Issue No. 18 June 5, 2006 This edition of Realignment News will ...

Issue No. 18 June 5, 2006This edition of Realignment News will focus on Early Adopters. It includes a report ontheir recently completed training and some of their questions. The next issue willprovide general information on the mapping proposals that have been submitted bycouncils, as well as a reminder of next steps following completion of the work of theMapping Task Force.Report on Early Adopter TrainingBoard Chairs and CEOs from 10 Early Adopter Council Groups met in Virginia Beachfrom May 19-21 to learn more about realignment and to become familiar with the toolsand supports that are available from GSUSA. The meeting included sessions on:Organizing the Work of the Council Realignment Committee, Understanding the LegalAspects of Realignment, Governance Structures, Staff Structures, Employee Transitions,CEO Search, Integrating Functional Areas, Building the New Board, Money-Assets-Banking, Getting the “Membership Vote,” and How to Approach Information andTechnology. National Staff and NOVs participated along with council teams, creating acohort of more than 100.Highlights of the meeting included:• A presentation from our pro-bono legal team at Gibson, Dunn & Crutcher thatcovered the legal steps councils will go through during the realignment process,as well as a complete definition of how Gibson, Dunn can help.• A step-by-step review of the work of the Council Realignment Committee thatclarified what needs to be done now, and what can wait until after the mergertakes place. Many participants were relieved to learn that much of the work theythought belonged with the CRC will be the responsibility of the new council.• The introduction of a new description of High Capacity to help guide councilsthrough their building process. (See following article.)• A session on governance that provided a first glimpse of some new governancemodels that will be available for councils.As realignment unfolds throughout the country, meetings like the one in Virginia Beachwill be held on a regional basis to support all councils as they begin this critical process.

PAGE 2Working with Gibson, Dunn & CrutcherThe following article was taken from the PowerPoint developed and delivered by Gibson,Dunn at Early Adopter Training.Gibson, Dunn has been engaged on a pro bono basis by GSUSA as its special legaladvisor for realignment. In that role, Gibson Dunn will help GSUSA and councilsaddress issues that are national in scope.Working with GSUSA, the firm will develop general policies relating to realignment aswell as written materials that can be adapted by all councils, such as template agreements,checklists, and training materials. They will also set up and maintain an extranet that willbe open to all councils. It will contain resources and FAQs about realignment.If councils wish to engage Gibson, Dunn on a pro bono basis, all councils in the merginggroup must agree. For example, if four councils are merging, all four must engageGibson, Dunn. Gibson, Dunn will be impartial, providing advice to the group as a whole,not serving as an advocate for any individual council or councils in the group.Services provided by Gibson, Dunn can include advising on state law related to mergers,drafter merger agreements and merger filings that will be required; providing advice froma legal prospective regarding required board and member approvals; and review ofcontracts for possible third-party approvals.If a group of merging councils decides to engage the firm, a Gibson, Dunn attorney willbe assigned as the contact for each council the group.The services of Gibson, Dunn are pro bono; however council groups will be asked tocover any out of pocket expenses incurred by the firm on their behalf. For example, ifyou feel an attorney from Gibson, Dunn needs to be present for your final vote; thecouncil group will need to pay for her or his travel costs.What is a High-Capacity Council?Closing remarks at the Early Adopters Training introduced a new definition of High-Capacity Councils drawn from current research on high-capacity organizations by a teamof GSUSA staff. This definition might be helpful to councils as they begin to developtheir “vision” of the new councils that will be formed.

PAGE 3A High-Capacity Council is one that….• has leadership that inspires, prioritizes, makes decisions, provides direction, andinnovates, all in an effort to achieve the organization’s aspirations.• is adaptive and exhibits a high degree of flexibility.• exhibits seamless integration and coordination of effort among departments,programs, and services.• Has the ability to design and implement superior organizational functions thatmaximize services for its members and constituents.High-capacity councils are grounded in a culture of beliefs that clearly support the overallpurpose of the organization and are harnessed in a way that produces high impact.Interesting Tidbits from Early Adopter TrainingHere are a few quick facts we picked up at EA training and thought we would pass on toyou:• The first of the Early Adopter Council groups is projecting January ’07 for itsfinal vote.• The extranet of legal information that will be run by our friends at Gibson, Dunnis due to go live by July 1. Access information will be provided to all councilsprior to that date.• Nine of the ten Early Adopter groups have signed up to use the pro bono servicesthat will be provided by Gibson, Dunn. The other council has made localarrangements for pro bono services.• GSUSA is recommending that as part of the realignment process, all new councilgroups select October 1–September 30 as their new fiscal year. (It is interestingto note that of the 10 new council groups that are being formed, only one grouphas councils that all use the same fiscal year).

PAGE 41. We have looked at our jurisdiction and have great plans to open several newoffices in central locations but already have existing offices in other locations.What do you suggest? Answer: We expect that the answer to the office spacequestion will be “evolutionary.” Owned offices and existing office leases willmost likely be the starting point for the new council. The new council will makeother office location decisions as it moves forward.2. Can you tell me where the work of the CRC stops and the work of the newcouncil begins? Answer: It was helpful at Early Adopter Training to comparebuilding the new council to construction of a new house. It is the job of the CRCto design the house, put in the foundation, and do the framing work. It is the jobof the newly formed council to select all interior elements and do all of the finishwork.3. Where does the selection of the CEO fit in? Answer: Ideally, the SearchCommittee will complete its work before the final vote is taken. This will enablethe new CEO to begin work with the new board of directors the moment they areelected.4. We would like to have our immediate past Board Chair (rather than thecurrent Board Chair) serve as our key representative to the CouncilRealignment Committee. Is that OK? Answer: Absolutely. Some councilshave found that the Past Board Chair has more time available to support theprocess. However, the new Board Chair should be part of the team that attends theCouncil Realignment Committee meetings and is an integral part of the process.5. Our final merger vote is scheduled for June — and we have our AnnualMeeting in April and all of our Officer Terms expire at that time, along withone third of our Board. Will we need to elect new Officers and BoardMembers for three-month terms? Answer: No. However, a vote of councildelegates will be required to extend all terms until final action is taken on the newcouncil realignment.