2009 Annual Meeting of American Academy of Actuaries: explanation

[JMO]

This thread is intended to be a brief recapitulation of why we are asking for proxies for the upcoming academy meeting. We do not want to have another monster thread, so I am asking everyone to please stay on topic.

First, Tom's candidate statement. Note that this is a work in progress and may be edited from time to time. I quote excerpts from the version out there today.
http://www.bakosenterprises.com/Candidate/

Originally Posted by Candidate statement from Tom Bakos

This has happened all rather quickly but what has motivated me is a desire to improve the Academy by making it into a organization more accountable, more responsive, and better respected by its members - and, therefor by the public.

So, in addition to running for election in, even as the Academy recognizes, an unprecedented contested election with proxy voting so that all members will have, at least, an opportunity to vote, I intend to initiate a project very shortly to amend the Academy Bylaws to provide for the direct election of all Board members and Officers by a direct vote of the membership.

I hope the current Academy leadership will recognize the great merit in this and will particiapte in reforming the AAA so that it can better serve its members needs.

What the Academy did to reduce our membership rights.
http://www.bakosenterprises.com/Acad...%2010-8-09.pdf

Originally Posted by excerpt from open letter by Tom Bakos

there are 4 Regular Director positions with terms expiring in 2009 (Bell, Emma, Herget, and Steiner) but only three candidates are being presented in the Nominating Committee slate to be presented to members on 10/26/09.

Tom first pointed out this activity and concerns about the way director elections are currently handled back at the end of August.

Originally Posted by tbakos

There could be close to 1,000 Academy members at the Academy Annual meeting this year. Having it in conjuction with the SoA Annual meeting (usually well attended) almost assures that.

And, typically, the names of the candidates are not known to the voting members before the Academy Annual meeting. (I know, this gets to sound more bizarre as we get deeper into it.)

Then there is this: The Academy Board, apparently, believes that they have amended the Academy Bylaws in order to split the Secretary/Treasurer position in two reducing by one the number of regular directors the members "elect" in order to keep the total number of directors at 29. So, it is very likely that the members will only be offered 3 candidates to elect at the Annual meeting.

If that is what is presented to us on October 26 I would hope the members present would howl.

I will, however, explore further the proxy route. Must be prepared!

New material added Oct 19. Petition to amend bylaws
Petition for membership vote on our proposed amendment:

Originally Posted by tbakos

Pleaase see: http://www.BakosEnterprises.com/Bylaws

for information on a member initiated effort to amend the Academy Bylaws in order to provide for the competitive election of all Academy Directors and officers.

This Bylaws amendment is intended to give all Academy members (MAAAs) an oportunity to vote for Directors either in an electronic election or by mail. That is, you would not need to be present at an Academy Annual meeting to get an opportunity to vote.

This would provide in the Academy a board election process just like members of the CAS or SOA now enjoy.

You can help by commenting on or making suggestions to the proposal and by signing or getting signatures on a petition to make this happen.

If you are attending the Academy Annual meeting in Boston on 10/26 or the SOA meeting that wraps around it, you will have an opportunity to sign a petition in person.

Quote from the Bakos bylaws site:

This is a member initiated Bylaws amendment process.

The Bylaws may be amended per Article XV (see below) by request of "not less than 3% of the members". A conservative estimate of the minimum number of member signatures required to initiate this amendment process is 500.

I am proposing that the members join with me to petition for the amendment of the Bylaws of the American Academy of Actuaries so as to provide for the direct election of all directors and officers by the members (i.e. MAAAs).

You may help initiate the process to amend the Academy Bylaws in one of three ways:

Download, sign, and return to me the Petition Form for 1 Signer. Information on how to return is on the form.

Download one or more copies of the Petition Form for 20 Signers and use it to collect signatures form Academy members you know who want to amend the Academy Bylaws so as to allow for the direct election of all directors and officers by the membership. Then return the completed Petition forms to me as indicated on the form.

If attending either the Society of Actuaries Annual meeting (10/26 - 10/28/09) or the American Academy of Actuaries Annual meeting (10/26/09 Luncheon meeting in conjunction with the SOA meeting) in Boston, you may sign one of the many petition forms that will be in circulation there.

Look for me or one of many others who will be collecting signatures on petition forms to initiate this important Bylaws amendment.

Information about the petition.

Originally Posted by tbakos

I see you have noticed that the design of the amendments is specifically to provide for distribution of Academy board members by practice area with casualty one of the practice areas.

