SMFT Press Conference Atlanta, GA June 24, 2012 AGENDA Welcome Developments since last year’s press conference Board Practices and Conflicts of Interest Report on SMFT SHRM Surveys Where do we go from here?

Developments since last year’s press conference In 2011, after almost one year of refusing to meet, the Board finally agrees – only hours prior to our first press conference. Subsequently adds “Past Chairs only” requirement – Disqualifies two thirds of our Steering Committee. No meeting until October – 105 days delay. Meeting goes well for us. Three months later, the second promised meeting canceled by Berrios. SMFT appeals. Second meeting not until March 4. (another 152 days) The Board refused to alter its position on key issues.

Board Ethics and Conflicts of Interest Kate Herbst, SPHR A serious perceived conflict of interest occurred when a SHRM’s member’s official complaint regarding the Board’s compensation decision was rejected by the complaint procedure’s Review Committee, which is comprised solely of Board members. Thus, the current process allows the Board to exonerate itself of any wrong-doing alleged in potential member complaints. This raises an important question about the need to revise the Member Discipline Process to appropriately handle potential complaints against Board members. We are aware of no such revision to date.

SMFT - SHRM Leadership & Grassroots Surveys: Results June 2012 Reported June 24, 2012 SMFT Press Conference Atlanta, GA

Who was surveyed? – Actually two surveys: 3,607 Regional, State and Chapter leaders, including the SHRM Board of Directors and SMFT Steering Committee. 350 Pennsylvania Grassroots, including some at large members not holding SHRM volunteer positions, to see whether they would be more or less critical than the volunteer Leadership survey. How? – Provided copy of SMFT Position Paper on our issues. – questionnaire of 11 “YES” or “NO” questions – Two opportunities to write-in additional responses. – Opportunity to volunteer with our efforts.

What were the responses as percent of all mailing: – Leadership Survey: 9.4% vs. 3.4% average – Grassroots survey: 20.8% vs. 3.4% average Number of write-in comments: – Leadership Survey: 300 – Grassroots Survey: 48 – Volunteering to help: 102 Total General Results: – Overwhelming support of our issues!

Write-In Comments About SMFT 348 total write-in comments Only 14 (4%) were negative about SMFT 9 of the 14 related to the SMFT survey design: – “Biased survey” – “Leading bias” – “Designed to support SMFT position” – “Black and White.” SMFT’s position is this misunderstanding may exist if the respondent did not first read the six page Position Paper.

SURVEY RESULTS PER QUESTION

Our research shows that compensating board members of non-profit organizations is very rare. Do you believe that SHRM Board members should be paid to serve on the SHRM Board?

SHRM Board positions pay between $20,000 (Director) and $35,000 (Chair and Past Chair) per year. The Board meets four times per year. Do you believe that SHRM's Board compensation of $20,000 - $35,000 is excessive for four meetings per year

To avoid any conflict of interest, Board Source and the American Society of Association Executives (ASAE) recommend that, if a non-profit Board wishes to consider compensating itself, an independent committee should be formed to study the issue and make a recommendation to the non- profit Board. The SHRM Board has chosen not to follow these recommendations. Do you think it is important for the SHRM Board to avoid any conflict of interest by following Board Source and ASAE recommendations? OUR # 1 ISSUE!

In 2010, when SHRM was losing money and many companies were cutting back on travel because of the recession, SHRM Board members voted to award themselves the luxury of an unrestricted premium-class air travel benefit. Do you think the decision to allow unrestricted premium-class air travel was appropriate?

The SHRM Board has claimed the compensation and premium-class air travel benefits are necessary to recruit and retain qualified Board members, even though the Society has a membership of over 255,000 HR professionals, many of whom are volunteer leaders. Do you believe that these perks are necessary to recruit and retain qualified Board members?

Ever since the establishment of the Human Resource Certification Institute, SHRM Board Chairs have always been HRCI-certified, both to show support for the HRCI certification brand and to demonstrate that they possess the required minimum level of knowledge for our profession. Do you believe HRCI certification should be a required qualification for SHRM Board Chairs?

