# LCMS Convention Workbook_St. Louis Missouri_1998_S99 # Machine transcription, uncorrected — CHI Digital Archive (demonstration) SYNODICAL REPORTS 99 * Clarification of provisions relating to indemnification of direc- tors and officers, especially as these relate to Districts. Establishment of an information center using the latest technol- ogy to allow for inquiry through the Internet and providing in- formation through it. Approval of personnel policy changes, including modification of the policy for appointing and employing staff in addition to salary ranges and the positions included in each classification. Proposed realignment of the responsibilities of the Chief Ad- ministrative Officer and Chief Financial Officer. Review of the Articles of Incorporation and Bylaws of Lutheran Church Extension Fund, The Lutheran Church—Missouri Synod Foundation, and Concordia University System, as well as amend- ments to the CUS, Foundation, and LCEF Bylaws. * Received in-depth reports at meetings from the Board for Mis- sion Services, Board for Black Ministry, Board for Communica- tion Services, Board for Human Care, Commission on Worship, and Board for Higher Education and its development of CUENet, an interactive video approach, now available for use by units other than higher education, with units on campuses, high schools, and other locations throughout the Synod. ¢ Authorized an additional staff position in the area of Worship and urged that a member of a minority group be considered for filling it. Monitored the recommendations and reports of the President’s Blue Ribbon committee on Structure, providing input to the com- mittee by means of written communication and in a joint meeting with the committee. The Board agrees with nearly all of the com- mittee recommendations and expresses the hope that the report will be adopted. It will, however, be submitting some overtures dealing with certain areas of concern which it is asking the floor committee to address. These are contained in another section of the Convention Workbook. III. Fiscal Matters The Bylaws clearly identify the Board of Directors as the group responsible for fiscal matters affecting the Synod. As a part of car- rying out that responsibility, the Board received regular reports from the Director of Internal Audit and appointed the firm of Emst and Young as external auditors, recommending that they also be engaged by the other corporate entities associated with the corpo- rate Synod. The Audit Committee of the Board also reviewed audit reports of the various Synodwide corporations and trust entities, as well as those for colleges, universities, seminaries, and Districts. The Board, through its Audit Committee, is assured that policies of the Financial Accounting Standards Board are followed. Partic- ular concern was taken to assure that FAS 116 and 117 were fol- lowed. This resulted in a changed format for the Synod’s financial statements to conform to the new policies. In its financial reporting, the Board provides detailed reports of the assets, liabilities, revenues, and expenses over which it has con- . trol. It also, in its reports, includes a financial report in summary form of the activities of the corporate and trust entities of the Synod, including Concordia Publishing House, Lutheran Church Extension Fund, The Lutheran Church—Missouri Synod Founda- tion, Concordia Historical Institute, Concordia University System, and Worker Benefit Plans. Attention is given to the funds provided by various foundations which flow to units such as missions and higher education through the corporate Synod. The Board has approved the application of certain undesignated funds from LCEF, net assets from operating income that nets an- nually above $1,500,000, net assets from annual bequests above $800,000, and net interest income to the capital indebtedness for which the Synod is responsible at higher education institutions. In the course of its work the Board approved balanced budgets on an annual basis, as well as budgets for the Great Commission Convocation and the 1998 synodical convention. Recently it re- sumed responsibility for the LCMS ministries unit in the area of development, a responsibility which had previously been desig- nated as that of the LCMS Foundation. IV. Legal Matters A number of legal matters require official action of the Board of Directors. One of these is the registration of foreign corporations where the Synod is involved in mission work. Such corporations were registered in Jamaica, Moscow, and Kazakstan. In addition, the establishment of corporations was approved, relating to efforts to establish a school in Shanghai similar to the Synod’s Hong Kong International School for expatriates. Approval was also given to participate in the establishment of a corporation known as Lutheran Services in America, a corporation involving social ministry orga- nizations which are Recognized Service Organizations. The corpo- ration was established in cooperation with representatives of 280 social ministry organizations and the ELCA, which also has similar social ministry organizations to which it relates. During the past triennium the Board has closely followed two lawsuits which were filed against the Synod or organizations re- lated to it. These involved the NAACP/FCC vs. KFUO, in which efforts were made to have the station license revoked on the basis of discrimination and a class action suit brought in the state of Texas against charitable organizations, alleging improper estab- lishment of interest rates on the basis of recommendation by an or- ganization suggesting rates which would be appropriate for pay- ment on funds held in trust, with the remainder at the death of the donor being a gift to a charitable organization. Issues relating to both of these matters are nearing final resolution favorable to the radio station and the Foundation. V. Facilities and Property Matters As a result of growth in the areas of Missions, LCEF, the Foun- dation, and Accounting, a space needs study was initiated early in the triennium. As a result of that study, it was determined that ad- ditional space was needed either through the construction of addi- tions to the International Center at 1333 South Kirkwood or through the rental or purchase of other facilities. A decision was made to purchase facilities and as a result, a building near the In- ternational Center (IC) was purchased by LCEF and the Founda- tion, with corporate Synod purchasing the quarter interest in the IC owned by LCEF. The transaction was endorsed by the Board of Di- rectors. The Board also approved a “Joint Building and Ownership Operations” agreement providing for common management and general services for both buildings. At its meetings, the Board received regular reports from the Chief Financial Officer regarding the sale of excess property at Concordia University, Irvine. The sale, which has produced re- ceipts to date in excess of $27 million, has now been completed. with the result that synodical indebtedness in the construction of the campus has largely been eliminated and start-up costs have been liquidated. The blessing hand of the Lord in this entire effort has been most evident. Other actions of the Board relating to property and facilities in- clude the following: ¢ Development of properties in Hong Kong on a Crown lease be- longing to the Synod. * The delegation of Board of Directors’ responsibilities for college and university properties to Concordia University System, as well as transfer of education assets and liabilities to it while re- taining oversight responsibilities. * Concurrence with the decision to allow St. Paul’s Lutheran High School, Concordia MO, to become a Recognized Service Orga- nization. * Agreement to transfer a low-income housing fund to LCEF, which has provided loan funds for such housing. VI. Policies The Board of Directors devoted considerable time to the matter of developing policies or relating to others who would develop policies or policy proposals affecting the Synod. One of the major achievements was the completion and adoption of a policy manual which reflects a policy-based leadership style. The adoption of this type of leadership has made it possible to free up Board time for “big picture” items addressing the future. .