of strategies to achieve sustainability but is currently dependent on one donor who is footing pretty much most of the bill, is now faced with a reality that the one donor has decided to call it quits. No more money. The board's reaction: ok, I guess that's it. Rather than consider what were the alternatives, they threw up their hands and in a fairly short fashion will have closed-down the shop. Lesson: a total loss of money, unlike Elon Musk's situation will indeed make a board go away. So much for passion for mission I pose.
I know of other boards when faced with a similar situation agreed it was determined to make mission go on and members began looking for a partner who would work with them to fund a sustainability strategy that would keep services going at the level they were. In this scenario money or lack thereof still played a role in moving the board on but at least they were committed to not letting the work go away.
Finally, there the college whereby the board said, we aren't doing this anymore - we are out of funds and hope. The alumni rose up and said to the board, they were correct, they weren't doing this anymore - the alumni will pick-up the ball and make it work. Five years later, the college is indeed working and the first board has gone away replaced by those who have done and are committed to doing the work.
The Twitter board proved that their passion was money, not Twitter nor what Twitter might or could be. Nonprofit boards, face this dilemma, more in the reverse but the outcome, the decisions if not driven by mission, can result in a fail that maybe is just not necessary. One lesson: recruit and/or do the work to ensure your board is passionate and will do more than stand-by and not behave like John Belushi's Animal House fraternity brothers who stayed behind after "when the going gets tough, the tough get going".
Seat Warmers and Saboteurs #NonprofitBoards
The following is from Better Boards Newsletter. I maybe like the labels for different types of board members best but there is some substance filtered throughout the 8 minute read article.
BOARD Dynamics: Warmers and Saboteurs – Dealing with Difficult Directors
Communication breakdown and relationship failure within a board are a challenge for many organisations. Some of the stories we hear most commonly from directors at Better Boards are related to challenging relationships within the boardroom. Governance is not a solitary activity – it involves sharing and debating ideas, but also cooperation. The capacity of the board to come together for decision-making can have a direct impact on its effectiveness.
Sometimes these types of conflict are fleeting, unforeseeable or just a blowing-off of steam, but in other more serious instances, they are the result of an underlying dysfunction in the group such as a poor board culture, or simply an individual board member who is a bad fit for the board or for the role.
Yet disruptive directors and a dysfunctional board don't have to be a death sentence for your organisation. In this article I will address how these conflicts can arise and ways to defuse them, but most importantly, some preventative measures you can put in place in your organisation to ensure your board remains healthy and stable.
The Politics of Personality
Sometimes conflict on a board comes down to a simple clash of personalities or differing opinions – confident, successful and influential people can be a major asset on a board, but sometimes they may also have a specific agenda to push or no interest in listening to or respecting the opinions of others.
In other cases an individual trustee sabotages the good work of the whole group, by committing fraud, or an abuse of power or by exhibiting plain old bad behaviour. In these situations, it is important you and that the other directors have the skills and fortitude to regain control from these saboteurs and protect the organisation, its stakeholders and its reputation, from harm.
Minor conflict or disagreement can sometimes be solved by sitting the perpetrator down for a frank conversation about their actions but if your board is experiencing major conflict affecting your organisation as a whole, or a crime has been committed then seeking outside assistance or advice and pursuing more serious alternatives may be wise.
Research from the BDO Not-for-Profit Fraud Survey 2014 found that 54% of respondents had not reported fraud to the authorities due to fears about the impact it would have on future opportunities for the organisation.1 However, this short-term thinking can have a multitude of long-term negative effects for your organisation, not least by creating a culture that appears to condone misconduct. In most cases, a seriously bad trustee will need to be removed in order for the organisation to recover.
Make yourself aware of the legal avenues you can take in order to remove this trustee. Become familiar with your organisation's constitution and seek legal advice and advice from government regulators to make yourself aware of your options.
Board culture
Whilst it is important for board members to have a solid command of key governance skills and capabilities, it is also vital that the board as a whole is able to utilise these skills in concert for the benefit of the organisation. The principles that inspire your board's culture should be shared and celebrated generously, as the culture of the board is highly influential on the culture of the organisation as a whole.
Board culture should be positive and proactive. Every trustee should feel they have something to contribute and be aware of and involved in all aspects of the board's duties. Gone are the days when only the treasurer needed to worry about the organisation's finances – it is the responsibility of all directors to understand the board's finances as all directors share liability for the organisation's actions.
Recruiting skilled, enthusiastic and engaged directors can be a real challenge for many non-profit organisations, and in some situations this means that unengaged, under-skilled or uncommitted people are signed on as directors. These seat-warmers are disengaged and disruptive to the work of the board. For an organisation to truly succeed and thrive, directors should understand the serious commitment that the role involves.
Speaking at the Better Boards Conference 2014, Robert Gordon of Board Accord addressed the value of articulating your board and organisation's culture, values, history, purpose and goals in order to maximise board participation. He advocated communicating these as part of the board selection process to ensure that prospective directors are aware of these from the outset.
Tips for Maintaining a Cohesive and Cooperative Board
Board Succession and Renewal
Ensuring that a robust succession and renewal plan is in place for your board can prevent power vacuums or the employment of under-skilled directors or seat warmers who treat board meetings like social events. The challenge of attracting new directors is a common challenge for non-profit organisations but securing a desirable candidate is only one facet of the process of renewing a board's membership.
A robust induction plan for new directors is also a vital process of board renewal. Joining a board is like assuming any new role; it takes time to settle in even if you have previously held a similar position. As David Fishel puts it in The Book of the Board, putting new directors through an effective induction program "increases their value to the organisation, and minimises the risk of feeling like an outsider for months after they have joined"2.
Use the Constitution to manage board succession and expectations
A proactive and pre-emptive method for managing your board's makeup is to build board guidelines into your organisation's Constitution. At the Better Boards Conference 2015, Natalie Elms – a PhD researcher from the Queensland University of Technology – outlined the value of the constitution as helpful tool in ensuring you have the right directors on your board, and removing any who are lacking commitment.
In addition to providing important legal information about how your organisation is structured, its purpose and reason for being, and how it is to be governed, the Constitution can be used to direct the nature of the organisation's board. It can be used to direct the size of the board, how new directors will be appointed, whether directors are elected or chosen by the existing board, how long a trustee can serve for and the number of terms.3
Just as employees are managed with policies and procedures, such as position descriptions, codes of conduct and key performance indicators, directors should have detailed documents that prescribes the roles and responsibilities of individual directors and the board as a whole. Well-understood and well-used policies and procedures make the difference between a haphazard committee and a professional, strategic and innovative board.
Documentation that formalises governance roles and key board functions provides a resource that can be used to instruct new members, be called upon for clarification and also provide a framework within which under-performing or recalcitrant directors can be managed.
As with any employee, directors should be expected to follow certain standards of behaviour in their role on the board. A board code of conduct will help to ensure that expectations are set out up front and that all directors are made aware of these expectations and make a commitment to stand by them. In combination with the organisation's constitution, the code of conduct can be used to remove disruptive, disrespectful or underperforming directors.
