King of the Board: Part 2 – Special General Chaos

This is Part 2 of the King of the Board series. Names of people and organizations have been left out for legal reasons.

Chaos and mayhem are some of the words that could be used to describe what occurred at a recently held Special General Meeting of a financial institution, with battlelines drawn between an agitated and dissatisfied membership, and a belligerent President of the Board that refused to step down despite a motion to dissolve the Board.

Part 1 of the King of the Board series details the primary concerns that led to several members signing a petition to call a Special General Meeting to review the conduct of the Board of Directors in relation to the management of the finances and the general management of the institution, and to determine the continued existence of the present Board and its necessary replacement.

However, it seems that the deck was stacked against the membership having their concerns resolved even before the meeting occurred. The mandatory notice to inform the public of the meeting adjusted the wording of the purpose of the meeting from what was on the petition, leaving out significant portions. Also on the notice was the indication that there would be no other business apart from what was on the agenda. This statement would later be used like a sledgehammer against the membership at the meeting.

Several members realised that accepting the agenda as is, with the omitted wording, would be extremely problematic in receiving a resolution to their issues, and before the agenda could be adopted, they passionately argued that the agenda should be restored to what was written on the formal petition for the meeting.

From the very start the President made it blatantly obvious that he was completely unwilling to submit to the wishes of the membership. He cited (his interpretation of) the law as the rather flimsy, and possibly false, reason for his refusal to capitulate to the members’ demands, even though it was revealed at the Special General Meeting, and at the previous AGM, that he, the Board and the General Manager have allegedly circumvented those very same laws on multiple occasions.

Shockingly this plea from a multitude of members to have the agenda adjusted as requested, and the President’s absolute refusal to budge lasted for two hours, baffling many present as to why the President was being so obstinate. Even members that were neutral at first expressed that, based purely upon the President and Board’s refusal to honour the membership’s wishes, they should be removed from office.

Two supporters of the Board then moved and seconded a motion to adopt the agenda as is, and without putting the motion to the floor to be accepted, despite being asked to do so, the President decided to proceed with “his meeting”.

However, during the next item on the agenda, a presentation by the Supervisory and Compliance Committee, an extremely damning report was given regarding the actions of the Board and General Manager.

The Supervisory and Compliance Committee is mandated by law to perform supervision of the Board and Management, and the general management of the institution. This gives them the right to inspect any document within the organisation, review minutes of meetings, policies and procedures, and interview any volunteer or member of staff, to ensure that the actions and decisions of the Board, committees, management, and staff are in compliance with the law.

What was revealed in the report from the Supervisory and Compliance Committee that the Board and General Manager had been systematically ignoring their request for information, failing to hand over minutes of Board meetings, failing to show up for scheduled meetings, actively hindering the committee in performing its duty by instructing staff to not cooperate with the committee’s requests, overall creating a hostile and combative working relationship between the committee and the Board.

When the committee attempted to gather more information about the Board’s decision to make a significant investment in an unregulated company they were hindered in these efforts. As was relayed in Part 1, during the recent Annual General Meeting some months ago it was revealed that the national regulatory authority had previously informed the Board that the investment was illegal, and they were instructed to retrieve that investment. At the AGM the membership also gave a mandate to the Board to recover their hard-earned monies that was invested without their approval.

It was also reported during the Special General Meeting that prior to a very important scheduled meeting between the committee and the Board to discuss the return of the investment in the unregulated company, the committee informed the Board that the General Manager should not be in attendance. Despite this notice the General Manager showed up at the meeting anyway, and when asked to leave two Board members left as well. This resulted in there being a lack of quorum of Board members and the meeting had to be cancelled.

The Board then, without the involvement of the Supervisory and Compliance Committee, made a unilateral decision and recouped part of the investment, with the remainder still outstanding.

Also brought to the fore by the committee that recent renovation works at the main branch took nearly five (5) times as long as originally projected, and more than double the budgeted amount. When the committee requested records in relation to the renovation works several documents were missing. It was also pointed out that during the renovation the institution rented not one but two separate buildings to house displaced staff, with all staff in one building, while the General Manager was singularly housed in the second.

Due to the constant lack of cooperation from the Board and Management the committee sought legal advice on the situation. A review of the act by the legal representative confirmed that the committee shall have access at all times to all books and documents of the institution and that restricting the access to such documents by the Board and General Manager was in contravention of the act.

Despite this legal opinion on the matter the lack of cooperation continued. It was only after the submission of the petition for the Special General Meeting that several documents that had been requested months prior, were suddenly sent to the committee. However, it was noted that those documents did not come from the Secretary of the Board as they should, but instead were received from the General Manager.

The committee also indicated that upon submission of the petition, several Board members that were not in favour of the actions of the President resigned from the Board. The committee then read an extremely damning letter from one of the former Board members which is highly critical of the President and his actions.

The remainder of the saga of this meeting of chaos will be given in Part 3 of the King of the Board series.