The final 2019-20 SFBC Board of Directors meeting was filled with unanticipated surprise and intrigue to close out the service terms of several of the current directors.
The meeting opened with an invitation for SFBC members present to offer public comment. Edward Hasbrouck, SFBC member for over 25 years, offered feedback to the board about the process of conducting annual member meetings and made a case to the board that the January 22 member meeting was in violation of SFBC bylaws. Mr. Hasbrouck highlighted the SFBC bylaw requirements that the annual member meeting be chaired by the president, not the executive director, and that the annual meeting provides members with the opportunity to bring any business before the organization, a collaborative system to ensure member input and participation in the organization. Mr. Hasbrouck concluded with the broad statement that the fiduciary duty of directors is to ensure adherence to the organizational bylaws, and that in order to do so, the annual member meeting must be conducted again in the manner specified in the bylaws.
The agenda then included a presentation by Gene Takagi, an attorney from NEO Law Group, who offered a 34-slide power point presentation at the request of board President Jean Kao to the board. The many obligations specified in California Corporations Code regulating directors of corporate boards were summarized during the presentation, though references to legal code (e.g., Cal Corp Code 7231) made it unclear the extent to which the corporate board regulations referenced in Mr. Takagi’s presentation were applicable to member-based advocacy organizations such as the SFBC. The presentation appeared somewhat out of context until the “action item” was revealed by President Jean Kao following Mr. Takagi’s presentation. Specifically, the behavior of Shirley Johnson, a director retiring from the board, was singled out for censure as a board action item.
The directors briefly attempted to discuss the action item in the presence of SFBC members and the public. Director Shirley Johnson was alleged to have disclosed confidential discussions that took place during a closed session portion of a board meeting held on January 3. Given that Director Johnson was not present for the board meeting, Director Kelli Shields asked board President Kao if anyone had spoken with Director Johnson about the censure. President Kao declined to answer the question. Several directors (Marie Jonas, Juli Uota, Jean Kao) spoke in support of censure, while several other directors (Kelli Shields, Preston Rhea, Nicholas Aulston) had reservations. After some general discussion of closed session as a “safe space,” Director Meaghan Mitchell made a motion for the board to go into closed session, and SFBC members were asked to leave the room.
Upon return of member participation in the board meeting, the board voted on a motion to censure Director Shirley Johnson in the following manner:
Opposed to Censure: Preston Rhea, Kelli Shields, Nicholas Aulston
In Favor of Censure: Jean Kao, Jane Natoli, Juli Uota, Alexandra Sweet, Meaghan Mitchell, Brad Williford, Marie Jonas, Sarah Bindman, and Robin Abad Ocubillo
Abstained: Mary Kay Chin
Absent: Andy Thornley, Shirley Johnson
The rest of the meeting was a sprint to finish as close to the 8:30 end time as possible, so the final board meeting of the year left the members present with more questions than answers. Questions, such as:
What confidential discussion allegedly shared by Shirley Johnson was so egregious that President Kao thought it necessary to bring the motion to censure?
Why did the presentation by Gene Takagi on director fiduciary responsibilities ultimately result in the board’s focus on release of confidential information, rather than, for example, director abstention from voting where conflicts of interest may exist, a topic emphasized during previous board discussions in the 2019-20 term?
Why were the legal questions posed by member Edward Hasbrouck earlier in the same meeting during public comment not considered as a relevant part of the discussion?
Was Shirley Johnson attempting to meet the fiduciary duties cited by Gene Takagi (Cal Corp Code 7231) to act in “the best interests of the corporation” by exercising “reasonable inquiry” when engaged in the behavior censured by the directors?
Did the motion to censure Shirley Johnson ultimately increase the director liability exposure discussed by Gene Takagi, and by extension the legal exposure of the SFBC to accusations of defamation?
Are there other people besides Shirley Johnson whose character is being impugned during closed session discussions and for whom members may not even know about?
Questions require investigation in order to provide answers, but as of the closure of the final SFBC board of directors meeting for 2019-20, there were more questions than answers.