Opinion ID: 4565245
Heading Depth: 3
Heading Rank: 1

Heading: ANTHC’s Executive Committee

Text: In November 2014, the chair and president of ANTHC’s Board of Directors, Andy Teuber, sent an email to the Board stating that it would consider certain amendments to the Bylaws at the Board’s meeting in December 2014. At the meeting, the Board—by a thirteen-to-two vote and over the objection of SCF’s representative on the Board— adopted an amendment proposed by Teuber that resulted in the creation of a five-member “Executive Committee” of the Board. The Executive Committee was to be comprised of the Chair of the Board, and two or more additional Directors appointed by the Chair. The Executive Committee was authorized to “exercise the authority of the Board of Directors in the management of the Consortium,” subject to SOUTHCENTRAL FOUNDATION V. ANTHC 7 a few narrow exceptions. Importantly, actions taken by the newly created Executive Committee were not subject to ratification by the full Board. Furthermore, the Executive Committee’s authority was not limited to acting between Board meetings or in emergency situations. At the December 2014 meeting, Teuber also proposed an evaluation of the compensation paid to the Directors, which included the development of a plan to increase their compensation retroactive to incorporation, despite the fact that between 1999 and 2011 the Articles of Incorporation did not permit Directors to receive compensation for their service on the Board. Notably, this proposal followed a settlement between ANTHC and IHS in June 2014, wherein IHS provided ANTHC a one-time payment of $153 million because of failures to pay certain contract obligations. Shortly thereafter, the Executive Committee met for the first time. Neither SCF’s primary Director, nor its alternate, were members of the Executive Committee. The Executive Committee approved lucrative employment contracts for two senior executives of ANTHC—Teuber and CEO Roald Helgesen. Notably, Teuber’s base salary increased from $110,000 to $730,000. Meanwhile, SCF’s designated Director was not informed that the Executive Committee had even met until Teuber summarized the results of the meeting in an email in February 2015. Although the email disclosed the execution of new contracts for Teuber and Helgesen, it did not disclose the terms of the contracts, including the compensation amount. Then, in April 2015, the Board held a special meeting during which it ratified the actions taken by the Executive Committee in December 2014. According to SCF, by this 8 SOUTHCENTRAL FOUNDATION V. ANTHC time Teuber’s and Helgesen’s new contracts had already been signed. Approximately two years later, in April 2017, the Board amended the Bylaws to clarify that, moving forward, the Executive Committee could convene only between meetings of the Board and that “all actions of the Executive Committee must be ratified and approved by a vote of the Board of Directors . . . in order to be effective.”