I think the proposal (see the Outline) does this but if you or anyone can suggest a better (but it should be simple) way to accomplish this, please let me know. My intention is not to change the basic structure of the Academy board - just how board members are elected.

Most important - the petition is not a vote to amend the Bylaws. Signing the petition will not amend the Bylaws in any way. Signing the petition will be a way to give Academy members the opportunity to vote on a specific amendment to the Bylaws - wording will be available in a couple of weeks, I hope following any comment on the Outline.

Members who sign the petition will have an opportunity to read and review the actual amendment language and vote for or against the amendment. For example, you can sign the petition to get an opportunity to vote and, if you disagree with the amendment language after reading and considering it, you can vote against the amendment.

We believe the amendment language will substantially maintain the same distribution by practice area as in the current board. The only difference will be that under the amended Bylaws members will have an opportunity to elect all directors and officers rather than, effectively, having them appointed by the board.

While that may not be perfect, it will we think, tend to make the Academy board and officers more accountable and responsive to members. Besides, we ought to be able to elect our board.

Another quote from the Bakos bylaws website.

Important Information
By signing a petition you will only be initiating a process that will allow you to vote in the future on specific language of a proposed Bylaws amendment. These Bylaws amendments will be drafted so as to provide every member of the Academy with an opportunity to vote in a competitive election for directors and officers they feel will be good representatives for them and the profession - as is the current process for the CAS and SOA.

We will limit amendments to only those necessary to accomplish the purpose as outlined in the OUTLINE (see downloads section). The OUTLINE is intended to provide you with a clear description of the Bylaws amendments we are proposing so you can determine whether or not you wish to participate in initiating this amendment process.

You will see that the OUTLINE attempts to provide for a fair distribution of directors and officers among the various practice areas present in the U.S. actuarial profession.

Again, your signature on a petition only initiates a voting process. If you feel that the final proposed Bylaws amendments are not appropriate, you may vote against them in the election run by the Academy even though you signed a petition.

A diagram comparing the proposed governance structure to what is there now.
http://www.bakosenterprises.com/Byla...%20Diagram.pdf

[Dumbdumb]

The above is all true, but it's not the impetus behind this push to get Tom elected - it's simply another example of the AAA board ignoring members wishes as well as any kind of common sense.

What caused the initial stir was the AAA board getting rid of Bruce Schobel as President Elect, with no discussion or clear reason. It had all the looks of personal and political agendas from the board. Bruce won $600,000 in a settlement from the AAA who admitted no wrongdoing.

Bruce agreed in the settlement not to run for AAA board for a couple of years. For those that believe the AAA board is acting with personal and political (and perhaps monetary) agendas, this stipulation adds fuel to the fire.

At least one AAA board member stated at the meeting where Bruce was turfed, that the reason for his removal was Bruce's opposition to FEM. Of course that's not a reason to get rid of a President elect, and this is compounded by the appearance that some tried to smear Bruce's reputation to make this happen.

That action against Bruce led many people to believe that the AAA board is running out of control and needs to be stopped by the membership.

The information that JMO's posted above concerning the rearrangement of the board's make up is not the primary cause of this contested election. It's simply amptjer example in a long string of events showing how the AAA board is acting with disregard to it's membership.

My summary is clearly biased by my interpretation of the events. If you are an AAA member, you owe it to yourself to discern facts, of which there are some, and decide if you draw the same conclusions I and many others have.

[JMO]

My take on the Schobel case is that it brought to light the governance issue. But even if the Schobel thing had never occurred, there are important issues, and we should focus on them.

We are specifically concerned about action by the existing Academy leadership to attempt to change the bylaws to further increase their power. The membership ought to be electing the entire board, and our next step (this is no secret) is to work on a total overhaul of the way the Academy is governed through amending the bylaws. More on that in the future.

Who was it said that power corrupts, absolute power corrupts absolutely? (I think it's an overstatement, but many people who get power do tend to exercise it unrighteously.)

[Katie.]

Originally Posted by JMO

My take on the Schobel case is that it brought to light the governance issue. But even if the Schobel thing had never occurred, there are important issues, and we should focus on them.

The Schobel issue is somewhat of a distraction, and as someone said, it brings personalities into this when that is not really the main issue. The main issue is that the board seems to make arbitrary changes without membership approval that strip away the rights of the membership. Maybe this always happened, but the Bruce situation brought it all to light.

[Me Too]

(Non-consecutive) posts from other threads that I find relevant to this one:

Originally Posted by tbakos

I don't see it as forcing myself on anyone. If I get elected it will be becasue the members have elected me.

