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HIVE EXCLUSIVE: Is VSDA Veering Off in a New Direction?

7 May, 2001 By: Joan Villa

The Video Software Dealers Association may veer off in a distinctly new direction as a result of board action and a subsequent strategy session in Chicago last weekend.

The board voted to eliminate the two-thirds majority requirement necessary to change the association’s bylaws and instead require a simple majority of 10 directors to amend the charter. According to board chairman Tom Warren, the move gives more power to the 10 elected directors, who are usually independent specialty retailers, over the eight appointed members who represent large chains and distributors.

“We often say the members run this association by who they elect, but in effect they couldn’t change the bylaws without the appointed members agreeing to it,” says Warren. While Warren says most votes do not split neatly along simple appointed-versus-elected lines, the bylaw change will “remove that perception” that elected directors are unable to affect real change.

Some elected directors feel the move will have exactly the opposite effect, however. Since a handful of elected members consistently vote with the appointed view of the VSDA as a “big tent” capable of representing the entire industry rather than focusing on benefits for independent retailers, the bylaw change effectively creates a voting “block” that will favor appointed directors, they say.

“We’re in a position now that makes it easier for any faction, based on their mood of the day, to manipulate the bylaws back and forth,” worries one independent member. “There’s a reason why” most organizations require a two-thirds vote to change the charter and “that’s because the bylaws really shouldn’t be in a position to be changed on a whim.”

Independent retailer Ross Flint introduced the change in a two-part motion that would also have repealed controversial “Article 9,” which prohibits association funds from being used in legal action against a VSDA member. But the motion was split into two votes and the bylaw change was passed while the Article 9 repeal was defeated.

One appointed member says the bylaw vote was presented at the meeting as giving elected members the ability to more closely align the VSDA’s charter with their views, and he voted for it because on the surface it “seemed to make sense.”

But comments made by appointed directors following the vote made it clear that they may flex their muscle in future meetings to change bylaws such as the one requiring a two-thirds vote to appoint new directors. For example, also at the April 27 Chicago meeting, a candidate proposed to represent the adult industry narrowly lost a two-thirds vote for an appointed seat—a tally which would produce a different outcome under the new bylaw. Being able to change bylaws with a simple majority “won’t take long to manifest into action,” predicts one independent director. “I expect after the next meeting,” the two-thirds requirement for an appointed seat “will not be in place any longer.”

In a strategic planning session the next day, some directors representing large chains suggested that the association shift its emphasis away from independent retailers, whose memberships have declined more than 50% in the last three years to approximately 1,200 storefronts, in order to represent the chains’ presence “proportionately.”

Warren says the session was an initial step toward allowing the VSDA to redefine itself and fashion a new mission statement, but no official conclusions were reached. A small board member task force will have a final report to present at the next board meeting in Orlando in July.

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