NCBA governance change proposal receives mandate

Feb 5, 2010

On the final day of the successful National Cattlemen’s Beef Association (NCBA) annual conference held in San Antonio, TX, the NCBA Board of Directors approved a recommendation for reshaping the governing structure of the organization by a wide margin. In a 201-13 decision in favor of the change, members of the board voted resoundingly for the restructuring, which has lately caused some skepticism among State Beef Council Federation (Federation) members and producers. Any doubts notwithstanding, the broad approval signals the success of the NCBA Governance Task Force in getting board of director members from both the Federation and state affiliate organization on board with the basic concept of the restructuring proposal. Details of the plan remain to be hammered out, and a vote will be held on a finalized version of the proposal at the summer NCBA meeting in Denver, CO.

The proposed restructuring was initiated in order to make NCBA’s decision-making process quicker, more maneuverable and responsive to the many challenges facing the industry while preserving grassroots input at the core of the governing process. The most significant change is the creation of a 250-seat House of Delegates composed of 106 representatives from state beef councils, 106 representatives from state producer organizations and 38 representatives from industry and breed organizations and allied industries. The House of Delegates will have a similar composition to the current 274-member Board of Directors. However, in the proposed structure, the House of Delegates will not make final policy decisions, but instead will recommend policy to a 29-member Board of Directors for final decision making. The Board of Directors will be composed of 21 elected members chosen by the House of Delegates, five elected officers, including the president and vice president of NCBA, and three non-voting ex officio members: the State Beef Councils chair and vice-chair, and the CEO of NCBA. The elected members of the Board of Directors will be nominated from the House of Delegates.

The intent of concentrating final voting power in a smaller Board of Directors is to establish accountability and to make legal and fiduciary responsibility more manageable, in addition to allowing for quick action in demanding circumstances.

According to John Queen, task force co-chair and a beef producer from North Carolina, the group was careful to develop recommendations that kept in mind NCBA’s quest for an industry with one vision, one plan and one voice. It determined that the current structure that includes a 274-member Board of Directors is unwieldy and makes authority and accountability within the organization more difficult.

"This is an important step in making our industry more responsive to the challenges it faces," said Jan Lyons, Kansas beef producer and co-chair of the Governance Task Force. "There are entities across the country seeking to keep us from succeeding as cattlemen and women. The changes we have recommended make it easier for us to move quickly against those groups and assure that consumers know the facts about the great beef we produce and the people that produce it."

According to the proposal, and in a nod to the grassroots basis of the organization, the House of Delegates will not only elect the Board of Directors from their own ranks, but will also have power of removal should a board member prove unsuitable. Furthermore, in an important last minute change, which was key in gaining the support of some hold-out skeptics, the House of Delegates will be given sole authority to write the bylaws for the organization.

Several important changes will result from the proposed reshaping of governance structure. The first, and most obvious, is that the House of Delegates will not have final voting authority, but will recommend policy to the board for final approval. The second is an opening up of the voting process in the House of Delegates. Whereas previously, only Federation members voted on Federation issues, and state affiliate members voted on a separate set of issues, the new voting structure allows all House members to vote on all issues, thereby ending the long-standing division in the voting body. According to Governance Task Force member and Washington State Beef Commission Executive Director Patti Brumbach, the integration of Federation and affiliate voting is hoped to foster a more unified, co-operative culture within the organization, and further, makes good sense given the interconnectedness of issues now affecting the beef industry.

Another change in structure pertains to representation. As with the current 274-seat Board of Directors, an individual state’s degree of representation within the proposed House of Delegates will be based upon the financial contribution made by that state in mandatory checkoff dollars, discretionary contributions, and NCBA dues. However, in the new structure, the number of seats in the House of Delegates will remain fixed at 250. Differences is states’ contributions will be registered not by the number of seats a state is allocated as before, but by weighted votes.

The process of developing the new structure has been in the works since the summer of 2008 when the Task Force first convened. The 21-member Task Force included producer members, state organization staff and Federation members.

"Over the period of 18 months, we visited with producers and worked hard to come up with a system that would maximize the capabilities of our organization," Lyons said. "We think this new structure will make us as strong as possible as we face the many adversities that face us today."

Despite the strong endorsement given the proposal by the board’s vote, the restructuring plan has not escaped criticism from either Federation and affiliate quarters. Alisa Ogden, immediate past president of the New Mexico Cattlegrower’s Association, said that New Mexico board members came to the San Antonio conference prepared to vote against the proposal, but were ultimately swayed in favor by several last-minute changes.

Ogden explained, "One of our main concerns in New Mexico was that there was no oversight over the board of directors; they had almost total control. So one of the changes [was] that the bylaws would be coming out of, and voted on, by the House of Delegates. That way, you would have 250 people voting on your bylaw changes versus 26. That was a change ... that we thought was extremely important."

"Another change that was made was to increase the size of the representation of the policy division and the Federation division in the House of Delegates, and reduce the size of different affiliates," such as breed organizations and allied industry representatives. Said Ogden, "They had initially had policy having 100 seats and Federation having 100 seats, and then your other affiliates ... would have 50 seats. They reduced that number from 50 to 38 and gave the policy and Federation sides each six more seats."

"Before these changes were made, we were not going to vote [in favor of] it. But they made the changes on Friday night before we voted on it Saturday."

Another concern earlier on was that the more integrated structure would violate the firewalls set up to ensure that checkoff dollars are spent on appropriate projects, such as research and marketing, and not on lobbying or membership. These doubts, however, have been largely assuaged.

Says Queen, "NCBA has always sought to conduct our affairs the right way, utilizing checkoff dollars only for those programs for which they were intended. Our recommendation is legal and maintains the strict firewalls required by law for checkoff and non-checkoff dollars."

Queen emphasizes that the recommendations comply with the Checkoff Act and Order. Legal counsel and the U.S. Department of Agriculture were consulted throughout the proposal-writing process.

The vote at San Antonio only represents approval of the basic concept of the restructuring. Between now and the summer NCBA conference in Denver, the approved skeletal plan will have to be fleshed out in its details. Working groups will be established to take the structure concept and further developing bylaws, investment schedules and a transition timeline. Bylaw changes will be considered by the board at the summer conference in Denver this July. If bylaws are approved at that meeting, implementation of the structure will begin. — Andy Rieber, WLJ Correspondent