Giant Step Backwards

Cobb EMC Board of Directors Votes to Restrict Members’ Rights to Propose Bylaw Changes

Board Votes Unilaterally to Restrict Members’ Rights: This year, in a series of meetings culminating May 26, the Cobb EMC Board dramatically limited Member rights to propose and approve bylaw changes. The right of Members to propose bylaw amendments is part of the “Members’ Bill of Rights”, the leading section of the Cobb EMC bylaws. Despite the fact that the Members’ Bill of Rights requires a full Member vote for any changes to be made, the Board worked around this restriction by modifying section 10.01 of the bylaws. It is section 10.01, which is referred to in the Members’ right to propose bylaw changes, that defines the number of signatures needed for a Member to propose a bylaw change and also the percentage of votes needed to pass such a change. The Board unilaterally raised the number of signatures required to propose a change from 35 to 300, a factor of almost 10 times. This unilateral Board action makes it almost impossible for a Member to exercise their right to propose any action for Member vote without having a formal organization to assist.

Then Doubles Down to Change Voting Percentage

Furthermore, in response to a preemptive Member proposal to rescind that Board action, the Board in May raised the percentage of Member votes required to approve bylaw changes from a simple majority of over 1/2 to a 2/3 supermajority, making it much more difficult for any amendment to pass without Board backing. No bylaw amendment opposed by the Board has ever achieved a 2/3 supermajority vote.

Disturbing Effect of Board Action: The most disturbing effect of the Board’s action is that the Board can propose future bylaw changes requiring Member vote and present a very one sided case supporting their proposal. Absent garnering three hundred Member signatures, no Member will be able to present an opposing argument on the ballot for all Members to see. Cobb EMC governance is on a slippery slope when the bylaws restrict both sides of an issue from being presented to all of the voting Members.

Member Sponsored Bylaw Amendment To Restore Member Rights: Upon learning of the proposed Board action in December, Cobb EMC Forum President Mark Hackett sponsored a bylaw change which would return section 10.01 to its language prior to the unilateral Board action, reinstating the 35 signature requirement and the simple majority vote in section 10.01. Mr. Hackett’s change would also add a specific restriction to prevent the Board from changing section 10.01 in the future without a Member vote. After Mr. Hackett’s submittal, the Board acted to discourage this restoration of Member rights by retroactively raising the majority required to pass it to a 2/3 super majority.

Mr. Hackett’s proposal to restore Member rights was on the ballot for the 2016 Cobb EMC elections which were completed September 17, 2016 at the Annual Member Meeting (Click here for results). While this bylaw amendment was defeated, the “NO” votes only represented 45% of the total vote, so the unilateral Board action has still failed to receive approval by over 50% of voting Members.

Call to Action: Any change to the Members’ Bill of Rights should be presented to a Member vote with the opportunity for discussion and opposing opinions. Cobb EMC Forum urges Members to contact our Cobb EMC Board to express disapproval of the Board action that should only be approved by a majority vote of the Members. Click here to preview and send Cobb EMC Forum’s suggested email to the Cobb EMC Board of Directors, or click here to write your own.

Cobb EMC is an unregulated electric monopoly whose only oversight is provided by its Member/Owners. During recent years the Cobb EMC Board has acted to improve transparency and involve Members in oversight and governance of our Member-owned utility. However, the EMC bylaws, including its Members’ Bill of Rights, are in place to prevent a recurrence of the corruption and fiscal abuse of the previous era. Without the right to propose changes to those bylaws, Members are at the mercy of this and any future Board. The Cobb EMC Board’s unilateral action to restrict that right is a giant step backwards for Cobb EMC and its Members.

Background: All of this Board action came closely on the heels of a 2015 bylaw change that did not have Board support but was passed by Member vote anyway, a first in Cobb EMC history. That amendment extended the Members’ rights to attend Board meetings to all meetings where a quorum of the Board of Directors was present and acting on EMC business. It appears the Board wants to prevent further proposals which increase the transparency of EMC governance from ever getting in front of Members against the Board’s wishes.

Historic Parallels: The recent Board action is disturbingly reminiscent of methods used during the tenure of former indicted CEO Dwight Brown. At that time, the Cobb EMC Board acted unilaterally to change the way Director elections were held. When Members litigated to reverse that unilateral Board action, the Board responded in the Marietta Daily Journal saying, “It’s unfortunate that a small group of members have thwarted an attempt by the board of directors to open up the voting process”. In a similar vein, Cobb EMC’s 2016 survey characterizes involved Members as a small group creating a problem for EMC governance, when in fact an engaged Membership provides the only oversight on the actions of our unregulated monopoly electric cooperative.

Dubious Survey: The December 2015 Board meeting was attended by Members expressing concern about the proposed Board action. In reaction to this, the Board sent a survey to 10,000 EMC Members to create the illusion of Member support for their action. Even national presidential primary polls using the best survey techniques struggle to get an unbiased reading of public opinion. Yet the Board’s survey contains several issues that raise the question as to whether an unbiased answer was even desired:

1. The lead-in to the survey attempted to create an impression of crisis stating that “Over the past four years the procedure… has been used by the same small number of members to attempt changes to the bylaws every year”. In fact, only four Member sponsored bylaw amendments have been presented for Member vote over the last four years: three in 2013 and one in 2015. It was the bylaw change in 2015 passed against the Board’s recommendation that prompted the Board to virtually eliminate future Member sponsored bylaw changes.

2. Using the Board’s full access to all EMC Members’ contact information to send the survey to 10,000 Members, Cobb EMC was only able to get 681 responses. This demonstrates how onerous a 300 signature requirement would be for an individual Member to propose a bylaw amendment.

3. The survey language never clarified that the Members’ Bill of Rights is only supposed to be changed by a full Member vote.

4. The survey language did not remind Members that Member oversight is the only regulation over the actions of our monopoly electric cooperative. The right of Members to propose bylaw amendments is a critical element of that oversight.

5. The survey offered respondents the option of leaving the signatures at 35, or increasing the number to 425, 850, 1275, 1700 or 2000 or more, which significantly biases any results to a large number. For example, if 70% of respondents select 35 signatures with the remaining 30% evenly spread between the other choices, the survey average comes out to 400 implying that Members want the signatures dramatically increased. As Mark Twain once said, “there’s lies, damn lies, and statistics.”

In Summary: The Members’ Bill of Rights states that it can only be amended by Member vote. In their latest action, the Board, in what can be viewed as a questionable work-around, changed section 10.01 to restrict the Members’ Bill of Rights without technically changing the language in the Bill of Rights itself. In fact, one of the Board sponsored amendments passed in 2015 was already intended to prevent just such a maneuver, adding specific protective language to each section referenced in the Bill of Rights. That amendment, however, either by accident or design, left off the protection for sections 2, 6 and 10. While the Board subsequently corrected this omission for sections 2 and 6, it took advantage of the omission for section 10 to dramatically restrict Member rights which were defined there.