The Events on 1984
In mid-1984, the SUB Board of Directors appeared to be having some difficulty in re-negotiating the leases with the SUB's commercial tenants, causing the president of the Board of Directors to bring the issue to the attention of the Board of Governors. Of great concern was the overlapping of memberships on the various boards responsible for the operations of the SUB. This overlap occurred within the memberships of the Board of Directors, SUB Holdings, Inc., Campus Services Ltd., and the Senate.
Also of concern was the potential conflict of interest posed by Campus Services LTD's expressed interest in operating a convenience store. The Board of Governors felt it to be inappropriate for members of the SUB Board of Directors to be evaluating the leases of the commercial tenants and the commercial tenant's competitor, CSL, while at the same time being directors for the CSL.
As a result, on March 22, the Board of Governors moved to make it mandatory that all decisions pertaining to SUB commercial leasing would first have to be approved by it's Finance Committee, acting on behalf of the Board of Governors. The Board of Governors authorized a review into the operations of the SUB and the compositions of both the Board of Directors and SUB Holdings in this same meeting. In anticipation of this review the Board of Governors expanded commercial leases due to expire on July 31, 1984, until July 31, 1985. This action was also taken to remedy the increasing concern among commercial tenants resulting from the difficulty that the Board of Directors appeared to be having with the re-negotiation of leases.
A member of the Judiciary Board was present in the May 3, 1984 meeting of the Board of Directors as a part of the review approved by the Board of Governors. The deteriorating relations between the Board of Directors and the administration were clearly demonstrated in this meeting. Members of the Board began to question the representative from the Judiciary Board's presence at the meeting. Bosnitch spoke out in anger about the failure of the Board of Governors to inform the Board of Directors of meetings concerning the operations of the SUB, and stated that the Board of Directors should receive, in advance, submissions from the tenants of the SUB.
Bosnitch was also quite vocal with regards to that he felt to be the negligence on the behalf of the Director of the SUB and the Lawyer in failing to inform the Board of the renewal clause in the Smoke Shoppe lease. Bosnitch expressed his desire for the Board of governors to publicly, via a motion, take responsibility for and to condemn, the actions of the Director and the Lawyer.
Due to increasing concern over the management and operations of the SUB, the President of the university, James Downey, requested that Robert Shaw assess the operations of the SUB Board. This report was completed and submitted to Downey on July 25, 1984. The results of what has come to be known as The Shaw Report, concluded that the management of the SUB was in disarray.
Part of Shaw's review of the Board of Directors consisted of interviews with the Board. In this group interview, members of the Board made their distaste for both the internal review and the way that the administration went about implementing this review, well known.
When the Board was asked if they agreed that the Board of Directors was in trouble and requiring the delegation of a mediator to help to remedy the situation, the response was that there had been no fault on the part of the SUB Board. It was then furthered that the perceived problems being experienced in the SUB management had come about as a result of unauthorized and ignorant meddling by the Board of Governors in the affairs of the SUB.
When asked what they would change relative to the Board of Directors, the Board stated that the Board of Governors had never changed and that even the addition of students was pure tokenism. From here, the Board explained that in order for any progress to be achieved, the SUB Board should extract jurisdiction from the Board of Governors.
When Shaw posed questions concerning the conflict that was posed by the appointment of the Chairman and President of the SRC to the SUB Board of Directors, SUB Holdings Ltd., and Campus Services Limited, fingers were pointed at the President of the university. The defense was that the President's membership on the Board of Governors shared the same conflict as that of the chairman of the SUB Board, and therefore not an issue.
Based on the conclusions from the interview with the Board of Directors and the review of its operation, Shaw recommended that the President advise the Board that the university believed that the Boards management was in disarray, and that the university administration would "take prompt and vigorous action to advise and assist if so requested by the students of UNB or their representatives." He also recommended that the Board of Governors issue a warning that the Board of Governors does not and will not approve changes to the Constitution and By-Laws that had been made by the Board of Directors, until they were approved by the Board of Governors through due process.
Also included in Shaw's recommendations was the condemnation of the "concentration of power in so few hands" of the SRC, SUB Board and SUB Holdings Inc., and Campus Services Limited. He emphasized that the cross-memberships posed a conflict of interest and had circumvented the spirit of the Constitution.
The Board of Governors approved the Shaw Report. The Board also agreed that it would be in their best interest to consult with the university's legal council in order to protect UNB from any legal actions that could be taken as a result of improper actions of the SUB Board of Directors, or any of it's members.
