RIMS NATIONAL UNDERTAKES REORGANIZATION
By
Theresa E. Baus
RIMS Director
New York Chapter
As you may be aware, the Governance Task Force on Organizational Structure was established over a year ago, at the October 1998 Board of Directors Meeting in New York City. The Task Force was formed to review certain fundamental legal problems imposed by the current organizational structure of RIMS, to present its findings to the Board at the April 1999 Board Meeting in Dallas, TX, and ultimately, to recommend a practical solution to the problem. The legal problems and brief discussion are outlined below:
- Obtaining a Quorum at meetings. This has been an ongoing problem and RIMS Constitution and Bylaws had always contained a provision to allow a RIMS Director (formerly Society Director) to vote by proxy when unable to attend a Board Meeting. When RIMS Constitution and Bylaws were undergoing amendment in 1997, it was discovered that under Illinois law, the jurisdiction in which RIMS is incorporated, it is illegal for a not-for-profit organization to allow proxy voting by its directors. RIMS Bylaws were amended to correct this, thereby making obtaining a quorum that much more of an obstacle.
- The Duty of Loyalty. The duty of loyalty is a fundamental obligation of a director to an organization. Therefore, a Director of RIMS owes that duty of loyalty to the Society and not to the Chapter. A duty of loyalty is imposed by law and liability may be imposed upon a director who breaches that duty. This is contrary to the common perceptions of both RIMS Directors and the Chapters, who have long operated under the assumption that the Director represents the interest of the Chapter.
- Election of Directors. A recent review of the Illinois statute uncovered that, under Illinois law, Directors must be elected at one time and sit for either a one-year or a staggered three-year term. At this time, each Chapter elects a Director at a convenient time for that Chapter and often for varying terms.
- Duties of Directors. Under RIMS Constitution and Bylaws, the duties of a Director include, reporting on RIMS directions and activities at the local chapter level. The directions and activities of RIMS are established at an Annual Planning Meeting early in each calendar year. This meeting, which takes place over several days, is attended by the Executive Council and RIMS Staff, along with Committee Chairs and Vice Chairs, for a total of approximately 50 people. It would be neither practical nor cost effective to involve an additional 90 Directors in this process, especially given the fact that sufficient attendance by Directors at Board Meetings is already a major concern.
The Task Force returned with their findings and recommendations and presented these at the April 1999 Board of Directors Meeting in Dallas, TX.
FINDINGS
The Task Force's research confirmed that the majority of not-for-profit boards consist of between 11 and 20 members and that, in fact, only a small percentage of those surveyed indicated having a Board of Directors with more than 20 members. RIMS Board of Directors, which consists of 90 members, is an anomaly, and appears to be structured unlike any other organization that was the subject of the Task Force's research. The Task Force set out to identify and reconcile the needs of the Chapters with that of the Society prior to making recommendations. The needs, briefly stated, include the continuation of Chapter representation in the governance of the Society; maintaining RIMS as a membership driven organization; maintaining the Chapters' degree of control over the Executive Council; and striving for ongoing information and feedback between the Society and the Chapters.
RECOMMENDATIONS
At the April 1999 Board of Directors Meeting in Dallas, TX, the Task Force presented their recommendations, designed to reconcile the legal problems with the needs of the Chapters and the Society. The recommended reorganization, to be implemented through revisions to the RIMS Constitution and Bylaws were as follows:
- Creation of a new, smaller Board of Directors comprised on 17 members, i.e., 2 from each of 5 prescribed regions; 5 members at large; current RIMS President and First Vice President
- The formation of a House of Delegates (former Board of Directors) comprised of 1 delegate from each Chapter
- A division of duties among the House of Delegates, Board of Directors and Executive Council designed to provide the appropriate checks and balances on any one tier of governance authority.
IMPLEMENTATION
These recommendations and proposed changes were the subject of a lively Town Hall Meeting prior to the official vote at the Board of Directors Meeting in New York City on October 18, 1999. Not all Chapters were in agreement with the proposed changes. The resistance was led by the Massachusetts and New York Chapters, in the hope that an alternative, less cumbersome proposal be given consideration.
However, it became clear that the majority of Directors wished to proceed to a vote at the Board of Directors Meeting, requiring 2/3 of the entire Board (61 affirmative votes) in order to pass. Several Directors teleconferenced and the results were 61 in favor, 6 opposed and 3 abstentions. The changes are effective immediately, and we will be hearing more from the Executive Council and the Nominating Committee regarding their implementation.
In conclusion, there is no doubt that change was necessary to appropriately position RIMS, both legally and for the future, as a viable organization. These changes are a positive first step in the right direction. I suspect, however, that these are only the first of several Constitution and Bylaws changes that will be taken under consideration. I would like to thank the Governance Task Force on Organizational Structure for their diligent efforts and patience throughout this process. I will provide updates in future editions of RIMSLINE for the benefit of New York Chapter's members and friends. |
Members Corner
Joe Rinaldi, Immediate Past President of the New York Chapter, has brought to the attention of the Committee on Elementary, Middle, Secondary & Continuing Education of the University of the State of New York a proposal to consider a formal insurance education curriculum in the secondary school system. We decided to ask Joe a few pointed questions on how he sees this curriculum becoming a reality.
What brought you to the conclusion that providing an insurance curriculum would be beneficial to our high school seniors?
My decision was made for purely practical reasons; i.e., at some point in their adult lives our students will need to purchase insurance such as auto, life, medical or homeowners/apartment insurance.Without formal insurance education the average citizen knows very little of what to buy and how to buy it. Agents or brokers are not necessarily charged with the responsibility to educate the insured on how to evaluate and measure his/her risk so that he/she can purchase the correct insurance.
Who do you see bringing this information into the classroom? Insurance professionals or teachers?
I see the instruction process as a flexible thing& ..The insurance community can train specific high school teachers in the concepts so they can in-turn teach the students, or we can employ the services of professional insurance people to act as visiting instructors and teach one course per week for the senior students in their area. Depending upon the number of schools in the locale, the logistics would have to be worked out carefully with the school systems.
What insurance topics do you envision being taught?
Basic insurance and loss prevention topics such as:
basic concepts of insurance/transfer of risk, theory of proximate cause, basic fire perils, how exclusions work, coinsurance clause, deductible concepts, proof of loss concepts, theories of tort law, liability insurance coverage theories, subrogation, loss prevention & control measures.
For further information refer to the November 29 issue of National Underwriter.
RIMS Member Poll
RIMS is considering Honolulu, Hawaii as a potential location for the Annual Conference in 2005. An impressive presentation was given by representatives of the Hawaii Chapter at the recent Board of Directors Meeting in New York City. The presentation depicted a new, state-of-the-art Convention Center and an abundance of hotel rooms. The safety and beauty of the city was also stressed, as was the fact that reasonable air fares can be found.
The New York Chapter would like to know what our members think. Is Hawaii a realistic venue for you? Can your budget handle it? Can you afford the time commitment? Would it be approved by management?
I would like to hear from you and make your thoughts known to RIMS. Please email me at tebomc@aol.com.
Thank you
Theresa E. Baus
RIMS Director
NY Chapter
CHAPTER BULLETIN BOARD IMPORTANT!!
The Chapter is seeking individuals to fill vacancies on the board of directors. Please join us in 2000, which promises to be an exciting year for our Chapter.
For more information, please contact one of our board members listed on the 2000 Board page of this web site.
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