Only five of the thirteen SHRM Board members (38%) are currently HRCI-certified, the lowest percentage since the establishment of the Human Resource Certification Institute in Do you believe it is acceptable that only 38% of SHRM Board members possess HRCI certification?

After a year-long search using a professional recruiting agency failed to produce a candidate acceptable to the SHRM Board; the Board appointed SHRM's existing CFO to the position of SHRM CEO. As CEO, this finance professional with limited HR experience now represents our Society and profession to our 255,000 members, the media, and government entities. Do you believe it is appropriate for our Society's CEO to be a finance professional with limited HR experience?

According to the most recent SHRM records and official IRS reports, over several years SHRM has now acquired fewer than 200 members in China and approximately 2000 members in India, at an estimated cost of between $1100 and $1700 per member per year, a multi- million-dollar investment. Do you believe that SHRM's investment of millions of dollars in China and India should be questioned?

Less than 5% of eligible SHRM members voted in the last Board election, when there was no opposing slate of candidates. Would you be more likely to vote this year if there were a competitive slate of alternative candidates available? (Note: We are not asking if you would favor the current Board or an alternative slate of candidates, only if you would be more enthused about voting if there were candidate choices.)

SHRM Leaders vs. Grassroots Members. SURVEYLEADERSGRASSROOTS Should the board be paid? (No)77%81% Should the Board follow the ASAE/Board Source recommendations? (Yes) 98%90% Is the Board’s compensation excessive? (Yes) 91%92% During hard times was the establishment of unrestricted premium-class travel appropriate? (No) 95%100% Are perks necessary to recruit and retain board members? (No) 94%100% Was it appropriate for the Board to raise member dues after granting themselves a pay increase and travel benefits? (No) 93%97%

SHRM Leaders vs. Grassroots Members. SURVEYLEADERSGRASSROOTS Should HRCI certification be required for the chair of the Board of Directors? (Yes) 80%89% Is it acceptable that only 38% of the Board are HRCI certified? (No) 87%90% Is it appropriate for SHRM's CEO to be a finance professional? (No) 74%88% Should the investment of millions of dollars in China and India be questioned? (Yes) 86%90% Would you be more enthused about voting if there were candidate choices? (Yes) 83%85%

Where do we go from Here? “If you want to change the Society the way you should do it is to change the Board. “ EXACTLY WHAT WE INTEND TO DO! Announcing four candidates now. Will seek two more from the general membership.

SMFT CANDIDATE REQUIREMENTS SHRM Member eligible to serve Certified SPHR, PHR, GPHR or Ph.D Not accept Board compensation Not accept domestic Premium Class Travel

CANDIDATES KATE HERBST, SPHR – SHRM member 26 years – Former Chair, HRCI Served on HRCI Board 7 years – Organizational Development SME – Charter President - SHRM Great River Human Resource Association, former Iowa State Council Director, Area III Certification Director, and Iowa SHRM State Conference Co-Chair. – Frequent speaker on Talent Management and Succession Planning – SMFT full-time volunteer Operations Director

CANDIDATES MARILYN HOPPEN, SPHR -SVP & Human Resources Director -Kitsap Bank -SHRM Member 31 years -Active SHRM Volunteer Leader -Former SHRM Regional Manager (15 years) -Founded the South King County Human Resource Association. -Current President of SHRM West Sound Human Resource Management Association. -Former President, Northwest Human Resource Management Association.

CANDIDATES SUSAN WARNER, ESQ. SPHR – President of Human Resource Trouble Shooters – Recipient of SHRM Award for Professional Excellence and National Capital Award (for legislative affairs) – Founding President the SEPA (PA) SHRM Chapter – Former Vice President of Human Resources, St. Mary Hospital, Philadelphia – International Trainer/Speaker – SHRM cert-prep course taught to thousands

CANDIDATES MIKE LOSEY, SPHR, CAE – SHRM CEO (Retired) – Author – Speaker – SHRM member 25 years – Former HR Vice President Sperry/Unisys – SMFT Operations & Steering Committee Member – Certified association executive (CAE) – Former President of the World Federation of People Management – See

Thank You! QUESTIONS AND ANSWERS All PowerPoint slides are available at: