What is the lawsuit about?
SCF has asked the court to issue a “declaratory judgment” to resolve a disagreement about how to interpret a federal law (Section 325 of PL 105-83), that authorized the creation of ANTHC and provided for the co-management of the Alaska Native Medical Center.
SCF claims that section 325 entitles SCF to unprecedented access and authority, including the right to:
- access all information at ANTHC, even executive session discussions, attorney-client privileged advice, and sensitive information about other regional health organizations and their patients;
- demand that ANTHC revamp its governing documents, after almost 20 years of operations; and
- prevent the Board from delegating its authority to an executive committee to ensure consistent and timely decision-making.
Does ANTHC allow its Directors access to enough information for due diligence?
Yes. Individual ANTHC Directors may review significant amounts of information to support their decision making.
Has ANTHC engaged in improper conduct?
Absolutely not. There are a number of misleading and completely inaccurate claims included in SCF’s complaint.
What happened with the President’s position?
- Prior to 2014, ANTHC combined the Chair of the Board and the President positions.
- Although it began as a part-time position, the President’s responsibilities increased significantly over the years
- ANTHC more than tripled in size
- The scope of its activities greatly expanded
- By 2008, the President’s responsibilities required a full time commitment.
- In 2014, the Board voted to uncouple the Chair and President positions and give itself the option in the future to have different individuals serve in each role.
- At the same time, the Board formally recognized that the President’s role had become a full time position and worked with an outside expert to set fair, market based compensation for the President position.
- That resulted in a significant increase because the prior pay was:
- Based on a Chair position instead of a President position that is responsible for all operations
- Set well below the market
- Set for a part time position rather than a full time position
- Had not been adjusted for more than five years
- The Board set the remuneration for the Chair position the same as for other Board Officers.
What does the ANTHC President do?
In addition to his separate responsibilities as Chairman of the Board, the President is the highest ranking executive officer of the Consortium. He is responsible for:
- Strategic Leadership
- Oversight of Financial, Operational and Other Critical Functions
- Major Contracts and Agreements
- External and Intergovernmental Affairs
- Developing and maintaining key partnerships
Why did the Executive Committee approve the President’s contract?
- In 2014-15, the Board of Directors made a significant shift to set employee compensation at competitive market rates so it could hire and retain valued employees.
- The Executive Committee was responsible for oversight of executive compensation.
- Its charter included a procedure to help the Executive Committee comply with non-profit requirements and ensure that compensation was reasonable and not excessive.
- In accordance with its charter, the Committee worked with an outside compensation expert to determine the appropriate range for the President’s compensation.
How much advance notice of the potential change in compensation did the Directors have?
- The Board’s discussion regarding compensation began more than six months prior to the Executive Committee discussion.
- Prior to ratifying the Executive Committee’s decision, other Directors had an opportunity to review the Executive Committee and compensation expert’s recommendations in detail.
How were the decisions about Board compensation and President’s compensation related?
- Generally, both followed the Board’s decision to move toward more competitive, market-based levels and to use external experts to conduct surveys and assist with due diligence.
- Otherwise, they were completely independent decisions.
Why did the Board ask the Chairman & President to evaluate historic Board compensation?
- In December, the Board of Directors tasked Mr. Teuber with arranging for the evaluation of historic board compensation.
- The Chairman & President was the most “disinterested” (i.e. impartial) Director on the Board, because his own pay would not be affected by the evaluation or recommendation.
Did the Chairman & President propose a retroactive compensation plan at the December meeting?
- No. He did not make a proposal in December 2014 (nor in a later June meeting, when the Board considered the issue six months later).
- At Chairman Teuber’s request, the Executive Committee formed a separate ad hoc committee, including three other individuals, who would be least affected by the potential outcome.
- The ad hoc committee’s evaluation and recommendations were considered by the Board of Directors in June 2015, more than six months after the December meeting.
Was the President & Chairman’s proposal an “implicit message” that Directors would be rewarded for supporting proposed bylaw changes?
No, he didn’t make a proposal in December (nor in June).
How were bylaw amendments proposed?
- Directors were given 21 days advance written notice of the substance of the proposed changes.
- The Bylaw and Policy Committee recommended the changes for the Board’s consideration.
- The discussion at the Board meeting lasted more than an hour and included a number of proposed amendments to the proposal.
Were the changes adopted with little or no discussion?
- No. The Board discussed the proposed changes for more than an hour.
- The discussion included an overview of the proposals.
- The Board considered multiple motions to amend the proposals in the course of the discussion.
Did the President & Chairman refuse to entertain or answer questions from Ms. Sylvester about proposed changes when he chaired the December 2014 meeting?
- No. Ms. Sylvester actively participated in the discussion of the proposed changes.
- She asked at least 10 substantive questions during the discussion.
- She received responses to all the questions she asked during the meeting, including many responses provided by Chairman Teuber.
- Ms. Sylvester made five motions related to the proposals
- She also made at least six comments on the proposals.
- In addition, ANTHC provided written responses to three pages of Ms. Sylvester’s questions (and comments) that she distributed at the Board meeting.
Did the changes in the bylaws affect the authority of the President?
- No, not in any significant way. The changes clarified the already in place duties and responsibilities of the position.
- They also made it a separate position (instead of combining it with the Chair position).
Can the ANTHC Executive Committee make decisions without getting Board approval?
- No, ratification is currently required for all Executive Committee actions.
- All Executive Committee decisions have been ratified by the Board, including those related to the President’s compensation.
How often does the Executive Committee meet?
Since 2014, it has met only once or twice a year.
Do Directors get notice of Executive Committee actions?
Yes. From day one, the Executive Committee has been required to provide notice of its actions and decisions to the ANTHC Directors.