X-Message-Number: 30276
From: David Stodolsky <>
Subject: Re: Examining the arguments
Date: Tue, 8 Jan 2008 08:52:20 +0100
References: <>

On 6 Jan 2008, at 19:59, david pizer wrote:

> Dr. David S. said:
> In general, the self-appointing model is most
> appropriate for the control of funds, as opposed to
> direction of a company.
>
> David P. replies:
> 1. Why do you think that?

First, if we look at how other entities function, this is what we see  
often. This could be a result of most of these self-perpetuating funds  
being created by families and remaining controlled by family members.  
However, even when these funds appoint the company management (since  
they control most stock of the company), they are typically maintained  
as separated legal entities.

It takes different types of people and different expertise to run  
daily operations as opposed to long range investment strategies.


>
> 2. It has not worked for Alcor.  Years ago, they had a
> guy named something like Gemini who ran off with
> $100,000 of their cash, Then they had a president move
> hundreds of thousands of dollars into a company he
> owned a part of while he told them he was using the
> money to buy suspension equipment instead. Then they
> had a guy embezzle almost $200,000 to open a bar.
> Then they had a girl steal $10,000 cash.

These are operational issues, just what I suggested the current system  
is not suited for.


> We have no
> idea how many other cash thefts there might be because
> a small group of dictators who do not have to answer
> to anyone run the company and they don't have to run
> for re-election, THEREFORE their is no motivation for
> those who really know to tell us.  The motivation to
> be a whistle-blower is non-existent in Alcor.  If you
> tell, you might get fired, and even after you do tell
> the membership, they can't do anything about it
> anyway.

If there were two responsible bodies, this would be alleviated, since  
people could deliver sensitive info to a Board not having operational  
responsibilities and not affected by changes in management.

If this continued to be a problem, then a whistle-blower protection  
officer, bound by law not to reveal identities, could be appointed.


>
>
>
> David S said: This would also sharply reduce the risk
> of someone trying to get on the Board with the
> objective of financial gain.
>
> David P.'s Reply
> 1.  How would it sharply reduce the risk of someone
> trying to get on the Board with the objective of
> financial gain?

What I meant to say here is "Advisory Board". Since the Advisory Board  
would handle daily operational questions, the major funds would not be  
available to them. They would also be accountable to the Board (this  
should probably be called the Fund Board, or something, to avoid this  
type of mistake. The current advisors could be called a Scientific  
Advisory Board/Committee: People appointed for their competence. It  
could also function as a testing ground for new Board members).


>
> 2.  The president who moved the hundreds of thousands
> of dollars into his partly owned company was on the
> board.

This kind of double responsibility typically results in conflicts of  
interest and failures in oversight. An operational officer should  
never be permitted to hold a Board position. Many consider this by  
itself to be a corrupt practice, even if no irregularities occur.


>
>
>
> David S.  A first step would be to set up an Advisory
> Board, which would have full access to information and
> participation in meetings, but whose votes were
> advisory to the Board. I don't think this should be a
> large group.
>
> David P. I like this idea of an advisory board. Alcor
> has advisers now, but many of us would want both the
> directors and the advisers to be elected by the
> membership.

I don't see this as a realistic possibility in the short term.



dss


David Stodolsky    Skype: davidstodolsky

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