An Open Letter

The latest issue of Tournaments Illuminated includes a long "question and answer" session on the Board of Directors' recent actions, with both questions and answers provided by the Board. In justifying the actions of the January meeting, it asserts that "the Board had to take its action swiftly because to do otherwise would have violated the directors' specific obligations to the Corporation" and later that "the Board was not acting "under normal circumstances" in meeting the challenges of balancing the budget, ... ." It seems clear that they are justifying their actions, in particular the failure to consult with the membership before implementing important and unpopular policies, as a response to an emergency that required prompt action.

It is interesting to compare these statements with those of the letter sent by the Board of Directors to the entire membership shortly after the January meeting--the letter which, according to the preamble to the recent statement, is being "misrepresented or misunderstood." That letter provided extensive, although in my view unconvincing, arguments in favor of the desirability of required membership and higher spending, but it said nothing about any emergency. Indeed, the financial attachment to that letter (reproduced in the current T.I.) begins "Over the course of the last two to three years, the SCA Board of Directors recognized ..." and goes on to describe the (expensive) policies adopted because of that recognition.

The Board cannot have it both ways. Either the January decisions were the result of deliberate policy, in which case they ought to have been discussed in advance with the membership, or they were the response to a sudden emergency. Either the Board letter misrepresented panic as policy or the current T.I. misrepresents policy as panic. In either case, the problem is not that the membership has "misrepresented or misunderstood" the Board but that the Board, past or present, has attempted to mislead the membership--or, more charitably, has provided inconsistent accounts of what it is doing and why.

The puzzle deepens if we add some facts omitted from the Board's statement. The 1993 budget, according to figures recently released by the Executive Director, showed an accounting profit of $17,580 and a cash flow surplus ("Net increase in cash & cash equiv.") of $39,310. At the end of 1993, liquid assets ("Cash and cash equivalents") were $218,487. The last Board meeting of 1993 mentioned no impending financial crisis. Between that meeting and the first meeting of 1994 there were no large unexpected expenses--at least, the Board has claimed none, and Board members are reported to have denied that there were any.

So we have a Corporation that was running a surplus in 1993, had no surprise expenses, and yet started 1994 with a budget so badly out of balance that a 40% price increase was considered insufficient to keep it in the black. That sounds like a situation requiring an explanation--but none is suggested. The Board's discussion simply slides past the puzzle of the sudden appearance, in a space of three months, of a budgetary shortage of several hundred thousand dollars.

I can think of three plausible explanations. One is that, over a period of several years, the Board decided to do several expensive things, such as hiring a full time executive director and buying new computers, as part of a long term policy of "professionalizing" the Corporation. In January of 1994, it suddenly ocurred to them that all these things would have to be paid for. If that is what happened, the emergency was real, but its cause was incompetence or irresponsibility by members of the Board of Directors, present and recent past.

A second explanation assumes the same facts but a different motive. The Board wished to make two changes, the price increase and required membership, which it knew would be unpopular with the membership. It therefore deliberately left paying for its new policies to the last minute, so that it could use the excuse of an emergency to justify implementing them without either public discussion or any attempt to determine the wishes of the members. The clearest evidence in favor of that explanation is that the most unpopular policy adopted, required membership, is one poorly suited to solve budget problems, since new members bring expenses as well as revenue. It is, however, the final step in a gradual increase in membership requirements which the Board has supported, for non-budgetary reasons, over the past twelve years. If that is what happened, the Board appears to have succeeded--aside from a change in form (from required membership to a steep surcharge on non-members), they got what they wanted.

The third explanation is that the Board was persuaded, through error or deception, of a non-existent crisis. They were told that they had only a few hours in which to decide what to do, and the survival of the Corporation was at stake. Judging by what has been said and done since, the form of the threat might have involved arguments about legal liability--that is a convenient way of conjuring up large potential costs without having to provide any evidence. While it might be a good argument for change, it is a bad argument for haste. U.S. tort law has not changed significantly in recent years and we have survived and prospered so far, so it seems unlikely that we are doing something so badly wrong that we have to change it instantly. On the other hand, bad legal arguments for something you want to do are a good reason for haste--in order to get the decision made before attornies in the membership get a chance to answer the arguments.