This concern was particularly geared toward the sale of food items at the CSL Exchange, which, according to both the presidents of UNB and Beaver Foods, had breached the Beaver Foods contract with the university. The Vice President of Finance and Administration had written a letter to the Board of Directors expressing his discontent with the sale of snack foods at the CSL Exchange. He had asked that it be closed until the Board of Governors could meet and render a decision with regards to this issue. The Board of Directors decided that they would first decide the future of the sale of snack foods, and then reply to the letter stating the Boards decision.
This was a serious issue with the university because of the fact that Beaver Foods had contributed a great deal to the university in the form of extensive renovations. These donations were in appreciation for their exclusive contract with the university. Beaver foods also paid a percentage of its cash sales from both the SUB cafeteria and its vending machines. This income from Beaver Foods had then been passed on to the Board of Directors for building operations.
Relations between the SUB Boards and the executive deteriorated in September of that year. Since June 18th of 1984, the Student Union Building Board had ignored the VP Finance and Administration's request to terminate the sale of food items in the CSL as they believed was in violation of Beaver Foods contract with the university.
On September 5th, the Senior VP of Beaver Foods Ltd. Had advised the VP Finance and Administration that they had considered these food sales to be a breach of their contract and demanded "immediate attention to this matter". Even though the chairman of the SUB Board (Bosnitch) was repeatedly warned of this breach of contract, these unauthorized food sales continued regardless.
On September 26th, according to James Downey the President of the University, five members of the SUB Board of Director's wrote him a letter stating that they believed that the Board was no longer functional. They asked the university to take whatever steps it may deem necessary and prudent to protect the existing facilities, operations and services of the SUB for it's users, employees, and tenants.
In response to these concerns, the actions that Downey had deemed necessary were to take over the operations of the SUB. On September 28th, the president of the university took action to appoint temporary trustees to take over and exercise the powers and responsibilities formerly assigned to the Board of Directors and it's subsidiary, SUB Holdings, Inc.
The result was the appointment of the Board of Trustees by Downey. This group was composed of two past members of the Board of Directors and four students (three from UNB and one from STU). The appointment of the Trustees caused anger within the student body and the Student Union. The main cause for alarm was best described by a UNB student in an interview with The Daily Gleaner, [t]he equivalent [to such an action] would be a group of Members of Parliament meeting secretly to form a new federal government and pick a new Prime Minister. Many of the students felt betrayed by their university, and let down by their Student Union.
Adding to the general distrust of the administration's takeover was a comment that was quoted in The Daily Gleaner from Suzanne Currie, who had been appointed as a member of the new Board of Trustees. She stated that she was not big on rights of students. Students should be listened to by the administration. Their opinion is valuable to the university but they do not have the right to be heard. This philosophy that the students should be seen and not heard did not sit well with the students of UNB. In response, and in defense of this statement, the university administration claimed that they felt that Currie had been misquoted and that what they believed that she had been trying to say was that students should not appropriate rights.
The Board of Trustees began their task of adjusting to the newly restructured management of the SUB. Their primary responsibility was to decide how to run the SUB. To the discomfort of students and media, this was done behind closed doors. Students were barred from the meeting rooms, and the minutes from the meetings were not released. In addition, the new Board did not make their policy of operations available. Students had no idea, nor any say in what was happening in and to their building.
One of the first tasks undertaken by the new Board of Trustees was to hire the auditors of Touche Ross and Co. to determine the financial position for the SUB operations from June 30, to September 28 of 1984.
The details of the auditor's report confirmed the Board of Governors assessment that the management of the SUB was in disarray. Of particular concerns to both the administration and the auditors was the 00.00 in unsecured cash in the directors' office, approximately 00.00 worth of unprepared billings for bar services rendered, as well as questionable bookkeeping and operation that suggested an ignorance of accounting practices.
The Board of Governors authorized the Board of Trustees to acquire and operate any accounts, credits, or cash on hand that belonged to the SUB Board of Directors or SUB Holdings, Inc. in a meeting held on October 18, 1984. It was also at this same meeting that the actions of Downey in the removal of the SUB Board and the appointment of the Board of Trustees were ratified.
Then, at its November 29, 1984 meeting, the Board of Governors agreed "that the President [should] establish a committee to consider and recommend to the Board of Governors on how the Student Union Building Board of Directors and its constitution should be restructured to ensure more effective and accountable administration of the Student Union Building." It was decided that the most effective and appropriate means of doing this would be to gather and assess information from other universities in Canada concerning how their Student Union buildings are administered.
The committee obtained these reports from several Canadian universities (Dalhousie, Carlton, McGill, Memorial, Mount Alison, and Queens) concerning the operations of their Student Union buildings, and discovered that the administration of this type of facility is highly variable from university to university. The committee concluded that no single model would adequately apply to UNB, or to Canadian universities in general. As such, the committee agreed that it was their responsibility to exercise their own judgment and propose a revised structure that they felt would be the most appropriate to meet the present and future needs of the students of UNB.
