USATT Board Seeks Membership Comments on Proposed Bylaw Amendments

By USATT Director of Communications - Chad Knasinski | June 15, 2020, 7:19 p.m. (ET)

 

USATT’s Board of Directors is seeking membership comments on the below proposed Bylaw Amendments. We respectfully request that comments be emailed to Admin@USATT.org no later than Monday, June 22, 2020 at 5 pm US Mountain Time.

 

Proposed Amendments to Bylaws in Response to USOPC Letter of November 25, 2019

Proposed by

Tara Profitt, USATT Board and Athletes’ Advisory Council Chair

James Segrest. Jr. Ethics and Grievance Committee Athlete Representative

Frank Roth, General Counsel, Lehigh University, and Chair USATT Ethics and Grievance Committee

Sergio Garcia, General Counsel ZELTIQ Aesthetics, Inc. and USATT Board

Richard Char, General Counsel, M10 Networks and USATT Board

Bill Belitsky, Paul Hastings LLP, legal counsel to USATT

Brian P. Moran, Paul Hastings LLP, legal counsel to USATT

Stephen Hess, Sherman Howard LLC, legal counsel to USATT

 

The USA Table Tennis Association (“USATT”) received a letter dated November 25, 2019 (the “Letter”) from the United States Olympic and Paralympic Committee (“USOPC”).    While it is critical of some aspects of past USATT governance, in a positive sense the Letter provides an objective perspective of an external body and constituency to which the USATT is accountable. 

Two of the 7 “NGB Failures” cited by the USOPC (page 3 of the Letter) are noteworthy:  #4 and #6.  We have reviewed the USATT Bylaws to learn how these issues are addressed and note some omissions, ambiguities, or deviations from best practices.  The following are our observations and proposed changes to the USATT Bylaws to address these weaknesses.

 

USOPC Letter Item #4:  “The inconsistent and/or questionable handling of grievances and other disputes brought by or involving Board members.”

OBSERVATIONS

USATT Bylaws Section 9.13., entitled “Ethics and Grievance Committee,” and Article X, entitled “Complaint Procedures,” provide the substantive and procedural elements of the Ethics and Grievance Committee’s responsibilities.  The Committee’s charge is to “investigate, hear and render written decisions on matters of ethical impropriety, administrative or member grievances and disciplinary matters, right to compete matters filed with the USATT, and the standards of conduct, fair play and good sportsmanship.”

In reviewing the USATT Bylaws, and the Supplemental Hearing Procedural Rules of the Ethics and Grievance Committee, we did not find any provisions regarding the handling of grievances and disputes brought by, or involving, USATT Board members. 

This could be viewed as objective and fair; i.e., Board members are subject to the same grievance rules and procedures as all USATT members.  However, it is also the case that there are particular governance challenges involved with grievances and disputes brought by, or involving, Board members.  

The governance challenges arising with grievances and disputes brought by or involving Board members include:  (1) the Ethics and Grievance Committee is appointed by, and reports to, the Board; (2) the Board is also the body that hears appeals from any decision of an Ethics and Grievance Committee hearing panel (Bylaws Section 10.11) so it seems this potential conflict should be managed; and (3) grievances and disputes brought by or involving Board members are likely to raise high level issues of Board governance, fiduciary responsibility, conflicts of interest, and collegiality among Board members that are quite different from complaints about USATT members or member grievances. 

PROPOSED AMENDMENT

Add a new Section 10.1 (Designation of Complaints) Subsection 10.1. d. stating as follows:

d.            Complaint brought by or involving members of the Board of Directors.  In the event that a complaint or grievance is brought by or involves members of the Board of Directors in their individual capacity (i.e., not a complaint or grievance brought against the Board of Directors as USATT’s governing board under Article VII), the Board of Directors may (i) establish complaint and hearing procedures to investigate, hear, and resolve such a complaint and (ii) appoint fair and impartial hearing panel members consistent with the hearing panel eligibility standards provided in Section 9.13.b.7 of these Bylaws.  Such procedures shall be established to achieve consistency with these Bylaws, to comply with applicable legal requirements regarding corporate governance, and in order to ensure fairness and objectivity and avoidance of conflicts of interest.  With respect to any such complaint, the Board of Directors shall have the exclusive authority to investigate and address such complaint in accordance with the procedures provided in this subsection. 

 

 

USOPC Letter Item #6: “USATT’s failure to regularly employ a sufficiently robust process for the identification, disclosure, review, clearance and/or avoidance of potential conflicts of interest.”

OBSERVATIONS:

  It seems that the USATT has implemented sound improvements to its conflict of interest policies and procedures as reflected in the Board and Board Committee member “on-boarding” documents we have been asked to sign:  (a) the Acknowledgment of Receipt and Understanding of the Statement of Principles on Ethical Behavior and Conflict of Interest; and (b) the Conflict of Interest Disclosure Statement.   It appears that perhaps the USATT Bylaws have not been amended to reflect these procedures.  Bylaws amendments would document to the USOPC that there is “a sufficiently robust process for the identification, disclosure, review, clearance and/or avoidance of potential conflicts of interest.” 

Current USATT Bylaws Section 18.1., entitled “Code of Ethics,” states (emphasis added by underlining):  “USATT shall adopt a Code of Ethics and an Ethics and Conflicts of Interest Policy (the “Code”) applicable to all USATT employees, and Directors of the Board, committee members, and volunteers. Each NGB employee and volunteer shall annually certify compliance with the Code.” 