Open and frank conversations about fraud and corruption
Fostering open conversations within the board and between the board and the rest of organisation is a vital process for uncovering assumptions and miscommunication and airing disagreements in constructive way. Carefully discussing an issue such as fraud when developing policies can assist in coming to a cohesive and inclusive decision that when disseminated throughout the organisation will encourage ownership and commitment to the principles. In an article for the Better Boards Newsletter, Trent Dean – Executive Manager of Quality, Safety and Risk at Royal Flying Doctor Service (Qld) – writes that boards should put the topic of fraud up for discussion and "have a clearly visible board position that ensures any substantiated claims of fraud or corruption will be formally addressed, including industrial or criminal action."4
Continued Board Development
Research suggests that learning in groups or teams can significantly improve the effectiveness of your learning, and group activities are beneficial in building cohesion. Part of making a commitment to an organisation in joining a board, is the commitment to having the most up-to-date skills and knowledge. Regular planning workshops, strategy days, retreats, conferences and courses that are participated in as a team can not only be an enjoyable way to build relationships as a board and improve skills and knowledge but can also assist in developing and practicing cooperation, communication and decision-making as a team.
Difficult directors, saboteurs and seat-warmers are a reality that some organisations face and it can be a tough struggle to rein the board back to a functioning, cohesive and effective body. Dealing with problem directors is best managed with calm and clear communication and with the assistance of robust policies and processes that help the board to be proactive, up-front about its expectations and a champion of cooperation.
BDO Not-For-Profit Fraud Survey 2014 ↩
Fishel, David (2008) The Book of the Board: Effective Governance for non-profit organisations, Second Edition, The Federation Press: Sydney, p. 202. ↩
Fishel, David (2014) The Book of the Board: Effective Governance for non-profit organisations, Third Edition, The Federation Press: Sydney, p. 138. ↩
Dean, Trent (2014) Not for Profit, Not for Fraud , Better Boards Newsletter May 2014. ↩
Fiduciary Duties Fail: A Case Study #NonprofitBoards
There are many lessons that can be drawn from the following Voice of San Diego story about a board and its senior staff who sold property to "friends" at way below-market prices. I have inserted observations in a different color ink.
A Senior Care Charity Sold Its Property for a Fraction of Its Worth. Its Leaders' Friends Got Rich.
Two local developers, both friends of the Affordable Senior Housing Foundation's executives, bought the home in quick succession and each sold it for hundreds of thousands of dollars more than they paid.
by Will Huntsberry April 25, 2022
The house on the corner of Oak Hill Drive and Boyle Avenue – with its bunches of bougainvillea crawling along a chain-link fence – looks like any another cozy single-family home in Escondido. But 1385 Oak Hill Dr. is more than it seems. Until recently, a charity owned the property. Two local developers, both friends of the charity's executives, bought the home in quick succession and each sold it for hundreds of thousands of dollars more than they paid. - Clearly a lesson for board and senior staff about Duty of Loyalty and Care.
The story of that charity, Affordable Senior Housing Foundation, and 1385 Oak Hill Dr. reveals the sometimes short distance between for-profit and nonprofit companies – and the questions that can arise when large profits result from the company's transactions.
In August 2020, Affordable Senior Housing, a nonprofit that runs a senior center, owned the house on Oak Hill Drive. San Diego home prices had just leapt to an all-time high.
Zillow valued the Oak Hill property at $505,900. But it was at that same time, Affordable Senior Housing's board members decided to sell the property, without listing (here's a Duty of Care question - with the test of acting prudently (as others in a similar situation would do) it, for $150,000, according to property records. They sold it to Eric Bills, a friend of Tom Sutton, the charity's chief financial officer, according to the most-recent documents filed with the California Secretary of State.
The new deed of ownership wasn't submitted to county officials until March 2021. Two and a half months later, in late May, Bills sold the house for $350,000 to another person with connections to the charity's executives. He confirmed he made no improvements to it. This time the home went to a house-flipping company owned by Robert Baird, a Poway resident, and two of his sons. The Bairds are church friends of Matthew Parks, the charity's chief executive officer.
Again, Bills did not list the property on the open market. The $350,000, sales price was far lower than the Zillow estimate, which had grown to $624,400. A smaller 3-bedroom, 2-bath house on the same street sold for $640,000 around the same time.
A little more than a month after buying the home, the Bairds listed it. Six days later, they had a buyer on the line for $624,999, according to property records.
San Diego's real estate market was firing. Between August 2020 and August 2021, home prices rose 26.2 percent, according to one index.
Charities like Affordable Senior Housing are legally barred from making deals that enrich other people at the expense of the charity itself. That's the deal they strike with the federal government by becoming nonprofit organizations: In exchange for not paying taxes, they must serve the public good, rather than a particular person's private business interests. And again, a failure in fiduciary duty!
"Selling something for hundreds of thousands of dollars below market value is not putting the best interests of the nonprofit first," said Miranda Fleischer, who specializes in nonprofit law at the University of San Diego's School of Law.
Parks and Sutton, who at times have held a majority on the foundation's three-person board, are also part-owners of multiple for-profit companies that have large business contracts with the foundation. Again, a failure in fiduciary duty - loyalty in particular.
They say they understand how the under-market-value sales might raise questions, but they insist they were acting in the best interest of Affordable Senior Housing.
In 2017, weeks after Affordable Senior Housing was registered in California, the charity purchased Oak Hill Residential Care, a senior care center in Escondido, set up to serve roughly 100 residents. Part of the deal included 1385 Oak Hill Dr., which sits across the street from the senior care center and was used as a storage space.
Affordable Senior Housing was created to "develop and operate housing specially designed for the elderly," according to its founding documents. It would also "provide affordable housing on a charitable basis." Originally, Parks and Sutton didn't have any intention to sell the storage facility/house, they said.
California taxpayers subsidized the purchase with a $5.1 million loan from the California Enterprise Development Authority. The financing is tax-exempt, which means borrowers like Affordable Senior Housing save money by paying a lower interest rate, effectively, than if they took out a traditional loan.
After securing the property, Affordable Senior Housing set about refinancing with a loan backed by the Department of Housing and Urban Development. HUD loans typically have lower interest rates, because the federal government guarantees them. Sutton and Parks said the HUD loan would help them save hundreds of thousands of dollars a year.
But problems with the HUD loan led them to urgently sell 1385 Oak Hill Dr., Sutton and Parks said.
Getting a HUD loan is a long and complicated process. It requires, among many other steps, a property appraisal. But, Parks said, the appraisal unintentionally excluded the property at 1385 Oak Hill Dr. in its assessment of Affordable Senior Housing's holdings.
HUD would only back a loan against all pieces of property owned by Affordable Senior Housing, said Parks and Sutton. And since the Oak Hill property had been left out of the appraisal, it wasn't part of the deal underway. HUD officials presented two options, Parks said: Sell the house, or get out of the HUD queue and start over.
Parks said he performed an analysis that showed Affordable Senior Housing would lose as much as $800,000, if it had to restart the HUD loan process. Parks and Sutton said they would be happy to provide the analysis to Voice of San Diego during an initial interview. The next day, however, Sutton and Parks said they would provide no further comment or any of the documentation they initially offered to share.
