Issue #1: "External Stakeholders"
A cooperative by definition is owned and democratically run by its members. There is really no such thing as an "external stakeholder". Opening up the Board of Directors to corporate executives and politicians with no connection to the BSC, is a massive conflict of interest.
In addition to changing how the alumni board rep is selected, this proposal opens two Board positions up to everybody in the world. This is not made clear in the rationale for the proposal, and this has been misleadingly framed as opening up Board to people barred from the BSCAA by structural oppression.
As discussed, BSC alumni in general and BSCAA members in particular are quite different from "all non-member persons". This provision is distinct from the question of the BSCAA-appointed Board Director, and deserves its own post.
The current proposal would change the composition of Board as follows:
Who is a Stakeholder?
Internally, Board has been using the term "external stakeholder" to refer to these proposed Board Directors with no connection to the BSC. The argument is that by serving on the Board of Directors, they open themselves up to individual liability and therefore become stakeholders in the organization.
This is based on the fundamentally faulty logic that financially underwriting an organization's liabilities, is the same thing as having interests aligned with that organization's goals. When people file lawsuits, then sue for a specific amount of money. Any fixed amount of money will mean a lot less to a CFO of a for-profit corporation, than it will to poor college students volunteering as Board Directors of the tenant-owned cooperative they actually live in.
A cooperative by definition is owned and democratically run by its members. There is really no such thing as an "external stakeholder". Opening up the Board of Directors to people who have never been BSC members and are not current employees, is a massive conflict of interest.
What's at stake?
The BSC owns a substantial amount of land and housing that has ballooned in monetary value over the last several decades. If the point of an external Board Director position is to provide knowledge and expertise, then even in the best case, this most likely means somebody with financial stake in the real estate industry. Basic economic intuition dictates that all sorts of profit-motivated bad actors will clamor for Board positions if we open our Board up to them.
Our status as a cooperative, and our current bylaws' restrictions on who can be a Board member, are all that insulate from these broader market pressures. The proposed bylaw change would fundamentally and permanently compromise our autonomy as an organization.
Motivating example: Economic coercion
Picture this. The BSC is renegotiating the Fenwick lease. The UC "strongly recommends" some UC administrator, or perhaps someone with investments in construction companies the UC has contracts with, as an external Board Director candidate.
Coincidentally, UC hints that they are unsatisfied with the current state of negotiations and may have to triple the cost of the lease, but that appointing a more UC-friendly Board director would make it less likely that they refuse to renew.
It's a lose-lose situation: If you appoint the UC's nominee, you've undermined the integrity of the BSC, and if you don't, then the UC views it as hostile and retaliates. It would be naive not to expect the UC administration to play dirty.
That's not even getting to all the private investors who would love to get their hands on votes on our Board. The banks that handle our loans, developers and landlords who look at $500-a-month rent in Berkeley and see only a missed opportunity to profit, or even a wealthy individual with the power to threaten the BSC with frivolous lawsuits (liability!), would all have both the motive and the means to make offers we can't refuse.
This really could happen, in three years or less
I don't expect this to play out in the first year or two - the current Board will make a good-faith effort to select non-corrupt external Directors (Spring 2019), and they will probably do a fine job.
Then next spring (Spring 2020), these "real adult" professionals with a modicum of institutional memory (but no firsthand experience living in a housing cooperative), will be the obvious candidates for Cabinet in 2020-2021. Starting in Fall 2020, the three external directors on Cabinet will then only have to win over one of the four other cabinet members, to control the agenda and framing of everything Board hears for the rest of the year.
An externally-addled Cabinet will also get to recommend the next round of external Directors in Spring 2021. They will again make a good faith effort, but since their own experiences are from the non-profit industrial complex and not cooperatives, they will likely choose people even less connected to cooperative principles.
They could also push to rewrite the bylaws again - why bother with proportionality at all? An amendment that reduced member representation to one Director per house, and allocated an additional 6 spots to external Directors, would be possible using the same loophole the current proposal uses to avoid the membership referendum that would normally be required for amendments like this. With Board's new power (granted by the current proposal) to remove student Directors by simple majority vote, there would be an even stronger disincentive for individual Directors to dissent.
By Fall 2021, Board would have only 20 BSC members and 10 non-members. The people who actually live in the coops, would have to vote unanimously every time in order to do anything requiring 2/3 that the non-members opposed. Have you ever seen Board vote unanimously against a strong recommendation from Kim or Victor?
If this seems overly pessimistic, we invite you to review what happened with the last bylaw change.