It was outlined that this committee was to ensure the provision of the opportunity for input into the committees deliberations by groups of the university community who had a vested interest in the operation and administration of the SUB. The most important issue requiring attention was with regards to the authority and accountability of the SUB Board members, as well as the relations between the SUB Board and the Board of Governors.
Upon the establishment of this committee, the President of the university respectfully submitted written guidelines to the committee for the establishment of a new management structure for the SUB. These guidelines were intended to remedy what the President felt to be the main antecedent allowing the incidents of 1983-84 to arise; this antecedent being the failure of the Board of Governors to clearly define its responsibilities. This lack of definition of responsibility resulted in confusion and frustration for both students and Board members.
One concern outlined in the guidelines provided by President Downey was with regards to the financial involvement the university has played, and continues to play in the operation of the SUB. In addition to remaining responsible for paying for the full operating costs of building services and maintenance, the Board of Governors also bears the legal responsibility for all activities carried out in the building. Even though the Board of Directors were responsible for the management of the SUB, the Board of Governors maintained legal responsibility. The appointment of the Board of the Trustees had come about as a result of mounting financial and legal problems that were being experienced with the operations of the 1983-84 Board of Directors. This was an issue that Downey had outlined as being a primary consideration in the establishment of the new management structure for the Student Union Building.
Downey had also made it clear that because the SUB had been constructed for, and is operated to service the needs of UNB and STU students, there must be an effective means for taking students interests into account when deciding the day-to-day operations and long-term planning of the SUB. As such, he made it clear that the new Board should have a student majority. It was under these guidelines that the President proposed to the committee that the university be directly responsible "for the management, financial and other, operations of the SUB." The end result of this committee's deliberations was the management structure of the SUB as it remains today.
The approval of the new administrative structure of the SUB, and the composition and terms of reference of the new SUB Board were recommended and approved in the report of the committee in the January 25, 1985 Board of Governors meeting. The trustees were directed to "proceed with an orderly conclusion of their activities, to be completed no later than February 14, 1985." The Board of Trustees were also directed to "transfer and assign the University of New Brunswick all bank accounts, credit, cash on hand, and any other assets by February 14, 1985." These monies were to be used by the university "solely for the acquisition of furnishings, renovations, or other improvements of the SUB." It was also during this same meeting that the President was authorized by the Board of Governors to appoint a committee to review the operations of the new administrative structure for the SUB.
Also at the November 29, 1984 Board of Governors meeting, the continuing issue of the sale of food items at the CSL Exchange was discussed at length. In a motion proposed by Downey and Bliss, it was suggested that CSL be directed to limit it's sales to items that had been specifically authorized by the university. These authorized items included books/texts, paper, stationary, writing materials, student publications, ID cards, event tickets, equipment rentals, and photocopy services. The approval for the continued commercial operations of the CSL Exchange was conditional on the discontinuing of the sale of food items. The failure to comply by 5:00 on Friday, December 7, 1984, would warrant it's closing as well as authorize the Board of Trustees to obtain proposals for the use of the space occupied by CSL.
Mr. Lethbridge warned the Board of Governors that this recommendation would effectively close down the student store because of the fact that 60 to 90% of its sales were food items. When the store had first opened, it had only sold the above outlined item, but it had ended up losing money. This was problematic because, as described President Downey, the CSL Exchange was a privately incorporated company that had been established by the UNB Student Union in order to alternatively fund student activities. It was stressed that the loss of this income would result in the reduction of student services and activities on campus.
Mr. Lethbridge also argued that the CSL Exchange did not provide any services that were provided elsewhere on campus by other operations, and that he therefore disagreed that it was in breech of Beaver Foods contract. As such, he requested that food sales not be cut off completely, and asked the Board of Governors to allow for negotiation. The President explained that the Board had hoped for negotiation, however, the "CSL attitude [had been] one of defiance." Downey also made it clear that the Board of Directors had not replied to any of their letters warning them of the possibility of these actions, and that this lack of acknowledgment had been perceived as acts of defiance.
This motion proposed by Downey and Bliss was carried with only two in opposition.
The events that took place in the mid-eighties with regards to the SUB undeniably necessitated action from the administration of the university. This is not to suggest that all actions taken by the administration and President Downey were all governed in such a way deserving of praise. The main point of emphasis is that the events that unfolded in 1985 came about as a result of a lack of communication between both parties, and the deterioration of a mutually respective relationship.
