Its amazing how little we know about the decision process that the NHRA employs in the process of running the company, and decisions like going in the email marketing business can come flying out of the blue.
In the post below, I reviewed the business structure of the NHRA and how they pretty much hijacked what was originally an organization that was designed to be controlled by its members by voting process and built themselves a "legal moat" to protect their job security:
http://www.nitromater.com/nhra/30232-nhra-sacks-museum-director.html
But there are some other important things to understand that I didn't cover in that post and I'll review them here.
In a publicly held organization (ie public stock shares) there are requirements to keep share holders very informed about both the conduct of the company and its financial status and prospects. In addition to an annual report that details the operation, transactions and financial status of the company there are also quarterly reports to update shareholders also.
In addition there is an annual shareholders meeting where the annual report is reviewed and shareholders can make comments and ask questions.
Shareholders can also request access to the Bylaws of the corporation. Bylaws are the required detailed rules on how the company is to be run, covering how board members are to be elected or replaced and the rights of the shareholders. Bylaws can be changed over time so its important to be able to access the most recent version of them.
In summary, in a public company you can fully understand how the company is being run, what rules it must conform to, what its goals are, what directions it will be taking and what kind of shape it is in financially.
The NHRA is a non-profit company with no shareholders but it was originally setup so that its members functioned as shareholders, for example having control by vote of the board members. In addition there were to be annual meetings both for the purpose of electing board members and to inform the members on the direction of the company and to allow questions.
The company also has Bylaws that were to be available for inspection by its members.
As I described in the previous post, the NHRA board has done an impressive job in building a "legal moat" that insures that they alone determine their own job status and salaries.
But in addition to the legal moat they have also done an impressive job in setting up a "cloak of secrecy" around the company. To my best understanding there are no annual or quarterly reports that can be accessed by the members and there is no annual meeting where these reports are reviewed and where members can ask questions.
The company is required to have a set of Bylaws, but in language I have seen in some of the bylaw modifications they are now claiming that the NHRA actually has no members in the "original sense" that was used to describe the members when the company was formed. Thus they are now stating that they no longer have to provide access to the company Bylaws to current NHRA members.
They have thus constructed an amazingly effective "cloak of secrecy" around the company, a perfect combo to their "legal moat".
Without being able to see the Bylaws we have no idea what rules the company must adhere to in the operation of the company on important issues such as hiring and retaining board members.
Without seeing annual and quarterly reports we have no idea what the financial status of the company is and what direction they intend to take with the business.
This is not the way that a non-profit business league with significant membership is intended to be operated. It is expected that in a non-profit business league that its members ultimately control the direction of the company and also have full access to the financial status and plans of the company.
Here's a significant example of a non-profit business league that is run as is typically intended for this kind of business entity.
The NFL League (the league itself, not the individual teams) is also a non-profit business league. It has a much smaller membership, the members are all the individual team owners, in a similar way to the NHRA race team owners, although the NHRA has a lot more team owners.
As is supposed to be the case, these team owners ultimate control the NFL by electing its Commissioner. If they don't like they way the league is going they can have him replaced, as has been done in the past.
The NFL, as expected, regularly issues quarterly and annual reports so there are no surprises to its members in the financial status and direction of the company.
The NFL not only makes its Bylaws available to its members, they're available to anyone that wants to take a look at them.
This is good practice for any non-profit company, you don't want the public to suspect that anything funny might be going on in a non-profit company.
Here's the NFL Bylaws, in them they describe how the owner's elect the Commissioner:
http://static.nfl.com/static/content//public/static/html/careers/pdf/co_.pdf
In total contrast, the NHRA has done a great snow job in keeping its members totally in the dark in what kind of the company the NHRA actually is (a business league with no private owners) and what kind of information the member should have access to if the company was being run as is intended.
As does the NFL, the NHRA should be making its Bylaws and financial reports open to inspection by members.
The fact that the NHRA Bylaws are kept hidden behind the "cloak of secrecy" brings up some interesting questions.
What would happen if, God forbid, something would happen to incapacitate all the current board members?
How is a new board of directors to be appointed in this case, with no existing board members left to elect them?
With no access to the Bylaws there is no way to answer important questions like this.
This is not the way the company was originally set up to operate and its also not consistent with the way a non-profit business league is expected to run.
The current board is running the company like they own it (they don't ) and the only reason they can get away with it is because we are letting them do it. Do you think NFL owners would tolerate something like this?
I think things may soon get bad enough that NHRA members may finally get off their duffs and work together to force the NHRA to run like a true business league is intended to be run, with the NFL being a pretty good example to point at and emulate.