"It was definitely in the interest of the nonprofit to fire sale it and not get kicked out of the HUD queue and have to make up that $800,000," said Sutton.
They sold it to Eric Bills – and acquaintance of Sutton's, who had become a friend, Sutton said. Sutton and Parks said the property was in bad condition when they sold it to Bills for $150,000 and not worth the $505,900 that Zillow estimated. County tax assessors had placed the value at roughly $390,000 at the time, but tax assessments are frequently less than actual market value of a home.
The house had "no walls," said Sutton. "It wasn't in a livable condition," added Parks. Sutton claimed he had videos of the house proving this he would provide to Voice, but he later declined to provide them.
Sutton and Parks declined to provide documentation from HUD that showed they were forced into a quick cash sale.
In essence, Sutton and Parks say they would have lost more by restarting the HUD loan process, than they left on the table by selling the home for $150,000.
A HUD spokeswoman, Shantae Goodloe, declined to say whether HUD officials told Parks and Sutton to sell the house quickly or risk losing their place in the HUD queue.
According to Parks and Sutton, they were in quite a predicament – a predicament that ultimately helped their friends make lots of money. Bills sold the house to family friends of Parks for $350,000. Those friends then sold the house to a family for $624,000.
The California Office of the Attorney General has a charities division that is responsible for enforcing state nonprofit laws. Officials for the Attorney General's office declined to comment on whether the sale of the home warranted further investigation, but did point Voice to online legal guidance. The Attorney General's office is charged with investigating "breaches of fiduciary duty" and "sales of charitable assets at an unfair price," the guidance notes.
"Special attention should be paid where there has been no legitimate effort to market the charitable asset widely to insure maximum return," a separate guide from the Attorney General's office notes.
Sutton and Parks did not say whether they tried to market the house to anyone other than Bills. Bills, aside from being Sutton's friend, had also done contract work for Sutton and Parks, they said. They declined to answer whether they offered 1385 Oak Hill Dr. to the house-flipping family known by Parks, who later bought the property in May 2021.
Sutton and Parks are part of a web of nonprofit and for-profit companies that tap into multiple parts of the senior care industry – an industry valued at nearly $1 trillion per year, according to one report.
They are part owners in at least two companies, which have had contracts with Affordable Senior Housing. Parks and Sutton are both board members for Affordable Senior Housing, according to the charity's most recent, publicly available tax return – giving them a majority on a three-person board. (They declined to provide the current makeup of the board.)
In other words, Sutton and Parks control the vote on contracts their companies get.
Miranda Fleischer, the nonprofit legal expert, said while it is allowed to have nonprofit boards of just three people, it is not considered best practice. (Note from MB: "this is not technically a "best practice" as much as a practice that is discouraged by funders and just good common sense in how to oversee a nonprofit. However it's hard to argue this number to not be a "best practice" when the Gates Foundation board was this size for most of its existence)
One of Sutton's and Parks' business ventures is Torrey Pines Development Group. Torrey Pines had a lucrative contract in place with Affordable Senior Housing, from almost the moment the charity was formed.
In 2017, weeks after Parks registered Affordable Senior Housing with the California Secretary of State, the charity purchased Oak Hill Residential Care for roughly $18 million. Torrey Pines helped broker the acquisition. It collected $540,000, or 2.9 percent, in acquisition fees. The fees came out of the seller's end, they said.
"It was a market rate fee," said Sutton. "When you put the work in, it's OK to get paid for it."
Indeed, controlling both sides of a transaction isn't necessarily illegal. To stay within bounds, such deals must be done at fair market value – and they frequently trigger additional public disclosure requirements with the IRS. Many nonprofits steer clear of doing business with their executives to avoid even the appearance of a conflict of interest.
At the time, Sutton and Parks were new to working inside of nonprofits, they said. They asked a lawyer whether the deal was legal. They received an official opinion informing them that it was, Parks said.
"I'd be happy to share that with you," said Parks in the initial interview, before declining to share any documentation with Voice.
Parks and Sutton, according to tax documents, are also part-owners of Bayshire, LLC, a company that runs operations at several senior care centers throughout Southern California and Utah. Bayshire was founded by Scott Kirby. It handles everything from management to staffing and bookkeeping – and provides some services to Oak Hill Residential.
"Torrey Pines Development Group and Bayshire Senior Communities have worked together to develop and operate many assisted living projects," Parks wrote in a proposal for a senior center in Juneau, Alaska.
Parks and Sutton declined to say how much Bayshire's contract with Affordable Senior Housing is worth. Kirby did not respond to a request for comment.
Affordable Senior Housing, Torrey Pines Development and Bayshire also all share the same address on many official documents: 1817 Avenida del Diablo in Escondido.
Sequoia Affordable Housing Foundation, another nonprofit, shares the same address and was also registered by Parks.
Sequoia secured a $7.1 million state-backed loan in 2018 to purchase Shadowridge Senior Livingin Vista. Shadowridge also uses Bayshire as an operational service provider, according to its website.
The full extent of Sutton's, Parks' and Kirby's shared business interests are unclear. The most recent, publicly available tax return for Affordable Senior Housing notes they each "receive fees for guaranteeing the loan" that was used to purchase Oak Hill Residential. The tax return mentions their shared interest in Bayshire and also mentions they "are in other businesses together."
The new deed, showing Bills as owner of 1385 Oak Hill Dr., was recorded with county officials on March 12, 2021.
Bills "did some work to the house," said Sutton, but "did not go through a full renovation."
Bills, however, wrote in an email that he made no improvements to the property. "It was not habitable at the time of purchase or sell (sic)" he wrote.
Still, he managed to sell it for $200,000 more than he bought it with relative ease. Bills accepted a cash offer from Mac Capital – a flipping company operated by Robert Baird and two of his sons, Paul and John Baird – two and a half months after the deed was recorded.
Parks goes to church with the Bairds and had known them since childhood. He introduced them to Bills, he said. When asked whether he attempted to market 1385 Oak Hill Dr. to the Bairds on behalf of Affordable Senior Housing, Parks declined to answer.
The Bairds for their part undertook a much larger renovation, said Parks. (The Bairds did not respond to multiple requests for comment.)
"They put in at least $150,000 or close to $250,000," said Parks.
The Bairds, however, owned the home for an even shorter time than Bills. They purchased the home from Bills on May 27, according to MLS. A little more than a month later, on July 8, they listed the home for sale. By July 14, they had a buyer on the line ready to pay their asking price: $624,999, according to Zillow.
During the time the Bairds owned the home, no one pulled permits to complete any work on the house, according to Escondido planning officials.
The deal closed on Aug. 7 for $624,000, according to MLS.
The Bairds did not respond to questions about how much they made off the sale or how much work they put into 1385 Oak Hill Dr.
The Bairds, and Parks and Sutton all declined to answer questions about whether the transfer of title from Affordable Senior Housing to Bills to the Bairds was pre-arranged from the outset. Bills wrote in his email no such pre-arrangement existed.
Sutton and Parks said they had a very brief window to sell the property before they would risk restarting the HUD loan process and losing as much as $800,000.
