After exec turmoil, NBAA puts its ear to the ground

 - October 2, 2007, 10:43 AM

It is not unheard of these days for a company to hire an executive and have that person depart within a short period. The newly hired president and COO of MCI left that telecommunications giant after just seven months, citing a planned management reorganization.

When Shelley Longmuir tendered her resignation as president and CEO of NBAA in April, after less than nine months, it was attributed to a difference between her and the board over the group’s future direction.

As it searches for a replacement for Longmuir, NBAA is going about its business, according to board chairman and interim president Don Baldwin, who added that the organization has much on its plate. And in future years, NBAA anticipates a membership increase with the new very light jets (VLJs) that are currently being developed.

“They are clearly on our agenda,” said Baldwin. “We have had significant discussions on a board level about the best services and products that we can offer the owners and operators of these very light jets.”

The organization is also courting the owners of managed aircraft, providing appropriate services to those users, who are quite different from a traditional flight department. They may need more information on taxes and ownership issues, as well as on their responsibilities as an owner, and not so much on the details of day-to-day operations.

“That is an opportunity for us,” said Baldwin, “along with small flight departments. Many are not NBAA members, so we are in the process of designing the right products and services for these operators.”

NBAA is holding focus groups, as well as surveying traditional flight departments, the one- and two-airplane operators, fractional owners and people who have ordered VLJs. “We are starting to hear back from these various groups what their needs are,” he continued, “and based on that we can develop a much better, more focused product and service for various owner-operator requirements.”

The NBAA board is heavily represented by large flight departments–mainly, some would say, because only large departments have the manpower to spare for board service. Asked about efforts to interest these VLJ and small-department people in becoming active in NBAA affairs, Baldwin acknowledged that is what the association is trying to understand with the focus groups.

NBAA has three classes of membership–corporate members and business members, who have voting rights; and associate members, who do not. As of the beginning of the year, associate members outnumbered corporate and business members combined.

But businessmen flying their own airplanes have businesses to run, and NBAA wants to learn how to include them in all levels of association activity–standing committee levels, the board level and even grassroots levels, where there might be a significant opportunity to lobby government and do public relations.

“We may need to establish a standing committee made up of operators of the very light jets,” Baldwin suggested. “They might do more frequent conference calls, and videoconferencing might be a possibility. A standing committee can rotate its meeting cities a lot more easily than moving a whole board from one place to another to meet.”

He reminded that NBAA is also able to assist smaller operators through state and regional business aviation associations, and it now has a standing committee representing the regional associations. That is another way for the owners of light jets and one- and two-airplane flight departments to participate, because those meetings are relatively close to their home base.

Baldwin said that through their local associations, concerns and initiatives can come up through the NBAA standing committee to the board of directors. “That is a way for many of these folks to participate in business aviation,” Baldwin said. “The standing committee chairs have direct access to the board and to me; they can call us anytime. We’ve had requests where they have an initiative and want to present it to the board and spend time with us to discuss that.”

The board and all of the standing committee chairs and vice chairs meet once a year, but Baldwin said this year there will be more give and take on issues and what support NBAA needs to provide to the committees.

NBAA is examining its own policies, having been criticized in the past for its governance procedures. To some outsiders, the board often appears to work more like a club with only one candidate running for any opening.

Baldwin pointed out that NBAA has asked the membership through its weekly updates and via its Web site for recommendations on potential board candidates. He acknowledged there had been a perception that board candidates were hand-picked, but changes were made to the process “some years back.”

NBAA now solicits recommendations for membership on the board, and then a résumé goes to a nominating committee. “We’re trying to balance the board from a business perspective–a representation of business members and corporate members,” said Baldwin. “And out of the corporate members, we like to try to balance the size of flight departments–small, medium and large. There is also a diversity factor with individuals.”

In addition, there is a geographical component. Currently there is a concentration in White Plains, N.Y., with three board members all within a half mile of each other. “As the board transitions,” he said, “we want to look at the region where board members come from.”

For each open position on the board, the nominating committee presents two candidates that it believes are best qualified based on those criteria. This month, there are two openings, for which four candidates will be presented to the board at its quarterly meeting, and it will vote for two of those four.

At the beginning of this year, NBAA had 1,856 corporate members, 1,572 business members and 4,093 associate members. Corporate members must own or operate a multi-engine aircraft or a single-engine turbine-powered aircraft, have an operations manual and maintenance program, be flown by two professional pilots (one must be an ATP), undergo recurrent training at least annually and derive less than 50 percent of its sales from business aviation clients. A business member is an entity that owns or operates an aircraft but does not qualify for corporate membership. Pilot(s) must have a commercial certificate with an instrument rating and undergo a proficiency check at least once per year, and the entity must derive less than 50 percent of its sales from business aviation clients. Associate members include entities that derive more than 50 percent of their sales volume from business aviation and those whose pilots do not meet the criteria for corporate or business membership, along with other entities that have an interest in business aviation.

On the financial side, NBAA derives about 65 percent of its approximately $16 million annual income from its meeting and convention, which currently attracts about 30,000 registrants and more than 1,000 exhibitors each year. Nevertheless, some smaller flight departments are not able to attend because of time and travel requirements.

That led NBAA to develop the concept of business aviation regional forums, described as one-day mini-conventions. The association is now promoting about six a year, both domestically and abroad. “We understand that the smaller departments can’t afford to break people away,” Baldwin said. “So if we can bring a component of the convention to them, that will help increase participation.”

The Search

Meanwhile, NBAA continues its search for a successor to Longmuir. Baldwin, who was head of the search committee that chose Longmuir, said she was hired to lead the association to the next level. “One of the areas we wanted to enhance significantly was our government-affairs area,” he explained.

Baldwin said Longmuir obviously had experience in dealing with Capitol Hill, was well respected for working with regulators, as well as elected officials, and had also demonstrated leadership from a business perspective. “In a sense, that’s what the board was expecting,” he said. “And as I have said before, we just weren’t seeing the effectiveness in those areas.”

Longmuir was hired from a list of 100 candidates compiled by an executive search firm, and her abrupt departure during the board’s quarterly meeting this spring followed “several days of intense deliberations.” Her resignation led some to question whether there might be systemic problems within the association, since it was the board of directors that was ultimately responsible for hiring her.

One veteran aviation association official suggested that NBAA might want to consider bringing in an outside organization to audit its organizational structure and determine what may have led to the mishap.

“We’re doing that,” Baldwin revealed. “We are currently interviewing firms to work with us on the organizational side. We want to look at everything to make sure there may or may not have been some other issues that subtly had an effect on these recent events.”