But, you are right - it will be interesting to see what "they" do. I intend to inform them of this in advance so they won't be surprised. I'm not sure a fight would be in their best interest. They may claim that there isn't a 4th Regular Board position but they would have to argue a Bylaws amendment they haven't yet informed the members of is in place.

Originally Posted by Will Durant

Note: The Academy has just posted amended bylaws.

http://www.actuary.org/yearbook/2009/bylaws.pdf

Apparently their position is that the split of treasurer/secretary is allowed by Article 15.

Not sure if the idea that reducing by 1 the number of elected directors doesn't affect the substantive rights of members.

Originally Posted by TomB to AAA

Please explain to me and the membership:

1. Your logic in, apparently, believing that reducing by 1 the number of directors directly elected by the members does not affect “the substantive rights of the Academy’s members”.

2. Please explain how this revision fits into the category “administrative”, editorial”, or ‘technical” such that a member vote is unnecessary.

It seems incredible to me that the Academy Board would have so little respect for member rights.

Originally Posted by tbakos

I agree with you and, I think, it is a very reasonable expectation that the members get to decide if their right to elect directors should be diminished by one. This is one of the changes made:

Regular Directors.

Elected Directors who are not
special Directors shall be regular Directors. Each
year the members shall elect a number of regular Directors
to bring the total number of elected Directors

to 17.

The "17" was "18" before the amendment.

See - we are already having an efffect. If it wasn't for the Actuarial Outpost the Academy would not have addressed a Bylaws change they claim to have made on 5/21/09 - almost 5 months ago!!!

Originally Posted by tbakos

Also note the following:

Prior to the posted revision members elected directly in total 10 of 29 directors - just over 1/3rd - so if a 2/3rds vote is required the member elected directors could just barely defeat it.

After the claimed revision members will elect directly only a total of 9 of 29 directors - that is less than 1/3rd - meaning that the member elected directors could not defeat a motion that requires 2/3rds to pass.

That is a substantive member right taken away by the amendment the Academy Board claims to have made.

Originally Posted by bdschobel

Many types of motions require two-thirds approval, so 20/30 would be sufficient.

Going from 10/29 to 10/30 still reduces member-elected representation on the Board, and to the critical one-third level that is functionally the same as lower than one-third.

Bruce

Originally Posted by tbakos

I'll follow up again with Andrea Sweeny and Mary Downs on this Bylaws amendment - try to get minutes or, at least, the motions passed at that meeting.

My understanduing is that the Academy board gave very little attention to the implementation of the split of the Secretary/Treasurer position - something that they started thinking about about a year ago.

The writing of the Bylaws amendment was apparently delegated to a staff person after the 5/21/09 vote to spluit the position and appears to have been simply posted (almost 5 months later) without any real vote even by the Academy Board on the actual amendment language.

The Academy Board seems to rely on the following language from Articel III, Section 5 as authority to do whatever they want:

SECTION 5.

Duties and Powers. The Board shall have,

in addition to the powers and authority expressly conferred
upon it by these Bylaws, the right, power, and authority
to exercise all such powers and to do all such
acts and things as may be appropriate to carry out the

purposes of the Academy.

That is scary!

Originally Posted by sideout1212

Am I the only one that is a little confused on the numbers? I keep seeing statements that there are 4 positions and 3 candidates, shouldn't everyone be saying 5 and 4? All 5 open positions (based on Tom's open letter) are regular directors that get voted in aren't they?

Originally Posted by bdschobel

The new president-elect is Ken Hohman. [...]

The fact that only four member-elected directors are being nominated is evidence that the secretary-treasurer position was split in two. If not, there would be five directors nominated. Ron G+13 is completing the term of Art Panighetti, who is becoming Life VP. Art had one year to go on his term. Ron will presumably serve a full 3-year term after he completes this next year. Ron spent quite a few years as the AAA's Senior Pension Fellow, until just about a year ago.

Bruce

Originally Posted by MountainHawk

Let me see if I have this straight:

The Academy has a 29 person board of directors.

Previously, this was:

9 Officers (President, President Elect, 6 VP, Secretary/Treasurer)
2 AAA Past Presidents
8 Special Directors from the CAS, SoA, and other actuarial associations)
10 elected directors, with 3 year terms, so 3-4 open seats per year

The Academy now claims this is:

10 Officers (President, President Elect, 6 VP, Secretary, Treasurer)
2 AAA Past Presidents
8 Special Directors from the CAS, SoA, and other actuarial associations)
9 elected directors, with 3 year terms, so 3 open seats per year

Originally Posted by Maphisto's Sidekick

When considering a blast email to MAAA's, remember that many Members are probably no more familiar with the events of the past month beyond what they might have read in the New York Times and AAA emails.

