Wednesday, October 30, 2013

The Minnesota Orchestral Association Governance, Part 1

For the last 19 months, I've been bothered by questions regarding the Board of Directors of the Minnesota Orchestral Association.  Specifically, I wondered to whom they are accountable as they work managing the organization.  At first, I thought the answer must be their community of supporters and music lovers, i.e. their customers.  However, observing their behavior toward these people over the last 19 months I have the strong impression that they think they are not accountable to anyone but themselves.  How does someone become a Director on the Board?  What has the governance been like in the past?  Are there specific duties regarding fiduciary responsibility?

These questions festered inside my mind for months, and I brought them up to people I know connected with the MOA in some way.  They did not know the answers.  Well, there had to be a charter or some governing document, but where?  One friend suggested I contact the MN Attorney General's office, which I did.  The AG's office steered me to the Business Services area of the MN Secretary of State's office.  I received a quick response from them regarding my questions: for a modest fee, I could obtain copies of the documents.  All I needed to do was to go to this site, enter either the business's name or file number (that I received from the Secretary's office), choose what documents I wanted, pay the fee, and either I could download the documents immediately (if available) or the copies would be mailed to me.  I ordered copies of the original filing of the Articles of Incorporation in 1907 and all subsequent amendments filed with the MN Secretary of State.

The documents arrived last Friday, much faster than expected.  I had also expected documents with a lot of legalese but was pleasantly surprised that they were easy to read and understand.  The photocopy quality on some was subpar, but with a magnifying glass, I could read them.  In this post, I'd like to talk about the original Articles of Incorporation and subsequent amendments through 1977.  In part 2, I'll talk about the 1991 amendment and its effect on the current Association.  I've requested information from the MOA for this second part, as well as information from a former President, and once I have it, I'll write the second part.  (You can find online the Articles of Incorporation and the Amendments, as well as the By-Laws, at the Save Our Symphony Minnesota website.)

ORIGINAL ARTICLES OF INCORPORATION

This document begins "We, the undersigned, do hereby associate ourselves together, for the purpose of forming a corporation...."  The date of filing with the MN Secretary of State was October 16, 1907, but the document was signed and notarized on September 11, 1907 by the first Board of Directors and witnessed by the first Music Director, Emil Oberhoffer, and the Notary Public.  There are four Articles, summarized as follows:

Article One:  This article establishes the corporation's name: "The Orchestral Association of Minneapolis."  Second, the general purpose: "the advancement of the knowledge and love of music, the education of musical taste, and the providing through concerts, lectures, and other means, the opportunities to hear, enjoy and understand the best music." Third, the general plan of operation to include giving concerts, lectures and other entertainments, and courses of instruction.  They planned to charge for each activity but only a price to cover the expenses of each activity, "it being the intent of this corporation that it shall not be organized or exist for pecuniary profit."  They were serious about maintaining a non-profit status for their corporation.  Fourth, the location of this business in Minneapolis, MN.

Article Two:  "Any person may become a member of this corporation by paying or obligating himself to pay to the corporation the sum of One Hundred ($100.00) Dollars per annum for any one or more years."  The Association would have a membership, and one open to anyone -- as long as you could pay the "dues," you could be a member.  This article also talks about the annual meetings of the membership, and that each member in good standing "shall be entitled to one vote in person or by proxy for each full one hundred ($100.00) dollars so paid...in that year."  Anyone can lose their membership simply by not paying.

Article Three:  This article is short and to the point: "There shall be no capital stock of this corporation." Investors would expect some sort of monetary return on their investment, i.e. the stock they'd purchased.  By not offering stock to investors, the founders kept any kind of for profit activity out of their Association.  They wanted the benefits that people received from this Association to be hearing and learning about "the best music," not selling a product for profit that could be shared among stockholders.

Article Four:  This article covers matters of governance and management of the corporation:
-- In paragraph one, they establish that the government and management shall be vested in a board of fifteen directors, and a president, vice-president, secretary and treasurer -- the last two could be one and the same person.
-- Paragraph two establishes how the directors will be elected -- out of the whole membership -- and when the annual meeting would occur when the directors were elected, i.e. the first Tuesday of April each year.
-- Paragraph three establishes that the officers will be elected out of the membership or the Board at a meeting of the Board immediately following the annual meeting.  Each officer's and Board member's terms in office will be one year.  The Board will have the power to fill any vacancies in the Board or officers during each year.  The Board may establish, maintain, and amend rules and by-laws for governing the corporation.
-- Paragraph four lists the men who formed the first Board of Directors, and who the President, Vice-President and Secretary/Treasurer were.

This document was then signed in the presence of a Notary Public and duly notarized.  The Secretary of State's office added its own short paragraph regarding the document's filing.

