Boards of Directors

Summary: This article traces the history of our parent board, with particular attention to Lorne Sanny’s principled resistance to but gradual acceptance of the degree of governance required by the board of a US corporation. Many other Nav countries have boards, ranging from nominal to directive, but their variety hinders useful generalizations.

Contents
Incorporation of The Navigators
US Board: 1960s to 1977
Defining the Structure of the Board
Clarifying Responsibility for the US and Non-US Ministries: 1977-1990
Relations between the International President and US Board: 1990s
Conclusion

Incorporation of The Navigators

Until 1943, The Navigators was an unincorporated association. The Navigators of California was incorporated on March 3, 1943.

In support of the incorporation, Dawson Trotman submitted an affidavit in San Francisco on February 25, 1943 in which he explained the name of The Navigators and what was called “the plan of the work,” describing how we typically ministered. He reviewed the use of Navigator homes and pointed out that “the greatest work is not done ashore but rather aboard ship.” Rather grandly, the affidavit1 asserts that “the scope of the Christian endeavor of this organization is now being enlarged to meet the needs of men and women everywhere.”

The affidavit recorded that, ten days earlier, Daws had been “duly chosen as presiding officer and chairman at a regular meeting . . . of the association . . . for the purpose of authorizing its incorporation and instituting all legal proceeding necessary to accomplish this result in the State of California.” A salient reason for incorporating The Navigators was to qualify donors for income tax exemption on their gifts. A secondary purpose was to have government recognition during the war years, as we worked so intensely with the US military.2

An advisory board of twenty-five counselors was set up. We also referred to this board, in the early by-laws in article XVI, as the governing body of the corporation. The board chose members of the corporation (article XIII). To be elected a member, one must have been “navigating” for at least six months and have subscribed to our statement of faith. Members were nominated by the president and approved by the board for one or more of seven standing committees. These included a Bible clubs committee and a missionary committee.3

The board was an “inside” board, except for one businessman.4 Dawson Trotman was the chairman. The board members were elected by the Navigator representatives at our annual staff conference.5

In 1956, Dawson died. Lorne Sanny became chairman of the board of directors.

The primary purpose of incorporating The Navigators of Colorado on July 3, 1956 was to set up a legal body to hold title to our newly acquired Glen Eyrie property.6 Our California corporation was eventually merged with the new Colorado entity on March 13, 1970.

US Board: 1960s to 1977

The Navigator overseas missionary program was developing. The US board was responsible for all American staff, including those serving overseas. Early in 1961, we held our first overseas policy conference. This conference resulted in five overseas budget policies7 for the board to supervise. Raising money for such budgets was a joint responsibility of the board and the Representative, the latter being attached to our public relations department for this work of deputation.

Conclusion 20 of the conference addressed what we then called nationals,8 observing that our relationship with them “should be flexible, dictated by the varying circumstances in each country.”

Soon we began a process to internationalize board membership. Joe Simmons of New Zealand was elected. We considered Dr. Benjamin Chew of Singapore and General Wilson-Haffenden of England. This endeavor only lasted for a few years.

During those years, we also used an advisory council. For example, in April 1964, participants inlcuded Dr. Dave Stuart, Ray Vanderpool, Gene Warr, Pete Funk, Ed Van Dellen, Guss Hill, and Ford Madison.

In his May 1964 report to the staff conference, Sanny mentioned that H.J. Taylor was serving on the board, and that this was working very well. He told the staff, “I’m going to be recommending that we increase the board to nine and that we add four—not all at one time—non-staff and five staff members on our board.”9

A month later, looking to the future, Sanny told his continental directors that “local corporations of The Navigators” should have a majority of staff on their boards.10

Gradually, three trends converged to influence the posture of the US board:

A strong overseas resistance to perceived American “domination”
The growing realization that the US board could not help with overseas problems
The expanding US work, which required increased board involvement

Until 1977, this board considered itself to be responsible for the entire Navigator work around the world; however, its relationship with the early boards emerging in a few countries outside the US remained untested.

In 1963, we solicited the help of the American City Bureau to expand our financial resources. They recommended that the board should be largely a non-staff board because foundations and wealthy people would not give to an organization controlled by a staff board.

Sanny gave considerable thought to the basis for a board. Though he could find no direct counterpart in the Scriptures, wise counsel (Proverbs 24:5-6) and the need to demonstrate to “all men” that we are “honest and above suspicion” (2 Corinthians 8:21) influenced his thinking. He recognized that a board of directors, under US law, is a legal requirement. It represents the owners or stockholders, and is the responsible organ of the enterprise.

We recognized that the chief value of an outside board was to demonstrate our commitment to be wise and honest stewards of the resources entrusted to us. An outside board could give objective counsel, whereas “insiders” might be too emotionally involved. It was important, also, to assure large donors that we were well managed. However, after weighing the many reasons advanced for having an outside board, we concluded that they were not necessarily valid in our case.

Among the reasons for Sanny’s resistance to an “outside” board were:

God uses a man, not a committee
Such boards are generally too busy to keep current on our strategy and tactics
They do not help to carry out policies that they have helped establish
The problems encountered in Young Life, Child Evangelism Fellowship, and other organizations prompt us to shy away from a predominantly “outside” board

Sanny added that “one of our big problems on the matter of a board is that of human nature.” We should be aware of the following tendencies:

Susceptibility to power
Changeableness—in opportunity, health, attitudes, outlook
Limited knowledge, limited experience
Limited capacity to bear certain responsibilities

His notes end with an additional reflection on electing board members, taken from The Life of Faith by A.W. Tozer, which ran for three paragraphs warning against ambition,11 unqualified democracy, and hesitant leadership.

In the 1960s, our board’s responsibility fell into two categories:

Legal: to act as trustees for holding property; to be the legal representatives of The Navigators where such corporate representation was needed.
Administrative: to administer the work of The Navigators through the president and the team he selects to help him; to review, to appraise, and to receive appeals.

In the early 1960s, we considered a proposal that our continental directors be members of the board. This would allow all the staff to be directly represented and provide a richer perspective on the nations. Disadvantages included the difficulty of meeting often enough and the imbalance between the size of the largest and smallest entities. Furthermore, Sanny was reluctant to have all his assistants serve on the board. Then, in 1964, it was agreed that the overseas director, instead of the continental directors, should serve on our board.

In 1966 was that, until adequate reasons for a change were forthcoming, the board should consist of five or six staff members and two or three non-staff members. This board would be self-perpetuating, continuing without fixed terms, and would meet regularly to handle the business of The Navigators, with an executive committee of probably three members authorized to act on interim business whenever a need arose.12

Clarifying Responsibility for the US and Non-US Ministries: 1977-1990

The US board agreed in 1977 to consider itself a US board and not an international board. Ministries in other countries had begun to establish their own Navigator boards as appropriate.13

In the same year, Sanny resigned as president of our US corporation. Jack Mayhall was elected as US Director. The objective was to clarify the distinction between the American Navigators and our ministries in other countries.

However, it soon became clear that Mayhall now had two supervisors: the US board and the international president. So, Sanny reversed himself and in 1981 stepped back into the presidency of the US corporation and chairmanship of the US board, while Mayhall continued as US director. Thus, the US director again had one supervisor, not two. Furthermore, any future international president would have a firm grasp on the home base that continued to provide most of the money,14 staff, and missionaries for the global Navigators.

Sanny wrote a summary of his perspective in 198115 in which he explained his reversal by writing, “At this time, the US board has five staff and six non-staff and is self-perpetuating. Nineteen other countries have their own Navigator boards.” He commented, as he had done before, that he could find no direct biblical counterpart to a board: the closest would be counsel and direction (Proverbs 24:5-6) and to help demonstrate that we are honest and above suspicion (2 Corinthians 8:21). He held to three objectives:

To structure ourselves so that the president was responsible to one body for his entire responsibility
To provide a means to select and give backing to the president that is both “top down” and “bottom up,” as is our procedure in other personnel selections
To arrange for the ultimate authority to be with the staff

Earlier in 1981, Sanny had written a classic statement16 of his view on the responsibilities of our US board, dividing his rationale into three segments: biblically, legally, voluntarily.

As Sanny continued to try to “square the circle,” he was carefully investigating the establishment of an international parent corporation. This would probably be based in the US, but conceived as a board of overseers for Navigators around the world. The overseers would be elected by our entire staff of Representatives or by the international navigator council. He began a feasibility study with Donald McGilchrist on forming an international board,17 registered in a country such as Switzerland or Bermuda. This was soon deemed impractical.18

After consulting attorney Philip Hull and, more importantly, seeking to visualize what such a board would do, Sanny decided it was not worth the extra machinery and cost.19 Instead, the general director’s home country board could provide what was needed.

After this flurry of somewhat theoretical research, we settled down and worked in a more practical fashion on how the US board should relate to our new International Navigator Council (INC).20

Meanwhile, we had become among the founding members (1980) of the Evangelical Council for Financial Accountability (ECFA), on which our treasurer, Jerry Bridges, served with distinction. This council had seven minimum standards for admission, which we met.

When the INC was formed in 1981, the selection of the international president was introduced in their proposed guidelines.21 The fleshing out of this intent was done by Sanny and his International Executive Team during 1982 and, at INC 2, the recommendation that the US board “should ratify the INC’s nomination for president” was added.22 In other words, the US board would have the power to accept or reject a nomination put forward by the selection council, which was composed largely of the most experienced members of the INC. This was welcomed.

To provide some perspective on the continuing importance of the contribution of the American Navigators, it may be helpful to lay out their share of four vital resources during the year 1980-1981. The US Navigators:

Raised 76 percent of our gift income
Sent out 72 percent of our new missionaries
Accounted for 71 percent of our staff
Raised up 51 percent of our new disciple-makers

In the early 1980s, as the time approached for Sanny to step down as our president, he and Jerry White worked with others on clarifying the way in which a future international president who would be the leader of our worldwide partnership would, both legally and in practice, interface with the responsibilities and requirements of the US board.

A careful distinction between spiritual and legal responsibilities was formulated. This was especially important because the general director was an American and thus an employee of our US corporation: Therefore, he was technically accountable to the US director and legally accountable to the US board, yet was charged with giving spiritual leadership to all the country directors in our work, including the US director.

Those selected under this evolving system of accountability up to the year 2000 were:

April 1984: Terry Taylor, US director
February 1986: Jerry White, general director
September 1997: Alan Andrews, US director

Variants of the process were used by boards in some of our other countries of ministry.

A useful paper23 by Ole-Magnus Olafsrud on “National Boards” was provided at our forum for established countries in 1987. Coming out of the context in Northern Europe, he advocated three basic entities: general assembly, board, country leader. The functions of a “general assembly” were similar to our US arrangements in the 1940s: they elected the board.

Such a “general assembly” would also

Elect a committee to propose new members of the board
Elect a chairman of the board
Review and ratify the accounting and ministry summaries annually
Give input and raise questions concerning the ministry

While this body would handle certain aspects typically carried out by the board, its members may be thought of as shareholders or stakeholders.

Olafsrud also refers to cases in which the country leader had been placed in the difficult role of being both a counselor and a friend and a decision maker. To minimize such conflicts of interest, he proposed that complex personnel matters24 should be included in the remit of the board.

In 1987, Sanny realized that he had overstepped his role as chairman of the US board. Specifically, he had placed on the agenda a progress review of US NavPress, without consulting White or Taylor. “That was a mistake,” he went on to say25 in a memo to these two men:

My role is to help the board fulfill its functions. I am not in the same relationship to the board as Jerry is to the IET [International Executive Team] or Terry to the US Leadership Team. The board does not help me make decisions, I help them make decisions.

