AAO President's Report
Dr. Mel DeSoto
I was unable make the ad interim this year as it coincided with the annual meeting of the American Dental Educators Meeting (ADEA) in Orlando. The ADEA meeting is a very important event with the current problems in dental education. The AAO will sponsor a luncheon for all of the Deans with a short program on orthodontic education developed by our COE.
There are several issues that I wish to report on before the annual session. I will start with the report from Kathy Henrich, the lady selected to review the performance of the BOT. As the performance of the board in fulfilling its responsibilities and duties assigned to it by the bylaws is very important, I hope that you will also welcome my perspective on the report having served on the BOT for the last 10 years and having devoted a large portion of my professional life to it. There should be an opportunity for all parties to respond to meet the test of fairness.
There is much misinformation in the report. The BOT does spend time at each meeting scanning the horizons and looking at the big picture. The November meeting was an aberration, in that we had to accommodate both OMA (which she did count as scanning) and a presentation by Schuup, which is also a big picture item, so we used our scanning time on items that we thought more pressing, and postponed some of the more esoteric to the February meeting. Mrs. Henrich did not include in her report that we have a separate board planning session each year that is totally devoted to scanning. Why was that left out if scanning is so important to leading? The quotes from some of the council chairs or constituent chairs were never checked for their validity by allowing any board member to reply, and picking some comments without publishing all is not objective. I am sure that one of the interviewees may think we were not using electronic communications but that does not mean his/her perception is correct. The board resolves many issues electronically, and we all have laptops and cell phones and use them extensively, as well. How long have any of you ever had to wait to receive a response from me by e-mail, phone, or fax? We use e-mail ballots for all the items that we can, but state laws, for good reasons, restrict us. Without an opportunity to debate by Missouri law, an e-mail ballot requires a unanimous vote to decide an issue. We use electronic communications for all of our committee work, which is substantial and saves board session time. The board will be trained in new paperless meeting software at the annual session and will use it for our August board meeting. We have many conference call board meetings between the scheduled face to faces and we prepare for them through electronic communication. Our boardroom is wired for WiFi and we have just received Verizon wireless cards for our laptops that will access the Internet anywhere that their phone network works. The fact is that we are using electronics every day.
As to the charge by one person that the board should communicate more, I don't know how we reach that person, and we are open for suggestions. It would have been better to specify in the report how we could improve with that individual. It is frustrating as I gave the SWSO board, council members, delegates, etc, a report after every board meeting, as does every trustee. We also send interim reports on important breaking news. Every trustee writes a report for his constituent newsletter and we publish The AAO Bulletin, which covers AAO BOT activity. That perception may be real, but that does not make it valid. Tell us how you want to receive information and it will be provided. It is not from lack of effort on anyone's part. Of course, we can't report on internal staff matters with legal implications or any other matters that are legally sensitive, but we do report all actions.
The charge that we change the councils' reports is invalid. We do not always approve council resolutions and may amend them but we do not change the report. I might add that the HOD does the same thing when it receives resolutions from the board or councils. The HOD rejects, refers, amends, or adopts at its discretion as that is its responsibility. No one expects that the HOD must accept all council action recommendations and should not expect the board to either. Councils are advisory bodies and not policy-making bodies.
There was a suggestion that the board should meet with the council chairs, which of course, we already do. Why did this individual not know that? We meet at the annual session each year with all of the chairs and the full board. We coordinate activities for the next year and each council knows what the other is doing. In my tenure, we have added two new councils, COIT and CONYM, which were results of leadership action. We sunsetted the Council of Library Services as their responsibilities could be more efficiently handled in house with a board committee and the librarian. This year, we have adopted every resolution that was sent to us from at least seven councils with no changes. The council system works well and is one of the strengths of the AAO. Yes, sometimes there is tension when the board does not approve a resolution or idea from a council but it should be no different than when the HOD does the same thing. If you give the councils policy-making authority, it will come primarily from the House's authority, not the BOT. That being said, we do need improvements in communications between the board and the councils. There were problems with COHC and COGA this year that need improvement. It should be the first topic of discussion at the council chairs meeting this year.
The board passed a policy for the Budget and Finance Committee to meet with the outside auditors at the last board meeting even before we received the evaluation report recommending it. It is a good idea and is now policy. I might add that I have talked privately with Judy Murphy, a chief officer of our auditing firm, RB&G, for the last three years and reported it to the board.
I am not ashamed that we spent half of our November board time managing internal matters and fulfilling the responsibilities assigned to the board by HOD policy and the bylaws (also HOD policy). Mrs. Henrich made some unflattering comments on agenda management but again is unaware that we already do what she suggested. Carla and I carefully organized the agenda items before the meeting and I had predetermined time limits for various items and had prioritized the list. The limits were not announced to the board but were on my agenda sheet and I monitored the time to keep us on schedule. We didn't use all of the time for some items and that allowed some extra time for some that generated more debate than expected. A good presiding officer manages this quietly and with an invisible hand. Mrs. Henrich was not in attendance the last two days of the February meeting as she only attended the budget section on the first day and did not observe that we covered an unbelievable amount of items (look at your packet with the constituent fact sheet, budget, resolutions reviewed, etc.) and finished the three days work exactly on time. We also covered all of the scanning items that were left over from November and a few new ones. Every item was covered with an ample time to debate. We had the exact same result in November. She has no idea of the preparation involved because she didn't observe it or inquire about it. I left Shreveport at 6 am the day before the meeting, was in the central office by 10 am and worked with Carla for the rest of the day on preparing the agenda. Every president has this responsibility and has done it successfully with a few variations in style.