I do not have any grounds for choosing among these explanations--but they are the only plausible ones I can think of. All are, to various degrees, discreditable to the Board of Directors, which may be why none was offered. If there is another and creditable explanation, they should provide it.

Further Details

While the most serious problem with the Board's explanation is the failure to explain the existence of the financial emergency which is supposed to justify their actions, it is not the only one. Here are some more:

In explaining why changing the bylaws to permit required membership without prior notice to the membership was not in violation of Corpora, the Board tries to argue that, because Corpora deals with the medieval side of the Society and the Bylaws deal with issues of membership, "the issues are plainly not medieval issues."

But what Corpora IIIB in fact says on this subject is " ... the Board will publicize proposed changes to the Society's governing documents in sufficient time to allow comment from the membership before making a final determination. However, changes to the By-Laws affecting only the external operations of the corporation will be published after they are put into effect, ... ." That makes it clear both that Corpora states policy with regard to the bylaws and that the distinction is not between "medieval" and "mundane" but between internal and external operations. Forbidding a majority of the present participants in the Society to come to events certainly affects the internal operations of the Corporation.

The explanation offered for why the Board decided to stop publishing the minutes is both puzzling and deceptive. It is puzzling because it does not explain why they did not simply continue the present minutes under a different title, designed to make it clear that they were not "the official record" of the Corporation--that would have been a lot less trouble than notifying all of the subscribers that their subscription had just been cancelled.

What is deceptive is the sentence "Instead of distributing copies of the minutes, which will now be greatly abbreviated, a longer narrative report will be published in Tournaments Illuminated." This makes it sound as though what will be published will be longer than what we used to get, providing us more information. But that is impossible--it would take up a substantial fraction of every T.I. What the sentence actually means is that what will be published in T.I. will be longer than the "greatly abbreviated" official minutes--but much shorter than what used to be available by subscription. So the effect of the change is simultaneously to reduce the amount of information available to those who are interested and to guarantee that every subscribing member will get a brief account from the Board of what it is doing and why. How balanced that account is likely to be we may judge from the Board letter and the Spring 1994 T.I.

Finally, it is worth noting that the Board, during a financial emergency, spends four pages of T.I. reprinting the same financial information already mailed, at a cost of about fifteen thousand dollars, to the entire membership. The information is as misleading now as it was then. Although two pages are used to convey numbers (with pie charts and large print) that would easily fit in half a page, no comparison figures for previous years are provided.

That is hardly surprising--if they had included the figures, it would have been obvious that the description provided is designed to obscure the financial facts. Corporate office expenses, for example, "will experience significant increases in 1994." The actual increase, comparing the recently released actual figures for 1993 with the 1994 budget, is 58%, from $263,413 to $416,011. Board expenses "have continued to rise with the increases in membership and responsibilities." The actual increase is 53% over 1993, and 115% over 1992.

The financial report ends with the statement that "The SCA does not maintain large reserves and although it is our goal to build reserves of at least 50% of operating expenses, the Board decided that, at leat for 1994, no significant amounts would be added to our existing meager reserves." At the end of 1993, according to the financial information provided by the Executive Director, our "meager reserves" were liquid assets of 33% (total assets of 48%) of annual expenditure.

The Board offers a lot of self-serving statements, such as "We desire only to do our very best to honorably serve the Society"--which they probably believe. It is past time for them to make their actions consistent with their words. This is not a hopeful start. They have spent seven valuable pages of T.I. defending themselves and blaming other people for the consequence of their or their predecessors' misleading statements. They have offered no explanation for the financial emergency that is supposed to justify their actions. They have omitted any mention of facts unfavorable to them, such as the financial information for previous years or the result of the 1992 request for comment on required membership. It is a one sided and dishonest presentation, designed not to inform but to persuade--by omission, misinformation, and indirection.

David Friedman

Duke Cariadoc of the Bow