The Reimagine Committee Worked on the Wrong Problem!

Finances, not governance, is the critical problem threatening our Association.

The Reimagine Committee, formed under the presidency of Steve Goolsby and continued this year, has presented their proposed Bylaws and structural changes to AAPG leadership and the House of Delegates. Some of these changes include the elimination of the House of Delegates, Divisions, the Advisory Council and the office of Treasurer, as well as changing the requirements for petition candidates to the detriment of anyone in the International Regions.

As you would expect, there is increasing opposition to this plan. Not only because the Constitution and Bylaws are not the cause of AAPG’s problems, but many believe the result of these proposed changes will damage the organization and disenfranchise the membership.

Their message is that these changes will “simplify” the current structure and unite the membership with better communication. I believe that these fundamental structural changes are not necessary now and do nothing to correct the actual problem of the organization, which is the financial health of AAPG.

The proposed changes have been a moving target for the Ad Hoc Committee. Until Feb. 23, the only presentations allowed of the Reimagine Committee’s New Org plan were discussing the “for” side of the argument, not only in video presentations by President Claudia Hackbarth, but also presentations by Chair of the House Robert Archer to the full House membership. No “against” arguments were allowed.

On Feb. 23, a small group of delegates from the Mid-Continent Section and Southwest Section had a Zoom call where arguments against the new plan were heard. Then on Feb. 28, another Zoom call with the Gulf Coast delegates allowed arguments against the new plan to be heard and discussed. The House Delegates were to get their commentary on the new plan back to the Constitution and Bylaws Committee by March 2 to make recommendations on changes that would go back to the Reimagine Committee.

Apparently, there was enough dissatisfaction with portions of the proposed New Org, which had changed Section/Region boundaries and altered requirements for membership, that members of the Constitution and Bylaws Committee who are also on the Reimagine Committee realized that this New-Org plan was never going to pass in the House of Delegates annual meeting on May 31. So, it was back to the drawing board to wordsmith the Bylaws again to try to make this new “Board” plan palatable enough to pass in the House meeting.

All of this points to a restructuring plan coming out of the Reimagine Committee, which is ill-conceived, not thoroughly vetted and rushed. Bill DeMis, foreman of the Houston Delegates, is on the Constitution and Bylaws Committee and has recounted that the process is so hurried that he lodged a formal protest. The Constitution and Bylaws Committee members can only make recommendations to the Ad Hoc Committee, but it is up to the Reimagine Committee to approve the suggestions coming from the Constitution and Bylaws Committee (or not). At the Constitution and Bylaws Committee meeting on March 7, major changes were made once again to the Bylaws regarding the proposed U.S. regions, which caused issues that cascaded throughout the entire document.

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The Reimagine Committee, formed under the presidency of Steve Goolsby and continued this year, has presented their proposed Bylaws and structural changes to AAPG leadership and the House of Delegates. Some of these changes include the elimination of the House of Delegates, Divisions, the Advisory Council and the office of Treasurer, as well as changing the requirements for petition candidates to the detriment of anyone in the International Regions.

As you would expect, there is increasing opposition to this plan. Not only because the Constitution and Bylaws are not the cause of AAPG’s problems, but many believe the result of these proposed changes will damage the organization and disenfranchise the membership.

Their message is that these changes will “simplify” the current structure and unite the membership with better communication. I believe that these fundamental structural changes are not necessary now and do nothing to correct the actual problem of the organization, which is the financial health of AAPG.

The proposed changes have been a moving target for the Ad Hoc Committee. Until Feb. 23, the only presentations allowed of the Reimagine Committee’s New Org plan were discussing the “for” side of the argument, not only in video presentations by President Claudia Hackbarth, but also presentations by Chair of the House Robert Archer to the full House membership. No “against” arguments were allowed.

On Feb. 23, a small group of delegates from the Mid-Continent Section and Southwest Section had a Zoom call where arguments against the new plan were heard. Then on Feb. 28, another Zoom call with the Gulf Coast delegates allowed arguments against the new plan to be heard and discussed. The House Delegates were to get their commentary on the new plan back to the Constitution and Bylaws Committee by March 2 to make recommendations on changes that would go back to the Reimagine Committee.

