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December 6, 2001 - Summary

Your Club and NOCA: Why Going Online Is Here To Stay

by Matthew Stoller, Director of Product Development

I once made a bet that the Internet, while cool, was mostly a fad. Like many people, my first thoughts were, "The Internet's neat, but really, what does it do for m?" Seven years later, the Internet has revolutionized the way I research stocks, consume information, communicate, and even buy airline tickets. I can't remember the last time I checked stock prices by newspaper. I can't imagine life without email. Oh, and I lost the bet.

Well, a new version of online club accounting recently arrived, and I'm looking to recover from that first wager. So I'm willing to bet on NAIC Online Club Accounting (NOCA, at, which does your books, but also a whole lot more. It's really your club's home on the web. Of course, the question when dealing with anything like this is still, "This sounds neat, for the other guy. Truthfully, though, what's in it for me?" Okay. I'd wager good money that in a few years, you'll be wondering how your club ever did without NOCA.

NOCA isn't just about accounting. Sure, the accounting functionality is excellent, and it's especially convenient that anyone in the club can access financial reports whenever they want. (As my club's treasurer, this pleases me because I don't have to print them anymore!) And uploading my data to NOCA, which is a breeze to accomplish, is a great way to back up my accounting data. But NOCA is a lot more than accounting.

First of all, my club uses our NOCA club site to share files. We use the file storage area to exchange SSG files in particular, but meeting minutes, bylaws, photos, and other documents as well. This allows everyone in the club to see my analysis on energy stocks whenever they want. It's helpful for trading research and for keeping out-of-towners involved.

Second, there's now an easy way to email the entire club: NOCA's new private club message boards. Members can access message boards on the club site, and can choose to receive board postings by email as well. Messages are automatically archived, so you can track a discussion on a stock or a potential member back to its beginning. New members can poke through the archives to learn about club history, and you can invite visitors to the site, so prospective members learn how the club operates. Our out-of-town club members find this invaluable. You can even create new email message board within my club for specific topics or smaller intraclub groups.

There's a club calendar on NOCA as well, which everyone in the club can access at all times. The calendar helps us schedule meetings, note valuation dates, and more. Our club just began using this feature, but it's fast becoming more useful as our membership grows. Some members are even putting up dinner dates and other non-club stuff up there!

And then there's online voting. NOCA makes it easy for distant club members to participate in decisions, and keeps a clear record of past votes. NOCA allows asset-based voting as well as equally weighted votes, proxy voting for members who haven't gotten online, a customizable majority percentage, and much more. My club, for one, simply couldn't handle asset-allocated voting before NOCA. Now we think nothing of it. What's especially neat is that I can go back to any online vote the club has ever undertaken and see who voted for what, commentary on the vote from each member, and so on. (Going back to some votes--like that time I voted to Enron--can also be embarrassing, but, hey, that's my problem, not yours.)

There's other great stuff you should know about NOCA. It's easy to use. I can see up-to-date prices for my club's portfolio immediately upon entering. You can put photos of each member in the profile areas. An invitation system makes it simple to let fellow members know about the club site on NOCA. Threaded messages let me follow a whole discussion on the boards. And ICLUBcentral is adding new features all the time. Best of all, the site is totally secure, and since only a club's designated administrators have access to data, other members can look at the club data with no risk of messing it up.

Anyway, I'm willing to bet you that in a few years NOCA will be as much a part of your club experience as the monthly meetings. Email me if you'd like the other end of the wager. But before you do, remember that you hadn't even heard of email a few years ago.

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ICLUBtherapist: All In Favor of Online Voting, Say "Aye"

by Douglas Gerlach

Dear Doug:

When using NAIC Online Club Accounting , what is the criteria for a motion to pass a vote?

  • When a majority of online users say yes? (member based weighting)
  • When a majority of owned units say yes? (units based weighting)
  • When a majority of members say yes? (ignores online vs. offline users)
  • Something else?

It seems like the current voting system is a bit too simplistic. We are considering using it online as a proxy system to collect motions and votes for the meeting. That is, we will allow anyone to make a motion and allow anyone to vote, but use that not as a final decision until the same motion and votes are confirmed at the monthly meeting. Does this sound right?