I would add that Mrs. Henrich's report should have scolded us for too much material coming in at the last minute before a board meeting. That must improve. Our meeting calendar is crowded with meetings of ten councils, committees, ADA, constituents, special conferences, task forces, CODA, ADEA, ad interims. AAOF, ABO, etc. Our calendar is so full that some meetings must be scheduled shortly before board meetings. COM met only two weeks before the February board meeting and we also had the "Orthodontist as CEO" the week before the board meeting. Staff had a tough time getting a huge load of important work to us reviewed by the chair and legal counsel in time for sufficient study by the board before our meeting (yes, it was sent to us electronically). We are tweaking next year's schedule to relieve this situation. The board can become swamped, as one trustee reported, when all of the material comes at once. We need to do a better job of spreading it out.
The time spent on "ribbons and badges at the AS" would appear on surface to be silly of us but the ribbons are to recognize the AAO members who are delegates to the ADA at our annual session.
Considering that we want and need to improve our relationship with the ADA, it is not a trivial matter to acknowledge our members in leadership roles in the ADA. It took only a few minutes but it made her list of items of small importance.
There are always suggestions that we need to be nimble. If ever there was a time that the board has demonstrated that we are nimble, it is this year. Our response to Katrina in moving the annual session has been nothing short of extraordinary. Mrs. Henrich's report throws out the suggestion that we are not nimble without any mention of this major accomplishment. Fair and balanced?
The recommendations for changes in board structure governance are strictly boilerplate and come straight out of the Tecker and Associates textbook. The HOD considered almost all of them in 2004 after a report from a House task force. It was inappropriate to be in the report in the first place as the charge to Mrs. Henrich by the HOD was to evaluate the performance of the BOT period, as governance is not listed in the resolution at all. In her report, in what she labeled the first step, she added governance structure. She could have e-mailed those recommendations on governance immediately, as they were what she recommends for every board regardless. As for her statements "reluctance to accept new ideas" and "resort to the tried and true ways of doing things", those are conclusions that would require in depth knowledge of us rather than a cursory glance of a few days. I don't have the paper necessary to list all of the new ideas and changes that have occurred in the board and the AAO's way of doing business over the last ten years but suffice it to say that her statement is inflammatory and without examples or substance.
For the last comment on Mrs. Henrich, I think that the difference in the two of us is I could not disagree more with her statement that you cannot manage and lead at the same time. The great leaders of the world have also been good managers. It is your judgment whether or not the current BOT members are good at either but the premise that they can do only one is too flawed for reasonable debate, as there are many examples everywhere. Most of you need only look at your mothers and/or fathers to find good examples. I have difficulties taking any of her recommendations seriously that are built upon that principle that we are that limited.
The bylaws mandate that the BOT send the House a balanced budget. Therefore, the budget that you received has a dues increase of $222 and an assessment of $450 for the PR campaign as a board majority supported both the faculty salary augmentation resolution and PR proposals. The PR program includes it own funding via an assessment. The faculty salary augmentation resolution is in the regular budget and if adopted with the other items in the budget would create a deficit that would require the $222 to balance. However, due to prudent management using the old tried and true ideas, the AAO produced its second straight $3 million dollar surplus last year without any changes in dues. Our liquid reserves are $2.12 million over the 75% limit of expenses as defined by the House policy on liquid reserves. The liquid reserve policy requires that the BOT notify the House of the excess and the House decides what to do with the excess. The policy does not ask the BOT to recommend what to do with that excess other than it can give a portion of it to the AAOF for faculty awards. The board voted to give the AAOF $120K so there is now $2 million that the House can leave in reserves, spend to reduce a deficit, or use to lower the dues. I would urge that the SWSO support the faculty salary augmentation and consider submitting a House resolution to use $1 million or $1.3 million of the reserves to reduce the resultant dues increase. If the House takes $1.3 million out of reserves, then the required dues increase to balance would be approximately $100. If it takes $1 million out of reserves, then the dues increase to balance would be approximately $137 per member.
As for the faculty salary resolution, the arguments for it and the supporting data are presented in the background statement of the resolution so I won't repeat them here. Some of you will be concerned about how to pay for it next year if we don't again have the extra money from reserves. I believe in a strong reserves policy but I think that we are hoarding enough of our member's money at 75% of a year's expenses. I also believe that we are going to continue to be successful in producing surpluses in the future. Our income over expenditures is much better than budgeted for this fiscal year and that is without the boost that will come from the annual session, which is also ahead of any previous year at this time. The surpluses are due to much larger than projected profits from the annual session, our conferences, and from less expenditure on projects than projected. This has not occurred by accident but has been the result of the leadership of the BOT and management by our ED and staff. The items that are producing the surpluses are non-dues income, not membership dues. We have yet to find an accurate way to predict this uncertain income in our budget, so it is underestimated each year. Nevertheless, It is my belief that this trend will continue as the same factors are still in play. If you disagree with spending any of the excess reserve money, then please consider giving the membership a dues decrease with some of the $2 million dollar surplus.
As this is my last report to you, I would like to acknowledge all of you and past board members for the support that you have given me through all the years as well as this fantastic year of presiding as the president. It is impossible to understand how I have been so blessed as to be in this specialty, in this constituency with you, and to have the opportunity to serve in so many positions of leadership. It will be time to move on in a few months and although I do so with some trepidation, I welcome the challenge. I just put in five new chairs and a new panorex machine in my office so retirement is not on the immediate horizon. Bless you in your deliberations this weekend and I hope to see all of you soon.