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MidContinent Blogs #4 – Member Rights and Responsibilities
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Author:  byronlong [ Fri Aug 06, 2010 11:34 am ]
Post subject:  MidContinent Blogs #4 – Member Rights and Responsibilities

The railroad industry in the United States has a fantastic and rich history. This history is not focused only on the railroad companies that laid their rails across this vast land but the employees who made these companies what they were and what they are today. Beyond these accomplishments, there is romanticism about the struggles, trials, tribulations, and thrills associated with the industry. I believe these are the reasons there are so many of us who care about this industry and its history with their hearts, hands, and wallets. And we have built, collected, restored, and ridden to our hearts content. There are books listing all the railroad museums and tourist railroads in North America and beyond. These can range from Strasburg Railroad and Durango & Silverton Railroad to the B&O Museum and Steamtown to the depot that serves as the Chamber of Commerce office to the stand-alone caboose. Some are privately owned but many are incorporated organizations that are either for-profit or not-for-profit or even government-owned. These can be stock or non-stock corporations, these can have members or not have members, and those with members can have voting members or non-voting members.

This contribution will attempt to address only not-for-profit corporations and only those with voting members, which is where I have the most exposure. However, I will start by saying a little about non-voting member, not-for-profit corporations. And I will show my bias here. These generally have boards that self appoint, so they can blame no one but themselves for lack of success. The strength of such organizations is that they are not subject to popularity contests and do not run the risk of serving their members more than the public. Enough said.

Organizations that have voting members must rely on the competence of their members for the success of the organization. This is because voting members usually elect the board and sometimes the officers. And in order to be competent voting members, the members must have rights and responsibilities and know these rights and responsibilities and exercise them. The biggest problem with having voting members is that there is a tendency for the members to become more of a club for the benefit of the members rather than an organization dedicated to serving the public. The other biggest problem is that leaders can bring their own personal agendas to the organization and corrupt it.

My primary experience with voting-member, not-for-profit organizations has been by becoming a member of Mid-Continent Railway Historical Society in 1974, which was eleven years after starting their museum in North Freedom, Wisconsin. I joined because this organization was dedicated to acquisition of selected and focused collections, construction of a shortline railroad environment, building a museum dedicated to accurate restoration and presentation, and operating a steam train of the 1900-1915 period. However, today I see a tourist railroad powered by diesel switch engines and wooden cars stored outside exposed to the elements for years, but more about this next week. What happened, you may ask? Perhaps, the members cared more about playing trains rather than watching over the shop and perhaps the members did not know their rights and responsibilities.

The first right that comes to mind is the right to communicate between members and this is especially important when it comes to voting membership. I will use Mid-Continent as an example. Mid-Continent has the (supposed to be) quarterly Railway Gazette, the quarterly Steamer, and Manager’s blogs. There are also the annual members meeting and any other members meetings described in the bylaws. It used to be that the Gazette had a place for comments from members but not any more. In fact, all of these vehicles of communication appear to me and others to be strictly one-directional and appear to be a propaganda tool more than anything else.

Another source of communication between members is the membership roster and its contact information. As Mr. MacDowell pointed out in his response to my “Introduction” topic, Wisconsin has a very liberal set of statutes when it comes to non-stock corporations and these can be accessed on the web. Subsection 181.0720 gives members the right to inspect the membership roster at every members meeting. And subsections 181.1602, 181.1603, 181.1604, and 181.1605 give the member the right to inspect and copy any records of the corporation specified in subsection 181.1601 (1602), right to the use of an agent or attorney to inspect and obtain copies (1603), right to obtain a court-ordered inspection (1604), and limitations to these rights (1605). The professional organizations to which I belonged all either published a booklet with this information for member use or made it available on their website exclusively for members. These specifications allow voting members the rights to police their own organization. Anyone who may wish not to have their contact information made available may wish to think about not becoming a member because this right is that important. I was denied these rights by Mid-Continent leaders.

Other rights provided in the statutes include the right to annual financial statements (181.1620) upon written demand and include an annual report by a certified public accountant if applicable. Mid-Continent bylaws also provide that “board meeting minutes shall be disseminated to the voting members of the corporation.” (Section 4.13). However, the minutes are not being disseminated and I know of one Mid-Continent Life Member who requested the minutes and the manager refused that request. The leaders seem to have the view that the minutes are confidential and this view is wrong.

Although these are not rights per se, anyone can access the charter or articles of incorporation and form 990 filings of any corporation from the appropriate state department and from the IRS or GuideStar.org because they are public documents.

Voting members have a responsibility to assure that their organization is adhering to its public promises and values and its leaders are driving the organization in a responsible manner. Each member can do this by reading the publications from the organization to determine if they are telling a true story about activities. Each member should know the published purpose, bylaws, mission statement, and strategic business plan and determine if the leaders are following these public documents. Each member should attend meetings and not be afraid to ask pointed questions. It is important at these meetings to see if the agenda has been composed to help or hinder the members in asking questions. And each member should demand the membership roster, strategic business plan, annual financial report, form 990, and other documents from their leaders. When there are concerns, each should rally around a common cause to bring about change, much as certain Mid-Continent members are doing this summer with their bylaws.

Any organization that holds back any of this information does not know the meaning of transparency and may have something to hide. Furthermore, they may be hiding fraud or other forms of dishonesty. A failure to be involved in how your organization is being run may ultimately result in the failure of the organization and worse yet, the loss of some of our valued historic railroad treasures that we have fiduciary responsibility or custodianship over. Then we all lose.

My contribution next week will address the question: what is Mid-Continent anyway?

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