"We were on the clock. We had to make a choice; whether to sell immediately or start over with HUD. We didn't have time for someone to get a loan or whatever. We had to sell it for cash," said Sutton. "This should be a story about how [we] are using a nonprofit model to keep rents low for our residents. Make it a positive story… That would be the appropriate thing to do."
Nonprofit Boards Accept A Lot From Management #NonprofitBoards
The following New Hampshire Union Leader story tells of a nonprofit board that maybe could have done better if not different. The article suggests that the board did not wholly fail in fulfilling its fiduciary duty but it could have done better. But equally important is the question about how long is too long for an executive. In a kind of Sodom and Gomorrah of governance, just how many years should the same exec be left at the helm? If boards, even those that have regular turnover of its members, deems it fine that an exec stay on until they choose to retire, 20, 30 or more years, how better-off can the nonprofit be? While time is and cannot be the singular criteria and there are of course rules around age discrimination, good thoughtful policy about how long a term can most benefit the nonprofit. Clearly the following story could have well served the organization.
Report on collapse of Lakes Region hospital points to a board too deferential to longtime execs
By Josie Albertson-Grove New Hampshire Union Leader
Apr 24, 2022 Updated 13 hrs ago
Many factors led to the collapse of the nonprofit parent company that owned Lakes Region General Hospital and Franklin Hospital until last year, a report from state nonprofit regulators found.
But the group's board did too little to push back on hospital executives who were failing to see the reality of the 2008 recession and the implications of an aging and increasingly poor population, the report states.
"They went forward with an aggressive expansion campaign at a time when there were financial headwinds," said Tom Donovan, director of the Charitable Trusts Unit of the New Hampshire Attorney General's Office.
"They were listening to management," Donovan said, but the board could have been more skeptical.
LRGHealthcare filed for bankruptcy in 2020, and Concord Hospital bought Lakes Region General and Franklin Hospital in 2021. But the report points to problems that began in the late 2000s, actions of hospital executives and the deferential attitude of the board of trustees meant to oversee executives.
"Board members should have challenged management's recommendations to take on so much debt," the report states.
Even as the recession was gathering force, former CEO Thomas Clairmont and former CFO Henry Lipman pursued two expensive projects: an expansion of the Laconia hospital, and a switch to electronic medical records. But as the Lakes Region population got older and poorer, and more patients used Medicare and Medicaid insurance instead of private insurance that tends to pay hospitals more, the hospital was losing money, the report said.
Clairmont has since retired and Lipman now runs New Hampshire's Medicaid program, the health insurance program for poor and disabled people.
Former trustees interviewed by the Charitable Trusts Unit of the Attorney General's Office said they thought the board, Clairmont and Lipman were driven by a desire to serve the community, and did not adequately address the demographic and economic headwinds facing the hospitals.
Clairmont had worked at the hospitals for 40 years, Lipman for 30, the report stated, and board members tended to defer to their expertise. The report's account of interviews with board members said they deferred to the executives they were supposed to be overseeing.
Board members told the charitable trusts unit that Lipman's financial projections were overly optimistic, and Clairmont was emotionally attached to the expansion as his "legacy," as he approached retirement. The board did not bring on any consultants or seek any outside voices as it pursued the expansion, the electronic medical record system and the financing from the U.S. Department of Housing and Urban Development that supported both when the hospital was losing too much money to secure other financing.
The board did not neglect its fiduciary duty, the report found: they were not asleep at the wheel, but could have pushed back against the executives' plans that eventually caused the collapse.
Donovan said the Charitable Trusts Unit issued the report because the failure of a hospital is significant, and because it serves as a warning to other hospitals — and other boards, from those overseeing small nonprofits to those supervising colleges and school districts.
The report advises boards to seek out training and outside guidance, and avoid overreliance on executives.
Chief Governance Officer: An Idea #NonprofitBoards
Reminiscent of the Board Parliamentarian (old concept for the "process police") two folks proposed in the Stanford Social Innovation Review the idea of having a board member serve as Chief Governance Officer. The individual would perform many of the functions that Governance Committees, when not otherwise busy with recruitment and orientation and selecting officers.
I generally applaud the idea that these functions be carried out - really! That they are not is definitely a fatal flaw in good governance. That a board member should be singularly appointed to the role - not convinced. GET the Governance Committee functioning at a high level and problem solved says me! Just the same, this is worth a read.
Oh, and there is one tiny piece in this Association Now newsletter article really worth a laugh: "the CGO role shouldn't belong to the board chair, who is likely too busy with the broader strategic issues." Really? This is how board chairs spend their time when they aren't busy being the therapist to the CEO or individual board members or planning board meetings? Really? Makes me chuckle it does!
Do You Need a Chief Governance Officer?
Association boards need to stay strategic. A CGO, dedicated to good governance, might help them stay on point.
By Mark Athitakis Apr 17, 2022
ShareShareShare
It isn't news that many boards struggle to get a handle on good governance. Would it help if one of your board members was exclusively dedicated to the matter?
Yes, it would, argues Paul Jansen, a University of California-Berkeley business professor, and Helen Hatch, a Berkeley business student. In an article for the Stanford Social Innovation Review, "Does Your Nonprofit Board Need a CGO?," the two make a case for creating such a role.
The reasons for a chief governance officer, they write, are straightforward: Boards tend to become disengaged, their goals can become scattered, and their members can struggle to agree on what good governance is—and rarely make a plan to define it, let alone improve it. A culture of confusion, without intervention, can prevail.
"Outdated committee structures, underperforming committee leadership, or lack of annually updated plans fail to ensure that committees are focused and accountable," they write. "A bias towards consensus too often leads boards to rubber-stamp decisions, and inadequate preparatory materials coupled with tight timelines leave boards struggling to debate complex issues, explore strategic choices, or act with confidence."
Certainly, something needs changing: The writers point to a BoardSource survey of nonprofit CEOs demonstrating that nonprofit board performance has been at a plateau or in decline for more than a decade.
In-House Expert
What could a CGO do to address this? A few things, Jansen and Hatch say. A CGO would be the in-house expert on a nonprofit's bylaws, policies, and procedures, keeping strategic discussions from drifting off course. They would be a close advisor to the board chair, helping to better set and frame agendas. They would do the work of measuring the board's effectiveness, managing orientation and training, and connecting with the CEO and staff.
The writers set a few ground rules around this. The CGO role shouldn't belong to the board chair, who is likely too busy with the broader strategic issues. It also shouldn't belong to the governance committee, which is typically consumed with identifying next year's officers.
Might it work? Leadership speaker and consultant Hardy Smith, who spoke with me last week on dysfunctional boards and their struggles to identify good board candidates, says the position "could shine a light on a board's governance role and help ensure proper governance-related practices are being executed." But to succeed, he adds, it would need a board that takes the role seriously. "A title without clarity of expectation and commitment from the board … would accomplish little."
Mary Byers, CAE, an association consultant and coauthor of Race for Relevance, is similarly skeptical. "It's unlikely that most boards will have someone on the board, or could recruit someone, who would have the necessary background and skill set to handle the role," she says. "With time at a premium, it's unlikely that someone could get up to speed on the role quickly—and board turnover would make it an ongoing challenge to keep the role filled." Better, she suggests, that the CGO role be handled by a staffer who can be the institutional memory of the association's governance and dedicate more attention to the job.
