wfn.org | Streamlining Trust Company nominations

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Note #7160 from PCUSA NEWS to PRESBYNEWS:

15-May-2002
02179

Streamlining Trust Company nominations

Change would allow Foundation to propose New Covenant trustees

by Evan Silverstein

LOUISVILLE - The Presbyterian Church (USA) Foundation is a step closer to allowing its trustees - rather than the General Assembly Nominating Committee (GANC) - to appoint members to the board of its for-profit subsidiary, the New Covenant Trust Company. 

During a meeting here last month, the Foundation's trustees unanimously approved a "deliverance" asking the General Assembly for a "change in governance" giving it broader authority to nominate members for the trust company board. Nominations are subject to approval by the Foundation trustees and the GANC.

"Really, the only change is that we can act more rapidly," said Bob Leech, the Foundation's President and CEO. "The General Assembly Nominating Committee would have the right, after the fact, to challenge anyone they believe would not make a good member."

The Foundation trustees approved the change during a meeting last October. The matter now goes before next month's 214th General Assembly (GA) in Columbus, OH. 

The Rev. Clifton Kirkpatrick, stated clerk of the General Assembly, expressed "accountability concerns" after the October vote, objecting that the proposal would sidestep the usual practice, in which the GA elects board members of church-related entities. 

Those concerns have been addressed to Kirkpatrick's satisfaction.

"Yes, we have had a good working relationship with the Foundation," Kirkpatrick said. "And I believe they've worked out a formula between us to both honor the need to be accountable to the General Assembly for all of its incorporations, and at the same time to empower the Foundation to take some leadership in proposing nominees that can meet the technical and expertise requirements of the New Covenant Trust Company."

New Covenant Trust Company is a four-year-old, for-profit subsidiary that manages a group of mutual funds called New Covenant Funds. It operates under federal government scrutiny and pays taxes on its profits. 

"We've resolved all these issues with everybody's agreement," Leech said. "This is an example of how differences of opinion can be worked out within the church."

Leech said the Foundation will consult on nominations with the GANC, which will keep a "waiting list" of Presbyterians qualified to serve on the 12-member board.

When the New Covenant Trust Company was created, in 1998, the General Assembly passed an exemption allowing its board members to be chosen from the trustees of the Foundation, bypassing the normal GANC process. The new proposal would make the exemption permanent and broaden the pool of candidates to include all Presbyterians in good standing. 

Foundation officials claim the current nominating process takes too long, allows for too few candidates, and results in a board that may not comply with the guidelines of the Office of the Comptroller of the Currency (OCC), the federal agency that charters, regulates and supervises financial institutions.

Leech said vacancies on the board must be filled quickly to satisfy the OCC.

The Foundation, the first organization of its kind to start a federally chartered trust company, receives and manages financial gifts to the church and manages endowments of Presbyterian institutions. Earnings go to support Presbyterian mission and ministry.

Foundation Board

During the April 24-27 meeting, the Foundation's board also approved a deliverance that would reduce the number of Foundation trustees from 42 to 19 over the next four years. 

The idea is to save money for the Foundation, whose revenues have dipped from $20 million to about $17 million over the past two years. 

"It will allow us to cut out a significant amount of expense," Leech said. "And it will probably allow us to be able to have our board meetings at the Foundation (office), as opposed to having to rent conference rooms at hotels and so forth."  

Leech said the board would still include a trustee emeritus and two at-large members: Kirkpatrick and John Detterick, executive director of the General Assembly Council (GAC). 

Expansion

The trustees also unanimously approved a $3 million expansion and renovation of its main office in Jeffersonville, IN, just across the Ohio River from Louisville. The project will add 11,000 square feet to the Foundation's 16,000 square-foot headquarters.

The addition, which would include office and conference space, is needed because the Foundation's 72 employees have outgrown its 14-year-old digs. The close quarters prompted the Foundation to move its development and marketing employees into a nearby building three years ago. 
Those eight employees will return to the main office when the lease on their current building expires on Sept. 30. 

The Foundation considered building a new building in Jeffersonville or relocating to Louisville, but both ideas were deemed cost-prohibitive.

Officials hope to break ground this summer and finish the expansion project next spring.
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