In spite of encouragements to speak up, I do not feel free to do so. As president of the convention that founded our constitution, George Washington did not feel free to enter the debates. Over the months he contributed only twice. Once in a stage whisper, and once openly. This illustrates my feeling about my role as chairman of the board. I could participate more as a member and not chairman.

At the meeting of the board, several said that I should ‘alert the board about things coming up of a sensitive nature.’ Another said, ‘Lorne is the board when the board is not here’ and another, ‘When the board is not in session, Lorne represents the board.’ I feel that none of these are appropriate.

Jerry White summed it up best. My job as chairman is to: prepare for the board with good staff work; guide the board meetings with good thinking; minister to the board.

Relations between the International President and US Board: 1990s

Jerry White was elected chairman of our U.S. board in January 1993. He guided the board in expressing its functions:26

Regarding the US Navigators:

As required by the Colorado Nonprofit Corporation Act
As required by the Evangelical Council for Financial Accountability
As decided by the board itself

Regarding the international Navigators:

To ratify the nomination of the general director as submitted by the international council, if the nominee is from the US
To act as his home board, if the general director is from the US
To monitor the interface of the US Navigators with the general director whether or not it is the general director’s home board

In the early 1990s, the US board established oversight committees for areas where we had significant financial or legal exposure. In 1994, these were retitled advisory committees. There had been several such committees: some current examples are IET advisory, US director advisory, NavPress, development, Glen Eyrie Group.

In recent years, the US board has had three standing committees: executive, finance, nominating; each had a minimum of three members of the board.

A relational charter was then developed to describe with clarity27 the complementary nature of spiritual and legal accountabilities and, when adopted, became part of our new international procedures.

The summary28 of this charter was “to provide a broad sketch of the relational architecture of our Worldwide Partnership as we continued to pursue The Core.” After mentioning seven elements in this architecture, the summary went on to address the relationship of the international president to the US board. Thus:

Spiritual authority: The international president exercises his leadership of our worldwide partnership through relational influence and mutual commitment, His authority is covenantal rather than contractual.
Legal authority: The US board exercises legal authority over the international president because he and his Team have chosen to function within the USA. Legally, therefore, the International President is accountable to the US board. The US board uses an advisory committee to monitor the priorities and performance of the international president and his team. The international president is also spiritually accountable to his home board.
The statement of accountabilities in partnership distinguishes the spiritual and the legal accountabilities identified above . . . and makes provision for the responsibility of the US director/president to lead the US Navigators. He is accountable spiritually to the international president and legally to the US board.
The process for selection of the international president connects and balances the spiritual and legal requirements which are exercised respectively by the basic members of the international council and by the US board . . . and by his home board.

The summary also established the position of other countries in our worldwide partnership:

Neither the international president nor the US board has any legal authority over country ministries outside the USA.
Country leaders are usually accountable to their national boards and to their regional directors, especially in the absence of national boards.
The US board requires legal accountability as regards the assets of the US corporation deployed in other countries. Generally, these are receipted monies and missionary employees of the US corporation.

The US Navigators were recognized by the IRS as a Church under sections 509(a)(1) and 170 (b)(1) (A)(i) of their code in May 2005. They also qualify as a religious order.29/span>

Conclusion

By the year 2000, some forty countries had boards of directors or the equivalent, with a range of functionality from nominal to strongly accountable. Also, a European board had formed to give stronger accountability to our ministries in Europe.

In order to support and serve the chairmen of such boards, we held our first consultation for chairmen of boards at Glen Eyrie in March 2002. Subsequent consultations have taken place every few years,30 organized by the IET.

DG Elmore was elected as chairman of our US board in August 2011. During his tenure, Sanny had long argued in favor of a staff member as chairman. Therefore, DG’s appointment was a significant milestone in the history of the US board, though we have had such an arrangement in many other countries.

Note: Karla Boaz has prepared a simple timeline from Trotman’s birth in 1906 to 1997, accompanied by her annual synopses from 1955 to 1979 of the principal actions of the US board.

