Part I: A Summary and Evaluation of the Bylaw Changes, Taken as a Whole.
These bylaw changes have three main goals: 1) to dilute the vote of the church officials on the Board of Trustees, and ensure that they are outnumbered by lay Trustees; 2) to weaken the office of Chairman of the Board of Trustees; and 3) to greatly diminish the governing power of the Board of Trustees, and, pari passu, to concentrate power in the hands of the University's president.
The changes aimed at diluting official church influence include making the Pacific Union Conference president ineligible to be chairman of the Board, changing the rules on constituent-elected Trustees so that only two can be church employees, changing the quorum rule so that a quorum is achieved only if lay members outnumber church officers, and expanding the powers of the (lay) vice-chair. These changes are clearly intended to dilute and weaken the Seventh-day Adventist Church's influence over the Board of Trustees and hence over La Sierra University.
The changes designed to weaken the office of chairman of the Board of Trustees include changing the position from an automatic ex-officio position to an elected position, providing that the chairman may be removed from office, with or without cause, by a two-thirds vote of the Trustees present, strengthening the office of vice-chair, and strengthening the power of the president relative the power of the Board Chairman. These changes are designed to make it difficult for the Chairman of the Board to exercise real authority over the Board, the University, and the president, and constitute a counter-balancing power to the president.
The changes designed to weaken the Board of Trustees include stripping the Board of the power to set policy, stripping the Board of the power to write policy manuals, stripping the Board of the power to hire and fire the vice presidents, deans, provosts, department chairs and faculty, stripping the Board of any real financial oversight, stripping the Board of the power to oversee fund raising, and stripping the Board of its power to “control all affairs and business, and to be informed of the work of the various schools, departments, committees, and programs.” All these powers that the Board currently exercises are given to the president, concentrating an extraordinary amount of power in the president's hands. The obvious intent of these bylaw changes is to prevent the Board of Trustees from exercising control over the operation of La Sierra University, and to render the Board a rubber-stamp to the president.
Part II: A Detailed Description and Analysis of the Major Proposed Changes
A. Changes to the Structure and Composition of the Board of Trustees:
Change: Section 6.2 is amended to lower the number of non-ex-officio Trustees (i.e., constituent-elected Trustees) who may be church employees from 5 to 2.
Analysis: This change ensures that lay Board members will be a majority of the Board of Trustees. Currently there are 8 church officers automatically on the Board. There are fourteen other Board members appointed by the constituents, of who five can be church employees. If all five were church employees, the church officers and employees would outnumber the lay Trustees 13 to 9 not counting the president. With this change, church officers and employees will be a maximum of 10, and can never outnumber the lay members, who will be a minimum of 12, not counting the president. This change clearly dilutes and weakens official Seventh-day Adventist Church control over the University and can only be intended to do exactly that.
Change: Currently, the president of the Pacific Union is automatically the chairman of the Board of Trustees. Section 6.5 is amended to provide that the chairman shall be elected from among the union officers serving on the Board (Vice President, Secretary, or Treasurer) Also, “neither the chair or vice-chair shall be the chair or vice-chair of any other accredited institution.” The president of the University serves as acting Board chairman until the chairman is elected.
Analysis: The president of the Pacific Union may never again be elected chair of La Sierra's Board of Trustees, assuming that Pacific Union College does not change its bylaws and hence that the president of the Pacific Union continues to serve automatically as chair of the Board of Trustees of Pacific Union College. The chairmanship is effectively taken away from the Pacific Union president and given to one of three lower union officers, to be determined by majority vote. The president of the University is acting chairman, pending the election of the chairman (which is a conflict of interest, because the Board of Trustees supervises the president). This change clearly weakens official Seventh-day Adventist church control over La Sierra University. An ex-officio chair that need not run for office, and cannot be voted out of office, is obviously in a much stronger position than one who must electioneer and seek approval of a majority of the Trustees. These changes make the chairmanship a popularity contest to be determined by a Board vote.