The original founders of the Association created a clear structure for it: a paying membership out of which they elected the Board and Officers.  The Board and Officers were then accountable to the larger membership in doing their jobs of governing and managing the Association.  And anyone could be a member of the Association.

SUMMARY OF AMENDMENTS THROUGH 1977

The most often amended article was Article Four.  In 1914, the amendment changed the number of Directors from 15 to 20.  In 1923, the amendment specified the number of Directors to be "not less than fifteen nor more than twenty-five."  In 1939, the top number changed from 25 to 50, plus "said directors need not be members of the corporation."  They opened up the leadership of the Association to non-members, but the Board and Officers were still accountable to the membership.  In 1947, they changed the number of officers to "a president, one or more vice presidents, including an executive vice president, secretary and treasurer...."  They also changed the annual meeting date to the second Friday in July.

In 1956, they changed the name of the corporation (Article I) to "The Minnesota Orchestral Association."  They also made changes to Article Four: they changed the number of vice presidents back to one, the annual meeting date to the third Thursday in July, and the terms of office for board members and officers from one year to three.  In 1965, the only change was to move the establishment of the annual meeting date to Association by-laws.

In 1977, they changed membership requirements (Article II) from anyone who pays $100 per year to anyone who meets the qualifications established by the Board and ratified by the membership, and each member has one vote either in person or by proxy.  This is the first time they made any changes to Article Two.  They also changed Article Four, adding a Chairman to the other officers elected from the board or membership, and changing the terms in office from 3 years to "shall hold office for terms in accordance with the terms of the By-Laws of the corporation."

By the Minnesota Orchestra's 75th anniversary in 1978, the Association's structure had not changed drastically, but the officers and Board of Directors were beginning to pull away from the Articles of Incorporation to describe their government and management of the Association and moving toward by-laws.  I find it also interesting that membership was no longer open to anyone who could pay the dues, but were chosen according to requirements established by the Board; in other words, the Board chose the membership.  This is a move away from accountability to a larger membership and allows the Board to control who is a member, i.e. to whom they are accountable.

6 comments:

Anonymous said...

Very good. Thank you. I eagerly await part II.

Dave Assemany said...

Fascinating. I look forward to the next installments!

Barry Monroe said...

Save Our Symphony Minnesota has also posted some documents, including the MOA Bylaws: http://www.saveoursymphonymn.org/documents-pdf-files.html

Gina said...

Barry Monroe, thank you! I've been trying to get my hands on the bylaws for the last few days. You also have all the documents I have regarding the Articles of Incorporation -- I'll provide a link in my post.

Thank you, thank you, thank you!
Gina

Catherine B said...

The current composition of the Executive Committee includes the current chair and immediate past chair. There doesn't seem to be a vice chair/president or chair elect. Yet I can't see where the bylaws reference such a composition of the committee. What happened to the vice chair? How long has an immediate past president served on the Executive Committee? I don't see a provision in the bylaws for a future office of the outgoing chair. Why have these changes not been made to the bylaws?

Thanks for everyone's efforts!

Catherine B

Gina said...

To Catherine B. -- I cover the questions you bring up in Part 2 of this series.

The current Executive Committee includes (from MOA website):
Jon Campbell, Chairman of the Board
Richard David, immediate past Chair
Michael Henson, President and CEO
Nancy Lindahl, current Secretary and Chair-Elect
Patrick Bowe, Treasurer
Nicky Carpenter, Life Dir.
Kathy Cunningham, Life Dir.
Luella Goldberg, Life Dir.
Doug Leatherdale, Life Dir.
Ron Lund, Life Dir.
Karen Baker, Dir.
Jack Eugster, Dir.
Ben Fowke, Dir.
Jane Gregerson, Dir.
Jayne Hilde, Dir.
Karen Himle, Dir.
Nancy Jamieson, Dir., WAMSO Pres.
Allen Lenzmeier, Dir.
James Melville, Dir.
Chris Policinski, Dir.
Teri Popp, Dir.
Gregory Pulles, Dir.
Jo Ellen Saylor, Dir.
Gordon Sprenger, Dir.
Georgia Thompson, Dir.
John Wilgers, Dir.

In the Bylaws, Article II, Section 2, Executive Committee: "The Executive Committee shall consist of the Chair, the Chair-Elect, the immediate past Chair, the President, the Secretary and the Treasurer, and the President of WAMSO-Minnesota Orchestra Volunteer Association and, in addition to such persons, no less than ten (10) and no more than fifteen (15) Regular Directors and such number of Life Directors as shall from time to time be elected to such Committee...."

Please read part 2 of this MOA governance series, Catherine. Thanks!