No question, associations should avoid falling into what Jansen and Hatch call a "rut of substandard governance." Better training on governance can be an important element of that. The first task for a board, then, should be to identify who's best to lead it.
What has your association done to address governance issues within your board, either with volunteers or staff? Share your experiences in the comments.
Nonprofit Board Policy #NonprofitBoards
Today there's a lot of upset folks down in Ohio. The problem: Mr. Trump is coming to their county having scheduled one of his rabble rousing rallies (alliteration). But funny enough, this is not THE problem (don't ask me about THAT). Nope, what is the problem is that the County Fairground Board has approved the rally - well, not the rally but the use of the Fairground for the rally. And as much as it pains me to say this, I don't see that as a problem.
According to the Board, they have a policy that permits any crazy or sane event as long at the sponsor pays the fee. This is a basic revenue generating activity that appears to have no other standard or protocol or even values applied than that the host pays the fee. Yes, it's a County Fairground and yes, the mission has to do with agriculture but as anyone knows who has ever gone to a County Fair, there are tons and tons of vendors also present and few have a core set of values that has anything to do with agriculture. That the Board might have a set of values that applies a political or philosophical filter to who can be a vendor or rent space is certainly unclear to me but this would be the one way to reduce "unwanted" or unpopular vendors. In the meantime, let all who want come and maybe that is the core value - sustainability!
However, folks who are upset argue a different thought - they offer that the Board is playing politics and while it may indeed be "right" leaning in this particular case, the laws that say a nonprofit that offers any event for a fee as a revenue generating project is not engaging in political discourse despite the fact that this particular "guest" only operates this way. So, while there is this standard by the IRS, I would pose that it does not apply. Just the same, nonprofit boards should indeed be aware of what comprises activity that violates this rule and ensure they are doing what they should to comply. Compliance is after-all a fiduciary duty.
Oh, did I mention that one of the pictures in the article is of the barn where swine are shown? Irony?
Here's the Delaware Dispatch article
Delaware County Fairgrounds hosting Trump rally despite some resident and IRS concerns
Dean Narciso
When Donald Trump steps onto the stage at the Delaware County Fairgrounds on Saturday night, there will be those — likely at the fringes of the expected thousands — looking on in anger, not adoration.
Susan McLaughlin, a 54-year-old high school teacher, will be one of them.
The county fairgrounds, especially one that is walking distance from her home in downtown Delaware, should be reserved for livestock, 4-H clubs, midways and harness racing, she said.
"I don't think it should be used for any political purposes. It's just wrong," McLaughlin said. "It's not a place where people should be doing any political wrangling."
Rally announcement: Former President Donald Trump to visit Delaware County ahead of May primary
McLaughlin and some others question whether the county fair board should be hosting a partisan political rally considering they are an IRS-approved 501(c)(3), nonprofit organization.
According to IRS code, nonprofit entities are prohibited from participating "directly or indirectly" in political campaigning.
Most county fairs, however, allow elected officials, such as sheriffs, auditors and prosecutors, to rent space in exhibition halls where they can distribute information and meet their constituents. They also host debates or candidate night events.
But some maintain that large rallies where candidates are running for office or endorsing others are inappropriate events for fairgrounds and shouldn't be allowed.
"I just was furious," McLaughlin said, upon learning of the rally last month. "I'm going to have to go. I totally want to see what's going on," she said.
Some fair boards have already turned down Trump rallies on their grounds including those in Geauga and Portage counties.
In a news story in The Record-Journal in Kent, officials said allowing a Trump rally would violate the fair's IRS status and that they "are absolutely prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office."
The Federal Elections Commission says the IRS has the final say on the matter. The IRS could not be reached for comment Friday.
FEC spokesman Miles Martin] said he has been asked about rallies and tells people that they are permissible if the fair, in this case operated by the Delaware County Fair Board, charges the candidate fair market value to rent the facility.
The fair board is charging Save America, Trump's political action committee, $15,000 for the use of the fairgrounds from April 20 through Sunday, according to a signed contract requested by The Dispatch.
Chris Welker, interim fair manager, said that fee aligns with those for other big events.
Welker said that the fair board has no affiliation with Save America and is not hosting the rally, which will be held behind the grandstand in the midway area of the grounds.
"All we are doing is renting a space for their event. If any other party wanted to rent the grounds from us, we would charge the same," he said.
Delaware County is heavily Republican, including every county officeholder.
The county collects a bed tax, more than $1 million annually, for the fair, but has no say in how the fair operates or how it spends its money.
Tax provides upgrades in time for Little Brown Jug: Delaware County bed tax is windfall for fairgrounds
Opponents are organizing a protest to the Trump rally that is to begin at 4 p.m. Saturday at Delaware Hayes High School, 289 Euclid Ave., in Delaware. A march is to follow to the east side entrance of the fairgrounds. Organizers say the protest will be "to show respect for the American flag and Democracy."
Mindy Hedges, a long-time Democrat from Radnor Township and one of the protest organizers, said allowing the use of the fairgrounds for a political rally was "atrocious."
"We subsidize our fairgrounds with tax dollars," she said. "It unduly influences children. There's a lot of 4-H groups showing throughout the year."
dnarciso@dispatch.com
@DeanNarciso
Nonprofit Board "Powerhouse" #NonprofitBoards
According to a board development person the following describes what is a "powerhouse" nonprofit board:
"They make good decisions on behalf of their mission. They are nimble, influential, effective, and connected."
I would offer - great at policy, planning and evaluation - strategic and fiduciary. Powerhouse?
An Apology But Not From Boy Scouts USA #NonprofitBoards
Apologies from the "owner", in my opinion, matters. The New Jersey Diocese (the Roman Catholic Church of New Jersey) has apologized for its failings re child sex abuse by its priests! And yes, money helps and there will be some for the survivors but the apology - that's the start of healing. And who hasn't done that for equally if not even larger and know abuses by troop leaders: the Boy Scouts USA board. For shame but kudos to the NJ church.
Nonprofit Board Size #NonprofitBoards
When is a board too big? When it needs a committee that effectively does its work (you know, often called an executive committee - ick!). But when is it too small? Most states require at least 3 people but there are lots of issues that come with this size - issues of what's missing that is - particularly if one cares at all about the role of the community voice. What follows is an overview of what's going on in corporate America and yes, just as valid.
How Big Is Too Big?
By Bill Hayes
Listen to article (9:55 Minutes)
The best boards closely monitor their director count.
The median number of board members in the Russell 3000 has remained stable over the past five years, growing from 9.0 in 2016 to 9.1 in 2020, according to Corporate Board Practices in the Russell 3000, S&P 500 and S&P MidCap 400: 2021 Edition. But that median number hides the fact that the number of companies with smaller boards (fewer than six directors) declined, while those with larger boards generally increased in percentage.
Given that median board tenure over the same period barely declined (from 11 to 10.7 years), and that many companies are striving to improve gender and ethnic diversity on their boards, one would expect that larger boards would grow even larger. But can there be too much of a good thing? What's the optimal size for a board?