By Donald McGilchrist
Word Count: 4092

See also articles on:
Nationalizing
Internationalizing
Contextualizing
IHQ-USHQ Relationships
Authority and Submission
Lorne Sanny’s Role as President
Structures in the Seventies
Structures in the Early Eighties
Our Enabling Global Society
Transitioning our Navigator Presidents

Endnotes

This affidavit provides an interesting explanation by Daws of why the name The Navigators was chosen. See McGilchrist file titled H2010: boards of directors. This was our sole incorporation until the 1950s.
Recollection by Karla Boaz, February 2014.
These early bylaws are taken from an undated copy that probably originated between 1943 and 1950.
Variously, Peter Funk, H.J. Taylor, Robert Foster. Dawson Trotman was the chairman. For some years, the board attended primarily to personnel matters.
A summary of the early board history during 1943 to 1950, prepared by Karla Boaz, traces various other board appointments and resignations, and indicates that it met monthly for several years.
Much of this is drawn from the statement “Where The Navigators Stand on Boards of Directors,” as presented to the overseas directors conference in November 1966. The Navigators of Colorado was approved by the IRS as an exempt organization on December 14, 1964. See Caldwell and Toms letter of June 15, 1984, requesting that we be considered a religious order.
See conclusion 17 of the February 1961 overseas policy conference.
For many years, we customarily referred to non-Americans as “nationals.”
Source: Sanny’s annual report to staff conference, May 1964, p. 14.
Overseas directors conference June 1964, minute 11.
On several occasions, Sanny spoke against the human tendency to seek promotion, but the focus of his concern was usually the appointing of a country leader.
Much of this is drawn from the statement “Where The Navigators Stand on Boards of Directors,” as presented to the overseas directors conference in November 1966.
From the 1970s onward, other countries, whether by choice or as required by local law, established their own boards. By the year 2000, we probably had some forty boards around the world. Some were active and contributory and others existed merely on paper. It is noteworthy that no member of our International Executive Team sat on any of these boards, with the exception of Canada’s. There our Worldwide Partnership was represented for some years by Donald McGilchrist and later by Jerry White.
The financial resources mentioned flowed in large measure from the US Navigators to American missionary staff serving outside the US. In recent years, approved grants are the vehicle for such transfers.
The board, November 23, 1981. The board now had a slight majority of non-staff members.
Paper of July 9, 1981.
See Sanny/McGilchrist intent of October 1, 1981. Their thought was that the US board would be dissolved and the new board would be called The Navigators International…and that the name “The Navigators” or equivalent would be registered in all appropriate countries.
The documents underlying the above summary can most easily be found in the agenda papers for the December 1981 INC. At that time, we did not have a general counsel. McGilchrist to Robb of November 11, 1981. John Robb had suggested consulting Philip Hull, a partner in the New York firm of Winthrop, Stimson, Puttenham and Roberts who had rich experience in the structuring of international non-profits and had been editor of the Columbia Law Review. He had a conference call with Robb, Sanny, McGilchrist on October 30, 1981 (see Precis).
McGilchrist had also looked at the “Harvard Model” of two boards: the corporation and the overseers.
As was noted, there was at least a degree of precedent for such a council in the Jerusalem council of Acts 15.
INC 1, papers on structure.
INC 2, minute 3.6.
Pages 138-140 of the preliminary materials, written in July 1986.
It will be recalled that, in our early years, the US board similarly attended to personnel matters.
Memo of August 28, 1987 to White and Taylor.
Source: summary of functions dated July 1995.
For further clarity, this summary should be read in the context of six documents to which it refers including, for example, the “Process for the Selection of the International President.”
Quoting from version of March 10, 2004 in papers for our international council, 2004.
See “A Study on our Status As a Religious Order,” submitted to the IRS with Caldwell & Toms of June 15, 1984. See also Jerry Bridges’ memo to the USLT of May 14, 1986 on how to conceptualize a vow of poverty.
March 2005; April 2008; February 2012; February 2016.