Tom might gain additional support by making the case that Tom isn't really contesting the slate of four candidates; instead he's running for a position that was inappropriately deleted without member input.

Currently, the only opposition to Tom's candidacy is the question of whether four or five directors are to be elected. So technically, it's not a "loss" if the AAA board collects more proxies than Tom.

Of course, getting proxies for Tom is still important, since it adds PR weight to the argument that the reduction in the number of elected board members is inappropriate.

Now, if the Academy adds a fifth name to the recommended slate, then it does become a true contested election. But if that happens, Tom will have won a short-term victory regardless of who holds the most proxies by virtue of having made the Board implicily agree that the change in board composition was inappropriate. The Academy having to explain the change in slate should help provide some of the foundation for making a case for the amendment to the bylaws.

Originally Posted by tbakos

I would be running for one of the 3 Regular Director positions. Just like in any contested election, the candidates with the most votes would win.

The Academy has, in the past, run elections by inviting members to vote for their slate - that is, uncontested elections. Usually, they have not even announced who the candidates were until moments before the "election". Then a quick hand or voice vote and the slate was "elected" in what was really nothing more than an appointment process - even for the Regular Director positions nominally to be elected by the members.

Even now, the Academy leadership seems to have missed the point. Their proxy is not a blank proxy inviting you to assign your voting right to whomever you choose in a process facilitated by the organization. They are asking you, effectively, to give up your voting right to the Academy Board. Plus, the only option they provide in their pre-printed form is to vote for their slate.

So, the Academy, apparently, sees this election as an "us" vs. "them" proposition - rather than as an opportunity for the Academy to facilitate the members' right to elect whomever the members believe will best serve their interests.

[JMO]

Thanks, MeToo. That's exactly what we wanted this thread to do.

[tbakos]

YES - I agree - Thanks MeToo for your comprehensive summary.

The incredible thing is that as I read through it the Academy leadership actions sounded so wierd as to be almost to hard to believe. Yet what MeToo summarized is a recitation of fact.

Have you noticed that it seems every time the Academy leadership needs to make a decision, they either don't or they make the wrong one? Maybe they should ask the members.

Keep those proxies coming - pass word to others you know - we are going to make a difference. I will be out this afternoon so may not be able to monitor this discussion. We have visitors coming plus I have to go out and get a couple of more ribbons for my fax machine.

[Fotheringay-Phipps]

I share the perspective of many about the attitudes and mindset of those running the AAA (& the SOA, FTM) and would certainly not mind someone shaking things up a bit. But what I'm concerned about is the possibility that Tom Bakos is a "stalking horse" for Bruce Schobel (to get around the agreement that the latter not run) and/or that this is an extension of the BS president-elect affair.

Not that I have anything against BS, and I might well vote for him if offered that option at some later point. But what concerns me at this particular time is the possible intention to continue the fight over the BS removal (in which Tom has been heavily involved) and settle scores with those involved, which I don't think is in the interests of the AAA at this time.

[Woodrow]

Originally Posted by Fotheringay-Phipps

But what concerns me at this particular time is the possible intention to continue the fight over the BS removal (in which Tom has been heavily involved) and settle scores with those involved, which I don't think is in the interests of the AAA at this time.

If anyone else is interested in runninfg for AAA board under a banner of open government, please please run. I'm surprised more AOers haven't crawled out of the woodworks, or that we haven't pressured some of our more senior respectable members into running.

[The Loo]

Originally Posted by Fotheringay-Phipps

I share the perspective of many about the attitudes and mindset of those running the AAA (& the SOA, FTM) and would certainly not mind someone shaking things up a bit. But what I'm concerned about is the possibility that Tom Bakos is a "stalking horse" for Bruce Schobel (to get around the agreement that the latter not run) and/or that this is an extension of the BS president-elect affair.

Not that I have anything against BS, and I might well vote for him if offered that option at some later point. But what concerns me at this particular time is the possible intention to continue the fight over the BS removal (in which Tom has been heavily involved) and settle scores with those involved, which I don't think is in the interests of the AAA at this time.

They should tear er up and start over with a new organization.

Lets git er done.