Institutional Memory

At the last Culver Town Council meeting, Greg Hildebrand, President of the Marshall County Economic Development Corporation (MCEDC), made a presentation on 2024’s accomplishments and some overall accomplishments through the last several years. Culver’s representative to the MCEDC board turned in his resignation that night as well. Greg told the board he was researching their question about public officials as MCEDC representatives.

As Culver’s first MCEDC representative and as such, a founding member of the MCEDC Board, I found the question surprising. But then I checked the MCEDC website and there is only one board member still there from the early days. Greg is the 6th person in the staff leadership role, so he has no knowledge of the start-up.

Every institution, whether public or private, must evolve. Unfortunately though, when institutional memory is lost, that evolution can involve back-tracking, repetitive spending, and potential repeating mistakes. In the case of MCEDC, the original representatives met for nearly a year before actually forming the corporation and hiring staff. We met with multiple existing Local Economic Development Organizations (LEDOs), which were set up with various structures in order to try and determine what was best. These ranged from local government departments to quasi-government /private partnerships to independent private corporations. We met with site selectors to determine with which form they preferred to work. We met with the State economic development arm, to get their take on what was most effective. Once we determined that the private corporation structure was most flexible and preferable, we researched various corporate forms before deciding on becoming a 501c(6) corporation. Then we hired Ice Miller, one of Indiana’s leading law firms in the area of economic development to help craft our by-laws. Three key take-aways from this:

• Many site selectors and companies considering a move do not want it public until a decision is made. If the LEDO is a government department or has government representatives on the board, there is a concern about required disclosures that make the potential new business squeamish. For this reason, MCEDC prohibited public officials from holding board positions.
• A public funded LEDO has more strings attached due to direct tax payments covering costs. MCEDC was set up with service contracts to the various government bodies, so that the services are provided on a consulting basis. This has allowed funding by local Redevelopment Commissions. (It has also caused a few problems regarding flexibility due to government bodies specifying deliverables… not something included in the original contracts.)
• 501c(6) status makes the corporation a tax exempt entity, but with different abilities and restrictions. This allows contributions from private corporations and individuals to be tax deductible. One other key benefit is a 501c(6) is allowed to lobby government representatives.

The decisions made and the reasons for making them were lost with the retirement of the original board members.

The loss of Institutional Memory has been demonstrated to me in the past from other boards on which I have served too. A new board member has a “new idea” or one they’ve used elsewhere. Institutional Memory could demonstrate how something similar was tried in the past with the associated success or failure. That doesn’t mean the idea may not be worthy of implementation or in the case of past failure, trying again, but maybe it can be improved by past experience or there may be unique reasons why it didn’t work in the past. It could even have left a bad taste in the mouth of donors/supporters and that alone is a reason to avoid it. Board turnover may prevent that experience from moving forward. Sometimes with strong-willed, long-serving staff leadership, the Board gets overshadowed, deferring to staff leadership when staff leadership’s tenure exceeds that of any board member. The Staff becomes the Institutional Memory for better or worse…

I don’t have a great solution for this. Board minutes would be the first line of defense, but there is a wide variety in the way organizations keep minutes, ranging from the bare minimum required by Robert’s Rules, to copious detail on every side conversation. Each has its uses and there are differing schools of thought on which is appropriate for different organizations. Minutes rarely catch everything though.

So here are a few suggestions from my experience on multiple boards:

1. Minutes should be digitized and searchable. They should be easily available to current board members as a reference. They should be searchable by dates, names and key words. (When I was Secretary of the MCEDC Board, I kept a running to-do list of board decisions that I included at the bottom of the minutes and updated it monthly with new things directed by the board and removing things that were completed in the last month. The Executive Director hated that, but it was useful for accountability.)
2. Along with board minutes, institutional history should be kept. This can be in a narrative form, added to monthly and included in total, attached to the first meeting of the year’s minutes covering the previous year. This should include successes and failures, in enough detail for a new board member to easily understand what happened. This should also be easily available to current board members in a searchable form.
3. Board members should be encouraged to provide a summary of their time on the board with the associated highlights and missed opportunities. What stands out when looking backwards can often provide insights and direction for what comes next. This should also be easily available to current board members in a searchable form.
4. Paid staff should be encouraged to provide their input since they are the day-to-day face of the board and have invaluable insight into what is happening. That said, they should be reminded when necessary that they are not board members, do not have a vote, and are charged with carrying out the board’s directives. (Most of those I have worked with understand this and use their influence judiciously, but I have worked with some that abuse this or balk at taking direction from the board when it doesn’t go their way. They and the board must understand that if this happens too much, it is time for a parting of the ways…)
5. The searchable sources under 1 through 3, should be consulted anytime there is a new project, staffing change, board reorganization or other activity that could be positively influenced by what came before… This should be a staff function, but should also be considered by anyone suggesting something new or a change in direction. Learning from the past is invaluable.

I believe strongly in refreshing boards and the regular influx of new blood. I think term limits are a reasonable approach to allowing board members a way out as well as a way to encourage new blood, even though this is at the expense of Institutional Memory. But that doesn’t change the fact that the loss of Institutional Memory causes mistakes to be repeated, costs to be repeated and some people to be re-offended. There is a balance for which we should strive, else like MCEDC above, we lose the benefit of the work done in the past.

“Those who cannot remember the past are condemned to repeat it.” – George Santayana, The Life of Reason, 1905