Change: The current section 6.6, specifying the duties and term of office of the vice-chair, is removed and replaced with an expanded section 6.5. The changes specify that the vice-chair must be elected from among those Trustees elected by the constituents; currently the vice-chair could be any member of the Board, including an ex-officio Trustee. Under the current bylaws, the vice-chair merely fills in for the chairman when he is absent, but under the proposed bylaws, the vice-chair can be tasked with “such other duties as the Board may delegate.”
Analysis: Under the proposed changes, the vice-chair may not be an ex-officio Trustee (and, under the proposed changes to § 6.2, the odds are 12 to 2 that the vice chair will be a layman, not a church officer or employee). Absent a PUC bylaw change, the president of the Pacific Union cannot serve as vice-chair of the La Sierra Board, because he will still be the chair of the PUC Board of Trustees. So the Pacific Union president is effectively shut out of the offices of both chairman and vice-chair of La Sierra's Board of Trustees. Moreover, the vice-chair's authority and responsibilities may be expanded in an open-ended manner by a vote of the Board of Trustees. This strengthens the position of vice-chair (now almost certainly a lay position) weakens the chairman (an elected union officer) and potentially weakens official church control over the Board of Trustees and hence over the University.
Change: Section 6.5 a is changed to alter the description of the chairman's duties. The chairman is to plan Board meetings “in consultation with the president.” He is to preside over the Board's self-assessment; (2) ensure that the Board is “well informed about and engaged with the university's needs and issues; and (3) “have ongoing consultation with the president” between meetings “regarding goals and directives established by the Board.”
Analysis: These changes decrease the chairman's responsibility, and increase the president's responsibility, to plan Board meetings. They seem to turn the chairman (a union official) into a sort of special confidant and assistant to the president. They also enshrine in the bylaws a navel-gazing process of Board self-assessment, which seems intended to distract from the Board's legal and fiduciary obligation to govern the University. Proposed changes to the Board's powers, discussed below, will make it difficult for the Board to be “well informed” about anything having to do with La Sierra University. The language about “the university's needs and issues” is not legal language and seems like psychobabble, as though the university were a neglected wife.
Change: Section 6.7 (new 6.6) is changed to reflect that the chairman may be removed from office, with or without cause, upon a vote of two-thirds of the Trustees present at the meeting.
Analysis: This change underscores how weak the chairman will be under the proposed bylaws changes. Under the current bylaws, the chairman is the union president, he does not have to be elected, and he cannot be removed from his position as chairman. It is a strong position, reflecting the University's strong ties to the Seventh-day Adventist Church at the level of the union conference. Under these bylaw changes, the chairman is no longer ex officio, he must be elected by the Board of Trustees, and he can be removed, with or without cause, by a two-thirds vote of the Trustees present.
B. Changes to the Powers of the Board of Trustees:
Change: Section 6.9 (proposed 6.8) is changed to add language about efficiency and transparency, and also to again mention a duty of self-assessment.
Analysis: Any lack of transparency is due to the overuse of executive sessions (closed sessions) when they are not appropriate. The second mention of a duty of self-assessment seems intended to tie up the Board of Trustees with navel-gazing, self-criticism, and self-analysis, crowding out the Board's statutory duty to control and govern the University, and its duty to provide effective oversight and supervision to the president.
Change: Sub-section 6.9a is revised to spell out a more specific oversight goal for the Board of Trustees, including to ensure that the University's mission and polices are aligned with the goals, philosophy, and objectives of the Seventh-day Adventist Church.
Analysis: This change is a very positive change, a change for the better. Unfortunately, however, the Board is stripped of the power to carry out that oversight in subsequent sub-sections of § 6.9.
Change: Where the bylaws state that “The functions of the Board shall include, but not be limited to, the following:” the phrase but not be limited to is proposed to be struck out.
Analysis: The Board's powers will thus be limited to its enumerated powers. This is a subtle but very important diminution in the Board's powers.