Apparently, there was enough dissatisfaction with portions of the proposed New Org, which had changed Section/Region boundaries and altered requirements for membership, that members of the Constitution and Bylaws Committee who are also on the Reimagine Committee realized that this New-Org plan was never going to pass in the House of Delegates annual meeting on May 31. So, it was back to the drawing board to wordsmith the Bylaws again to try to make this new “Board” plan palatable enough to pass in the House meeting.

All of this points to a restructuring plan coming out of the Reimagine Committee, which is ill-conceived, not thoroughly vetted and rushed. Bill DeMis, foreman of the Houston Delegates, is on the Constitution and Bylaws Committee and has recounted that the process is so hurried that he lodged a formal protest. The Constitution and Bylaws Committee members can only make recommendations to the Ad Hoc Committee, but it is up to the Reimagine Committee to approve the suggestions coming from the Constitution and Bylaws Committee (or not). At the Constitution and Bylaws Committee meeting on March 7, major changes were made once again to the Bylaws regarding the proposed U.S. regions, which caused issues that cascaded throughout the entire document.

The Real Problem

The cost of constant rewriting of the new Bylaws is mounting and is something that AAPG can ill afford. Even with the Reimagine Committee changing the language to once again tie membership to a geoscience degree, and keeping the current section/region boundaries intact, there are many flaws to the plan, and none of them address the real issues of AAPG’s longevity – finances!

If you ran a business losing over $1 million per year (on average) for the last 10 years, would you ch ange your structure or try to fix your finances? If you are going broke – do you move staff around to different offices, hoping that a different “look” would solve the problem?

This is the issue AAPG is now facing with this new “Reimagine” structural change. There has been no cost analysis, no business plan, and hundreds of thousands of dollars spent on rewriting the Bylaws three times in as many years (twice for the merger attempt and now the New Org structure).

First, let’s dig into the financial issues at hand. The House of Delegates Chair Robert Archer and Treasurer Ali Sloan did a deep dive into AAPG’s most recent year’s financial reports. In 2023, AAPG had a deficit budget of $1.79 million. Why? Partially because the tendency is to overestimate income from conferences, publications, and other educational offerings, and to underestimate the costs for these programs. But the elephant in the room was a “debt-forgiveness” loan to the Dubai and London offices of $562,000! These two offices are now being shut down, but because of country laws, you don’t just turn off the spending spigot!

Additionally, everything AAPG does regarding programs and publications has a staff charge as overhead to accompany it. Salaries, benefits, and fees alone run $5.7 million per year. AAPG owns a building in Tulsa that is not fully occupied anymore because many employees are working from home, but still costs more than $245,000 a year in maintenance! Then, you throw in costs for publications and programs like the Visiting Geologist Program and the divisions, and it all quickly adds up. One former treasurer called it “death by a thousand cuts.” AAPG carries 43 employees and contractors to cover membership needs. How will a Constitution and Bylaws change fix this?

Is it intended to help the financial picture and increase the membership? In an email from President Hackbarth, dated Dec. 21, 2023, in response to those questions, she said: “In fact nobody from the Reimagine Committee is claiming that both of these aspects are the goal of changing the structure.”

Then why do it? Why not work on the financial issues before moving everyone’s cheese around?

Figure 1 compares financial data for the four major U.S. geoscience organizations based on IRS Form 990s (public IRS data available for all non-profits). The data shown applies to AAPG, the Geological Society of America, the Society of Exploration Geophysicists, and the Society of Petroleum Engineers. In figure 1(a) the revenue for SPE was divided by three to get it to fit onto the graph. GSA had asset sales of more than $10 million in 2022, or their curve would have steeply declined. But the chart shows that every geoscience organization has had declining revenue in the period of 2014 to 2022 (the last year for which data was available).

So having an SPE-like board did not protect any organization from a loss. Looking at graphs (b), (c) and (d), while AAPG had increasing revenue in 2022, and the revenue per employee increased, the expense and salary per employee also increased. AAPG is a near-leader in the normalized revenue per Employee (c), so why has AAPG lost so much money? Uncontrolled expenses.

Actual declines in revenue for each organization in the years 2014 through 2022 were: GSA – 33 percent, AAPG – 37 percent, SEG – 49 percent and SPE – 51 percent. So SPE, with its board structure, was the biggest loser!

The point here is that having an SPE-like board structure does not protect AAPG from declining revenue, so why put so much effort into changing AAPG’s structure at this time, when the focus should be on controlling costs and increasing revenue?

The Bottom Line

AAPG does not have a governance model crisis. AAPG has an expenses crisis. We are merely trying to do too much for too many and are paying the price.

AAPG currently has about $10 million left in the bank/investment portfolio. At the rate at which the Association is running through money, there are about six years left to operate, leaving $4 million to shut down the organization. It is imperative that the financial picture gets fixed before we submit the membership to more organizational chaos. The members are becoming increasingly wary of the leadership’s attempts to change the structure of AAPG but not deal with the finances. We have members dropping/resigning from the organization, just based on the last three years of pointless tinkering. The AAPG they joined no longer has the same face.

Figure 2 shows the new structure of the Board of Directorates. There are six technical directors, and each member will now need to “affiliate” with one of the directorates to have their vote counted. A member may belong to more than one for an extra fee, but they must state their primary directorate to be counted. And to kick off this new structure, there will need to be many new elections.

One of the new technical directorates is described as the “alternative and future energy” director! I can see getting into geothermal and CCUS (sort of) – because both those fields require the knowledge of the sub-surface. But the alternative and future energy description could also involve wind and solar – and that is not what AAPG is all about!

The current AAPG Executive Committee is made up of seven people. Three of those positions carry the voice of the members, that being vice president-sections, vice president-regions and chair of the House of Delegates. In the New Org Board structure, there is still a sections director and regions director, but the stakeholder relations role is not a membership position. It is a position to be held by a Corporate Advisory Council member, which is not “membership.” This new Board is now 16 people, which includes two non-voting staff members and only four of those positions represent the Membership. The academic relations director is meant to work with colleges and universities.

The House of Delegates met on March 15 to take a “straw vote” on the changes to the Bylaws. The Executive Committee met on the 20th to approve critical changes. Final changes to the document will be set in stone on March 28.

The annual meeting of the House of Delegates is to be held on May 31 to vote on this new structure. I recommend that Delegates vote against the proposed New Org, and by doing so, also ask their leadership to focus on controlling costs and growing revenue.

The bottom line is this: until we fix AAPG’s financial woes, all the suggested restructuring is like moving the deck chairs around on the Titanic.

Editor’s Notes

  • The final meeting of the president’s ad hoc committee (that is, the Reimagine Committee) was on Jan. 3, 2024. All subsequent iterations of the draft bylaws were between the Executive Committee and the Constitution and Bylaws Committee of the House of Delegates, including past HoD chairs, some of whose members carried over from the earlier Reimagine Committee. Feedback from the C&BL, from delegates in general, and from members who commented on earlier drafts was incorporated in the proposed bylaws that were ultimately approved by the Executive Committee on March 20.
  • The Stakeholder Relations Directorate includes the Corporate Advisory Board and other stakeholders. The elected director of stakeholder relations may or may not be a member of the Corporate Advisory Board but will be a voting member of AAPG. If the Bylaws are adopted, the first director of stakeholder relations will be the incoming elected treasurer.
  • The Bylaws contain no reference to an extra fee for joining more than one technical directorate.
  • The key functions of the Divisions and the Advisory Council continue but under different names/ structures.
  • The Divisions become Technical Directorates and the Advisory Council functions are retained by members the Board, Nominations Committee, and Honors and Awards Committee.
  • Regarding requirements for petition candidates, there is no greater effect on the regions than on the sections. However, it does require that at least some signatures come from other sections and regions in addition to immediate local colleagues.
  • For more information, see the FAQ at www.AAPG.org/Reimagine.

Comments (1)

Editor's Notes - Suplementary
While reading through President-Elect Deborah Sacrey's article, I noted a few inaccuracies. These being: 1) Bill DeMis is the House of Delegates Foreman for the Houston Geological Society Delegation. He is not "foreman of the Houston Delegates." No such position exists. In fact, there are many individuals outside of the Houston area that act as the foreperson (i.e., delegation point-of-contact/primary communicator/organizer of activities) for their respective delegations. 2) If the market bull run were to end unexpectedly, AAPG would have significantly less resources than the current 10 million dollars that resides in its investment portfolio. 3) Poorly performing organizations routinely alter their structure with the intent of improving their finances. The ones that didn't, or couldn't, no longer exist (e.g., Blockbuster, Kmart, Sears, etc.). 4) The Society of Petroleum Engineers (SPE) is not a geoscience organization. 5) Current practice for AAPG full members is to "affiliate" with an affiliated society. This ensures that their votes are counted.
4/19/2024 1:33:15 PM

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