We believe these Bylaws provisions should include:  (a) a specific requirement that each member of the USATT Board of Directors shall annually certify compliance with the Code of Ethics and Conflicts of Interest Policy; and (b) a requirement that Board members have a continuing responsibility to supplement such certification by disclosing to a designated officer (e.g., the Board Chair) any conflicts that arise during the course of each year.  These requirements are stated in the Acknowledgment of Receipt and Understanding of the Statement of Principles on Ethical Behavior and the Conflict of Interest Disclosure Statement that each Board and Board Committee member must sign, but we believe they should also be stated in the Bylaws.  

Proposed amendment:

“ARTICLE XVIII CODE OF ETHICS

 

Section 18.1. Code of Ethics.

 

USATT shall adopt a Code of Ethics and an Ethics and Conflicts of Interest Policy (the “Code”) applicable to all USATT employees, and Directors of the Board, committee members, and volunteers. Each USATT Director of the Board, committee member, officer, NGB employee, task force member, and volunteer shall annually certify compliance with the Code and shall comply with Section 19.3 of these Bylaws regarding the disclosure of conflicts of interest.”

 

 

USATT Bylaws Section 19.3., entitled “Conflicts of Interest” states Board members’ responsibility to disclose conflicts of interest and recuse themselves from voting on matters in which he / she / they have a conflict.  This Section, however, seems to have ambiguities about the recusal obligation.  Section 19.3 also seems to present the evaluation and management of conflicts as though it is an adversarial proceeding before the Board.   We believe this is not best practice in the management of conflicts of interest.

USATT Bylaws Article XIX:  Current language:

“Section 19.3. Conflicts of Interest.

 

If any director of the Board, officer, committee or task force member has a financial interest in any contract or transaction involving USATT, or has an interest adverse to USATT’s business affairs, and that individual is in a position to influence a determination with regard to the contract, transaction or business affair, such individual shall: (i) disclose the conflict of interest, (ii) not participate in the evaluation of the contract, transaction or business affair and (iii) not vote on the contract, transaction or business affair.

 

Determination of a Conflict:  The Board of Directors by a majority vote may determine whether a Board Member has a Conflict of Interest in the case where two or more Board Members disagree as to whether a Board Member has a Conflict of Interest. Any Board Member shall have the right to participate in the discussion as to whether he/she has a Conflict of Interest. All discussions of Conflict of Interest shall be open to the Public unless a majority of Board members vote to conduct the conversation in Executive Session. Both the person asserting Conflict and the person accused of a Conflict, if confirmed by a majority of vote, shall have the right to take part in all discussions but neither shall have the right to vote on the matter.”


 

 

Proposed amendment:

“Section 19.3. Conflicts of Interest.

 

If any Ddirector of the Board, officer, committee or task force member has a financial interest in any contract or transaction involving USATT, or has an interest adverse to USATT’s business affairs, and that individual is in a position to influence a determination with regard to the contract, transaction or business affair, such individual shall: (i) disclose the conflict of interest, (ii) not participate in the evaluation of the contract, transaction or business affair and (iii) not vote on the contract, transaction or business affair.  Each Director of the Board, officer, committee or task force member shall submit an annual disclosure of any actual or potential conflict of interest involving him or her and USATT and each has a continuing responsibility to update such conflict of interest disclosure to the Board Chair and Chief Executive Officer promptly and completely throughout each year he or she serves in such role as circumstances arise that involve an actual or potential conflict of interest so as to ensure compliance with this Section 19.3.

 

Determination of a Conflict of Interest:  The Board of Directors has the authority and responsibility to determine, by a majority vote of disinterested Directors (i.e., those not involved in an actual or potential conflict of interest) the existence of a conflict of interest as described in this Section.  Following disclosure of an actual or potential conflict of interest as described in this Section, if the Board of Directors determines in its judgment that the matter should be brought before the Board to assess the presence or nature of the conflict and/or the appropriate means for avoidance, elimination, or management of the conflict, the individual Director, officer, or committee or task force member involved in such conflict shall recuse himself or herself and shall not participate in the Board of Directors’ discussion of the conflict, nor shall such individual use his or her personal influence, directly or indirectly in the matter, nor shall he or she be counted in determining the existence of a quorum for the purposes of any action by the Board of Directors with respect to such conflict of interest whether a Board Member has a Conflict of Interest in the case where two or more Board Members disagree as to whether a Board Member has a Conflict of Interest. Any Board Member shall have the right to participate in the discussion as to whether he/she has a Conflict of Interest. All discussions of Conflict of Interest shall be open to the Public unless a majority of Board members vote to conduct the conversation in Executive Session. Both the person asserting Conflict and the person accused of a Conflict, if confirmed by a majority of vote, shall have the right to take part in all discussions but neither shall have the right to vote on the matter.”

 

 

Finally, in reviewing the Bylaws in connection with this exercise, we considered Section 5.4 which refers to the “Full Board.”   We propose to amend the parenthetical language to clarify the meaning of “Full Board.” 

 

 

Proposed amendment:

 

Section 5.4. Suspension and Termination of Membership.

 

The membership of any member may be suspended or terminated at any time with cause by an affirmative vote of two-thirds (2/3) of the Full Board (all of the currently seated Board members) of Directors. A member shall have the right to a hearing prior to suspension and/or termination.

 We respectfully request that comments be emailed to Admin@USATT.org no later than Monday, June 22, 2020 at 5 pm US Mountain Time.