Change: In sub-section 6.9b, the Board is stripped of its power to “control all affairs and business, and to be informed of the work of the various schools, departments, committees, and programs.”
Analysis: How is the Board supposed to perform its duty of oversight and governance if it is not allowed to be informed of the work of the various schools, departments, committees and programs? This is obviously aimed at foreclosing any efforts by Trustees to directly inform themselves about what is being taught in the biology department, or other departments that may become controversial, such as the theology department.
Change: In sub-section 6.9c, the Board is stripped of its power to formulate, revise, and maintain official policies.
Analysis: Formulating policy should be a core concern of the Board of Trustees. This is a major step toward taking practical control of the University away from the Board of Trustees and giving it to the president.
Change: In sub-section 6.9d, the Board is stripped of its power to approve major policy handbooks.
Analysis: Again, this a remarkably bold step toward removing any meaningful control of the University from the hands of the Board of Trustees and giving it to the president.
Change: In sub-section 6.9e, the Board of Trustees is stripped of its power to remove a Trustee from the Board for cause and declare vacant the seat of any Trustees upon a two-thirds vote of the Board.
Analysis: Section 6.9e is surplusage, because § 6.7 already gives the Board the power to remove any Trustee, with or without cause, on a two-thirds vote of the Trustees present at the meeting. Section 6.7 is problematical, because it does not provide enough protection to outspoken Trustees who are a nuisance to the president. We saw this provision abused when President Wisbey had Dr. Lidner-Baum, Dr. Tooma, and Ambassador Proffitt thrown off the Board in the autumn of 2011.
Change: In sub-section 6.9b, the Board is stripped of its power to promote, discipline, reassign, or discontinue the president, the provost, the vice presidents, deans, administrative department directors, academic department chairs and faculty. The Board had the power to delegate the “appointment, promotion, demotion, or removal” all of these personnel, with the sole exception of the president, but this power is also removed. The Board is empowered to “recruit, appoint and support the president as the chief executive officer charged with the leadership of the institution: to evaluate the effectiveness of the president: and to make changes in the office of the president in harmony with the goals, philosophy, and objectives of the University.”
Analysis: The Board is stripped of the power to fire anyone other than the president (which power is explicitly granted to the Board in § 7.1). Stripping the Board of its powers to fire vice presidents and deans is a substantial step toward emasculation and neutering of the Board of Trustees.
Change: In sub-section 6.9c, the Board is empowered to charge “the president with the task of leading a strategic planning process, participate in that process, approve the strategic plan, and monitor its progress.”
Analysis: The president, not the Board of Trustees, leads the strategic planing process. It appears from the language (although it is vague) that the Board is allowed to “participate in that progress,” “monitor” that progress, and possibly approve the final plan. Strategic planning should be a Board prerogative. That these bylaw changes make it a presidential prerogative show how radically these changes would empower the president and dis-empower the Board of Trustees.
Change: In sub-section 6.9m, the Board is stripped of the power to review the articles of incorporation and the bylaws, and to recommend changes to them.
Analysis: Apparently this is the last time the Board of Trustees will ever have to vote to recommend changes to the bylaws, because its power to review them and recommend changes is stripped by this bylaw change. If the Board finds that these bylaw changes render it unable to perform its statutory duty of oversight and governance (as it certainly will) it has no power to recommend changes that would restore some reasonable power to the Board.
The annotation says that bylaw changes are governed by the bylaw committee, which is established in § 5.7, but that committee is a sub-committee of the Board of Trustees, and makes recommendations for action by the full Board. Stripping the full Board of the power to recommend bylaw changes leaves the sub-committee without any lawful purpose, and effectively dissolves it.
Change: In sub-section 6.9(l), the Board is stripped of its power to approve salary scales and compensation packages, to receive the annual report of the auditor, and to approve the annual audited financial statements. The Board is empowered to approve major capital expenditures.