- Jon B.

Dear Jon:

On the surface, voting in a club seems like it ought to be the easiest thing in the world. Members just raise their hands when a vote is called, the club president counts the hands for and against, and the motion either passes or it doesn't. What could be simpler? You needn't even worry about butterfly ballots or hanging chads.

But in practice, club voting procedures can be much more complicated. Should each member have one vote, or should members vote according to the number of units they own? Is a simple majority enough to pass a motion, or is it better to require a two-thirds majority or unanimous decisions? And should you handle voting for the purchase or sale of stock differently than you manage voting on the admission of a new member?

And now, as you've discovered, online club tools can add a new twist to voting procedures. For pure online clubs--those that don't meet in person and instead conduct all their business via the Internet--online voting is the only way to make decisions. But other clubs need to figure out how (or if) to integrate online voting with existing decision-making procedures. For instance, in your club, if not all members have Internet access, then you might wish to use online voting informally or not at all.

Before I go any further, it's probably useful to review how online voting works at NAIC Online Club Accounting (NOCA, at Your question suggests to me that you're commenting on the older version of the site. In the most recent upgrade of ICLUBcentral's online tools, the voting mechanism has been expanded and improved, and allows much more flexibility than the prior version.

To conduct a vote on the site, you must enter the following information:

  • The motion under discussion, with additional notes if desired.
  • The number of days the vote should remain open.
  • Whether the vote should be weighted by each member's assets in the club, or if each member should have one vote.
  • At least two and no more than five choices for the ballot, such as Yes, No, and Abstain. Another way to use this feature is to enter two or more stocks when you only have enough cash to buy one lot--the stock that receives the majority of votes is then purchased.
  • The percentage required to pass the motion, such as a simple majority (50%), a two-thirds majority (66%) or unanimous (100%).
  • When to end the voting (either at the end of the period, or when a majority is reached).

These options offer quite a lot of functionality. In addition, designated administrators (usually the club's officers) can post online votes on behalf of offline members. In fact, just about the only voting function not currently supported at is the requirement that a motion be seconded before it's allowed on the ballot. (Many clubs require that motions be seconded before they're placed before the membership for a vote. Even though this is usually just a formality, it can save your club from discussing an action for which there is no support.)

For the most part, online voting is not really any different from voting in person. In the past, however, I've often received questions from clubs about voting between monthly meetings. I've tended to discourage clubs from trying to come up with mechanisms for holding votes in mid-month, since the desire for such votes often stems from a focus on short-term factors. If your club is properly invested in fundamentally strong companies, then you'll be well positioned even if bad news emerges that causes a stock to lose value in the middle of the month. Even if you can muster a vote to sell a stock on the heels of bad news, chances are good that the damage will have already been done to the stock's price. It's better to study up on the company's newly discovered problems and discuss the stock in detail at the next month's meeting. If you decide to sell at that time, you probably won't be any worse off than if you had managed to sell at a moment's notice a week or two earlier.

In my online club, our ballot is posted with all motions at the end of the month. Members have five days to place their votes, and the secretary tallies and posts the official results of the ballots. In this way, all actions are taken only after members have had the opportunity to deliberate and consider each motion, not on the spur of the moment.

I do see another problem with your proposal. Holding non-binding votes in the middle of the month might make members think that meeting ballots are a foregone conclusion. This could have an adverse effect on participation. And members who are not online won't be able to participate in discussions (though club administrators can enter proxy votes for them). You'll probably be better off continuing to conduct votes during your club's monthly meetings as you've been doing in the past.

Just because offers a voting tool doesn't mean you must always use it, either in conjunction with or instead of voting at your meeting. Remember that you can create policies that describe how it is to be used in your club. For example, you might decide to use online voting for administrative items, but still conduct portfolio votes only during meetings. The bottom line when it comes to conducting votes in your club--online or off--is your club's operating agreements, typically a partnership agreement and/or bylaws. If you think that online voting will be useful for your club, then you should definitely put down in writing your procedures for conducting online votes.

- Doug

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