Norman Augustine, retired chairman and CEO of Lockheed Martin, says that the most appropriate answer is probably that "no one size fits all." To illustrate that thought, he points out that for boards of large companies, 12 members seems like a correct size. But, to him, 12 board seats would seem unwieldy for a small firm or a start-up. He believes for those businesses a five-member board works well. Overall, he says, "A board needs to have enough members that, if one or two encounter circumstances that preclude their attending a particular meeting, there are still enough members present to assure a thorough vetting of the issues at hand." He also points out that an odd number of board members can be valuable to ensure a minimum of tie votes, but that "if the board commonly has tie votes, it has a bigger problem than the size of its membership."
Adis Vila, an independent director and president and founder of Vila & Associates, agrees that different-sized firms need different-sized boards. She believes nine to 12 directors are ideal for a company with revenues between $1 billion and $3 billion, while seven to nine members works for companies with less complex business dealings. However, she did identify a scenario in which it would be acceptable to house a surplus of directors in one boardroom.
"If the firm anticipates retirements or is looking to have a more representative board, I believe a larger board for a set number of years to accomplish such goals is acceptable."
Perhaps more important than the size of the board is making sure key roles are occupied. Evelyn Dilsaver, chair of the audit committee for Ortho Clinical Diagnostics, Tempur-Pedic and Health Equity, identified the key roles as chairs of major committees, such as audit, compensation and human resources, and nominating and governance. She also states that the best companies are forward-focused, adding committee chairs in areas with a growing impact in the business landscape, including compliance and risk and technology. Grace Lieblein, who sits on the board of directors for American Tower, Southwest Airlines and Honeywell Corporation, concurs. "That is where the best boards stand out. Those boards look ahead to the company's future strategy and assess current board members against it. Gaps that are identified then become part of the board succession plan."
Looking for something to do
When there are too many people on a board, there is the danger of "looking for something for people to do," which could introduce roles that are not necessary on the board. Lieblein has seen this phenomenon not with roles, but with committees that have lost their usefulness. "I have seen the need for certain committees come and go, depending on the situation with the board and the company. Effective boards take action when committees become unnecessary and phase those out."
Augustine says it's more a matter of unnecessary directors than unnecessary roles. The board member he suggests you look out for? The single-issue director who is overly committed to holding the line on a controversial topic. "Members should be highly ethical, have sound judgment and be able to balance the various sides of complex issues. A board is not a debating society; it must be able to conduct thoughtful discussions among its members who will listen as well as share their views."
One major effect that occurs when a board is too large is the inability for directors to have their voices heard. Lieblein says, "A very large board runs the risk of lack of engagement by the directors. It becomes more difficult to have good dialogue at a board meeting."
Augustine believes that a board with too many members inevitably becomes ineffective and bureaucratic. "Having members who believe that they must have something to say on every matter, even after everything has already been said" results in unproductive meetings.
He also points out that having too many members on a board can lead to an erosion of personal dynamics. A large board often results in the executive committee taking over the role of the board to ensure that important tasks are accomplished. "This usurping of authority produces a backlash from the remaining members, who rightfully believe they are being silenced and are therefore unable to carry out their fiduciary responsibilities."
For Vila, the number of directors on the board is not as important as making sure that the relationship between fellow board members and between the board and management is closely monitored. She says that one of the lead director's most important roles is making sure all members communicate respectfully and have an opportunity to contribute.
"Directors who monopolize conversation; disrespect fellow directors, the CEO or the firm's executives; and come to meetings unprepared should not be reelected to the board," says Vila. "Annual evaluations that take on the 360 approach, so that each director gets a thorough review of his or her contributions, are a must."
Timeline for board rightsizing
The nom/gov committee often starts with the best of intentions when it ends up with a too-large board. Augustine, Lieblein, and Vila each point out that nonprofits are often plagued by overly large boards because of their desire to represent important stakeholders or ensure appropriate fundraising. As an example, Augustine says that when he was chair of the American Red Cross, the board hit a whopping 52 members at its high-water mark. Public company boards, like their nonprofit counterparts, can become overpopulated for positive reasons. Vila says it's acceptable for a board to raise its numbers because a member is preparing to retire or to meet its diversity goals. But, she adds, it's necessary to set a time for when the amount of directors should be reduced. "The board should ensure that a time limit is discussed and that there's follow-through to ensure those timeframes are met."
Every so often a board simply needs to bring in new perspectives, a step that Dilsaver says can lead to too many board members. "In the case of a refresh, boards will add additional members to allow for the transition and transfer of institutional knowledge. A board can also have too many members when they add new capabilities but are reluctant to ask someone to step down."
While it is difficult to ask a long-term board member to step down when the number of directors grows too large, the benefits can be immense for boards. It is often easier to maintain a collegial nature with a smaller, more intimate group, and both Augustine and Vila suggest that a friendlier board equals a more productive board. To Vila, "It's important to have a collegial board that reflects the stakeholder base and represents the skills required to exceed the strategy set out by the firm."
Augustine has observed that boards work best when members know each other well and can disagree with each other in a way that leads not to arguments but to insightful decisions. To underline the value of camaraderie, Augustine spotlighted his service on a working group of NATO. Language barriers and the observance of customs of far-flung nations led to a slow, awkward first meeting. Then, someone suggested the group have dinner at a restaurant. "We shared stories about our life experiences, our families and our hopes for the world. The next day, our meetings took on a totally new ambiance and progress moved at an altogether new pace."
A board that has gotten too sizeable can be restored to a smaller, more manageable number. Dilsaver believes that the key is a strong board chair, combined with a diligent nominating and governance chair and a clear process for board refresh, focused on the strategy of the company and the skills and capabilities needed on the board. Another valuable tool? "Many boards are putting term limits into place and applying them to existing directors, with a transition plan to replace those whose terms have expired. It's easier to have a discussion with a board member whose time is up, as long as they view it as applying to all equally."
When boards monitor the efficiency (and economy) of the board, Lieblein believes it is essential to have a mechanism in place that tracks the current skills and expertise of the board. "A skills matrix of current board members is a helpful tool for the board to understand where there may be 'too much' experience and where there are gaps. Then it's up to the lead director, the nom/gov chair and the board chair to take action to realign the board."
Rather than focus on what needs to be done to streamline unwieldy boards, Augustine points to one positive of well-run boards: They have a tendency to fix themselves. He says that members of boards that are too big usually can recognize that as the case and agree to reduction over time, often in the form of retirement by longer-serving members or resignations by members with other pressing needs to tend to.
"Each of the boards in my experience that were of unwieldy size were ultimately streamlined. The reductions were implemented over time."

redpajama_set_name: RedPajamaCommonCrawl


Still, critics of the case in L'Aquila are mistaken if they conclude that criminal negligence should never be linked to science misinformation. Consider cases in which science communication is intentionally undermined for political and financial gain. Imagine if in L'Aquila, scientists themselves had made every effort to communicate the risks of living in an earthquake zone. Imagine that they even advocated for a scientifically informed but costly earthquake readiness plan.
If those with a financial or political interest in inaction had funded an organised campaign to discredit the consensus findings of seismology, and for that reason no preparations were made, then many of us would agree that the financiers of the denialist campaign were criminally responsible for the consequences of that campaign. I submit that this is just what is happening with the current, well documented funding of global warming denialism.
More deaths can already be attributed to climate change than the L'Aquila earthquake and we can be certain that deaths from climate change will continue to rise with global warming. Nonetheless, climate denial remains a serious deterrent against meaningful political action in the very countries most responsible for the crisis.
Criminal negligence is normally understood to result from failures to avoid reasonably foreseeable harms, or the threat of harms to public safety, consequent of certain activities. Those funding climate denial campaigns can reasonably predict the public's diminished ability to respond to climate change as a result of their behaviour. Indeed, public uncertainty regarding climate science, and the resulting failure to respond to climate change, is the intentional aim of politically and financially motivated denialists.
Vi takker dr. Lawrence Torcello for tillatelsen til å republisere hans artikkel fra The Conversation.


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Tbilisi, Georgia-based STC Delta (Hall 1, Stand B118) has completed the prototype of the GG-122, an upgraded version of the widely deployed Russian BM-21 122mm 40-round artillery rocket system (ARS).
The BM-21 is normally installed on an unprotected Ural- 375D 6x6 cross-country chassis.
STC Delta has installed the rocket launcher on the rear of the more recent KraZ-63221 (6x6 ) cross-country chassis. This features a four-door fully protected cab, which is claimed to provide a high level of protection to the crew from small arms ' re and artillery splinters, as well as NBC attack.
GG-122 ' res standard 122mm unguided surface-to-surface rockets that are available from a variety of sources, having a maximum range of 40km. The solid propellant is capable of being 'fitted with a variety of warheads to enable di"fferent types of target to be engaged.
The GG-122 system currently has a standard optical sighting system as 'fitted to the original Russian BM-21, but consideration is being given to the installation of a computerised ' re control system. is will enable the system to come into action more quickly, and will provide greater accuracy.


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AP Top 25 Takeaways: Georgia becomes 1st major upset victim
AP Oct 13, 2019 at 12:07a ET
A college football season truly starts with the first big upset.
No. 3 Georgia became the highest-ranked team to lose to an unranked team this season. The Bulldogs were popped 20-17 in double overtime by 24-point underdog South Carolina, which had to play its backup quarterback after halftime — on the road.
This season had felt especially stagnant for the first six weeks, with the same six teams — Alabama, Clemson, Georgia, Ohio State, LSU and Oklahoma — sitting at the top of the AP college football poll since preseason. Only one top-10 team had lost to an unranked team until this weekend and that was then-No. 10 Utah falling at USC. Not exactly a season-changer.
Clemson's one-point escape against North Carolina a couple weeks ago was the closest thing to a real stunner, but an ugly win is still a win. All it cost the Tigers was the No. 1 ranking. If anything it might have been a needed wake-up call for Clemson. The defending champions certainly responded that way on Saturday against Florida State.
The Bulldogs were not so lucky. Georgia has had problems opening up its passing game this season and that turned into a major issue against the Gamecocks. South Carolina's run defense has been stingy, anchored by star tackle Javon Kinlaw, but the Gamecocks had been susceptible to the pass. No. 1 Alabama couldn't run it against South Carolina, either, but it didn't matter because Tua Tagovailoa dominated.
This needed to be a Jake Fromm game. Instead, the Georgia junior and three-year starter threw three interceptions, including a pick-six, and averaged 5.8 yards per attempt on 51 passes. First-year offensive coordinator James Coley, promoted after Jim Chaney left for Tennessee after last season, will most certainly be a topic of conversation around Georgia this week.
This was also another close game that got away from coach Kirby Smart, who made at least one odd decision late in the game, passing on a 57-yard field goal try by kicker Rodrigo Blankenship at the end of regulation. Then again, it was Blankenship's miss from 42 yards that ended it in overtime. Even All-Americans have bad days.
"We've got to look ourselves in the mirror as coaches, as staff and do a better job. We've got to help our kids out," Smart said.
What does this all mean?
First, Georgia still has the talent to make a playoff run and Fromm has been a great quarterback, but how can you not wonder if the Bulldogs would have been better off if Justin Fields did not transfer to Ohio State? The final verdict on that will probably come in January.
Second, the upset undercuts the possibility of the Southeastern Conference getting multiple teams in the playoff. The chances of that happening were probably not that good anyway. The SEC contenders look poised to pick each other off for the next couple months. No. 5 LSU handed No. 7 Florida its first loss, leaving no unbeaten teams in the SEC East. Throw in an unexpected loss by Georgia, which had its 15-game winning streak against the East snapped, and the odds of having two SEC playoffs representatives becomes remote.
Lastly, because this seems to be a topic: How does this affect No. 9 Notre Dame (6-1)? The Fighting Irish held off USC and need to run the table to stay in the conversation. The idea that somehow Georgia, which beat the Irish last month, losing to South Carolina is the thing that could keep Notre Dame out of the playoff is kind of silly.
RED RIVER DEFENSE
The Texas game got the Oklahoma defensive coordinator fired last year. This year, under first-year coordinator Alex Grinch, the No. 6 Sooners tied a school record with nine sacks among its 15 tackles for loss in a victory against the 11th-ranked Longhorns.
For the first time in forever, the Sooners might have enough defense to win a playoff game — or two.
Linebacker Kenneth Murray was everywhere and Texas managed just 310 yards and 4.24 yard per play. In two games against Texas last season, Oklahoma allowed 938 yards and 6.51 yards per play. Texas won the first meeting in 2018 at State Fair, and the day after coach Lincoln Riley fired Mike Stoops.
Dumping Stoops did not make much of a difference, but Oklahoma's offense was good enough to win another Big 12 championship and get the Sooners into the playoff, where they got rolled by Alabama to fall to 0-3 in the CFP.
Riley hired Grinch away from Ohio State in the offseason to try to come up with a solution. Even a passable defense to combine with Riley's almost unstoppable offenses could make Oklahoma a real threat to Alabama and Clemson.
The 39-year-old Grinch traces his roots to Division III powerhouse Mount Union. He really made a name for himself two seasons ago at Washington State. He got lost in the shuffle at Ohio State last season as co-coordinator of a defense that struggled. It's all his show now and the Sooners finally look like a team that can win when its offense has an off day — like Saturday, when Jalen Hurts had a couple of turnovers in the red zone that kept Texas close.
"They did a really good job swarming the football," Texas quarterback Sam Ehlinger said.
AROUND THE COUNTRY: Who had Oklahoma-Texas with more defense than Florida-LSU? … At the halfway mark, who is your Heisman Trophy front-runner? Tagovailoa threw his first interception of the season — and four more touchdown passes against Texas A&M to give him a 27-to-1 ratio. Joe Burrow threw three TD passes against the Gators and is at 25-to-3 TDs to INTs. LSU is at Alabama Nov. 9. … USC is 3-3 after a difficult opening six games. The Trojans still do not have an athletic director so there is no reason to expect a move soon on embattled coach Clay Helton, but nothing has happened to stop the march toward the inevitable. … Do not pencil in another Big 12 championship game rematch between Oklahoma and Texas. No. 22 Baylor, which improved to 6-0, and Iowa State, which has won two straight since losing on a last-second field goal to Baylor, look like legitimate contenders. At least for the second spot opposite Oklahoma … No team in the country is a better bet to play a close game than No. 17 Arizona State. The Sun Devils' latest fantastic finish came against Washington State, with freshman quarterback Jayden Daniels leading a late game-winning touchdown drive. In two seasons under coach Herm Edwards, Arizona State is 6-2 in games decided by four points or fewer. The Sun Devils have played 14 games against Power Five teams the last two seasons and all but two of them have been decided by seven points or less. … No. 8 Wisconsin now has four shutouts after blanking Michigan State. The Badgers' defense has scored as many touchdowns (four) as it has allowed. Badgers and Buckeyes in Columbus in two weeks. … At the other end of the Big Ten, Rutgers was shut out for the third time this season and has scored just seven points in four Big Ten games. Wisconsin does not play Rutgers so we will not see if it is possible for a team to score less than zero … Louisville has doubled its win total from last season under first-year coach Scott Satterfield after dropping 62 with a freshman quarterback on previously unbeaten No. 19 Wake Forest … The biggest upset you probably didn't notice: Bowling Green, a 26½-point underdog, beat perennial MAC contender Toledo 20-7. … The type of loss that gets a coach fired: Vanderbilt was wiped out at home by UNLV. Commodores coach Derek Mason is in trouble with his team at 1-5.
FBS (I-A)


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Disney Mice
Here are some questions on mice that have appeared in Disney films.
Fun: (2.07) Difficulty: (2.2) Quiz ID: #8109
Category: Entertainment > Disney Submitted By: tigersrule
Which of the following movies has a greedy uncle that likes to play with his food, especially mice?
Gus and Jaq are mice that appear in the movie "The Rescuers".
What is the name of the stepmother's cat (who likes to chase mice) in the movie "Cinderella"?
What colour are Mickey Mouse's shoes when in his everyday outfit?
What is Minnie Mouse's real first name?
In the movie "The Rescuers Down Under", what is the name of the main male mouse?
In the movie "The Rescuers Down Under", Miss Bianca is the representative for what country in the Rescue Aid Society?
In the movie "The Great Mouse Detective", the character "Basil" is voiced by whom?
Your Answer: 2 words, 12 letters. There are 3 alternate answers. Show Hint
Name the mouse that appears in the Disney movie "Ben and Me".
Your Answer: 1 word, 4 letters. There is also an alternate answer. Show Hint
Timothy B. Mouse is the name of the mouse that appears in the Disney movie "Dumbo".


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The Ellicott City Firehouse Museum
Located in the heart of the historic district, the Firehouse Museum explores the unique challenges of fighting fire in late 19th and early 20th century Ellicott City. The city's topography and architecture — steep, sloping streets tightly lined with adjoined wooden buildings — provided prime conditions for the spread of fire while inhibiting the transport of water. In 1889, a group of volunteers constructed the firehouse at a cost of $500 dollars. Conveniently situated on a small, triangular lot, the original building was simply designed to house the hand-drawn and horse-drawn fire equipment. It operated until 1924, when the firehouse relocated to 8320 Main Street, and moved again in 1937 to the building known today as the Wine Bin. In 1995, the station moved to its current location on Route 103.
The building served as municipal office and a meeting hall from 1906-1935 and later as a reading room for the Howard County Library. With decline in use, the library was closed November 15, 1988.
The exterior has since been restored to its original design, and the interior refurbished. This was accomplished through the cooperative efforts of former County Executive Elizabeth Bobo, Howard County Employment and Training Center, and the Home Builders Association of Maryland. The site was dedicated as a museum in 1991.
From May through December.
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Home Transfers Chadli the next to leave?
Chadli the next to leave?
The Memphis Depay rumour that we picked up on earlier today is sweeping the news aggregators this afternoon with some sites predictably citing it as a done deal. That's probably some way short of the truth but if Spurs are looking to bring a wide man into the club, it could mean the end for Belgium international Nacer Chadli.
In pre-season, a number of our fringe players have been enjoying a resurgence. Erik Lamela is hitting the back of the net on a regular basis while Lewis Holtby has been scoring and assisting both in North America and Scandinavia.
All the while, Chadli's name has been absent and there are several links being made which would all add up to an early sale for the man who joined us just 12 months ago. The most popular of these stories connects the Belgian as part of the deal which could potentially bring Morgan Schneiderlin to White Hart Lane.
Are Nacer Chadli's days as a Spurs player numbered or does he deserve a second chance to carve out a career at White Hart Lane?
Matthew Harris
Andy B August 6, 2014 at 5:41 pm
Get rid of Chadli, Paulinho and Dembele.
Bring in Konoplyanka. Forget about Depay who is overrated and over priced.
h20poloman August 6, 2014 at 8:12 pm
I agree – Konoplyanka looks a better bet to me than Depay. From the clips I've seen of Depay he doesn't appear to be aware of what's going on around him. Yes, he can do a few tricks but often seems to run down blind alleys; sound familiar? Kono is more aware, more experienced and will cost less. Definitely get rid of Chadli and Dembele who looks good on the ball but has no end product.
john August 6, 2014 at 5:53 pm
depay overated? are you crazy,this kid could be the real deal,hes a risk i give you that but theres not many players of his potential out there.
Joe August 6, 2014 at 5:54 pm
On last seasons performance and goals scored Dembele, Chadli and Paulinho in that order but Pochettino might work his magic on any one, so if in a Tottenham shirt I will be supporting all of them.
SP August 6, 2014 at 9:29 pm
I think Chadli has more to offer than most people recognize. Happy for Poch to see what he can do with him, myself.
DawidRSA August 6, 2014 at 6:17 pm
Depay would be amazing. Let Chadli go. Let Dawson or Chiriches go for Musacchio. And Sandro for Schneiderlain. And then a striker. Bony or Huntelaar. Lennon can also go, I'd rather give Townsend a chance.
Ken August 7, 2014 at 3:40 am
Hell Kick Dawson in the rear end and shove him out the door he is the worst!
TommyHarmer August 6, 2014 at 6:43 pm
Yes, let's give Townsend a chance, then he can race through, refuse the simple pass, and blast the ball into row Z!!
gav August 6, 2014 at 8:13 pm
Townsend needs to improve lots!!! Chadli can leave, lamela is gonna be a hit this season.
Anon August 6, 2014 at 10:43 pm
Chadli has been played out of position regularly, he is regarded by the Belgian coach as "the best all-round player I have ever trained". He has power pace and skill (one of his goas was perhaps the goal of the season). If he is sold it will be a mistake.
Richy Spur August 7, 2014 at 1:04 am
I say give Chadli one more season. He has a lot of potential and I think some of last year's buys will come good under the new manager. Defense needs to be sorted first and foremost.
Mertscieny August 7, 2014 at 10:02 am
Thursday night football will soon be back for you folks.
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