Analysis: This change strips the Board of Trustees of financial oversight of the University, with the exception of major capital expenditures. This is a substantial diminution of the Board's power and ability to govern the University. Under article 8, the Board of Trustees will still have the power to receive the annual report of the auditor, but without the powers enumerated under § 6.9l, it isn't clear that the Board will be able to do anything with the auditor's report other than “receive” it.
The annotation says that salaries and compensation are covered in the approval of the budget, but the power to approve or reject a budget does not necessarily entail the power to set salary scales and compensation packages, so the annotation is misleading.
Change: In sub-sections 6.9s and t, the Board is stripped of the power (or obligation) to cultivate, facilitate, and personally support the fund raising efforts of the University, and to approve and provide finances, including voluntary support for the long range development of the University.
Analysis: This provision strips the Board of an important aspect of financial oversight, namely, the power to oversee and regulate fund raising efforts. The secularizing bond covenants are a perfect illustration of why the Board of Trustees needs to continue to be involved with oversight of fund raising. Secularizing the University's physical plant with inappropriate financing does not serve the long term mission of the Seventh-day Adventist Church. Raising funds by naming things after the donor is another area that needs careful Board oversight, as per the recent naming of a “Center for Financial Literacy and Entrepreneurship” after a notorious abortionist.
Change: In sub-section 6.9o, the Board is given the power “to engage regularly, in concert with the president, with the University's major constituencies.”
Analysis: It is not clear what this means. The University's constituencies are the Pacific Union Conference and the larger Seventh-day Adventist Church, but it is not clear how the Board is supposed to “engage” these groups. This seems to be an effort to reverse the role of the Board of Trustees from ensuring that the University furthers the mission of the SDA Church to forcing the Board to plead the University's case to the larger SDA Church. This is backward. The Board should ensure that the University serves the Church, not that the Church serves the University.
Change: In sub-section 6.9p, the Board is empowered “to adopt a Board policy manual providing effective policies to guide the Board and its committees, as well as Board relationships with University staff, and to facilitate assignment of responsibilities among them.”
Analysis: The implication here is that the Trustees need a manual to tell them how to exercise oversight and governance of the University. If this is true, new Trustees are necessary, not a manual. The bylaws themselves are a sufficient manual to the Board of Trustees. Again, the purpose of the Board of Trustees is to govern the University, not vice versa.
C. Changes to the Power of the President, and Miscellaneous Changes
Change: In section 6.15, regarding quorums, language has been added to ensure that, in order to have a quorum legally necessary to conduct business, a majority of Trustees present must be elected Trustees, as opposed to ex-officio Trustees.
Analysis: In essence, this means that the Board of Trustees can never conduct business unless lay members outnumber church officers. Obviously, this change substantially weakens the Seventh-day Adventist Church's control over the University. This change can have no other conceivable purpose.
Change: Section 7.1 is changed to indicate that the secretary, chief financial officer and vice presidents are no longer to be appointed by the Board of Trustees.
Analysis: The Board now has real power to hire and fire only the president. All other positions are appointed by the president, and only he has authority to fire them.
Change: In section 7.2, the president's title is changed from chief administrative officer to Chief Executive Officer.
Analysis: This would be inappropriate under the current bylaws, but under the changed bylaws it fits. These changes really do give the University president the kind of broad ranging power that a corporate CEO has, if not more.
Change: Sections 7.2 a and b are amended to relieve the president of his obligation to present a comprehensive annual report including a financial report. He is instead required to give “regular” reports, whatever that means. The president is empowered to “appoint promote, direct, discipline, reassign. and discontinue the provost, vice presidents, deans, administrative department directors, academic department chairs, and faculty members, in accordance with established university policies and procedures.”
Analysis: Here the president is formally given powers that were previously given to the Board of Trustees. This change represents a substantial concentration of power in the hands of the president, and an equal diminution in the power of the Board of Trustees.
Change: Section 7.2h is amended so that the president can “exercise such additional powers as are assigned by the Board of Trustees.”
Analysis: This is potentially an open-ended grant of power to a position that already wields enormous specified power.