NBTA's Board Votes To Pursue ACTE Merger

The National Business Travel Association's board of directors has voted unanimously to continue pursuing discussions on a possible merger with the Association of Corporate Travel Executives.

A merger agreement, reached by a handful of members of each association's board of directors, was derailed last week after members of the ACTE board determined they would not have the two-thirds majority required for the association to approve such a move.

NBTA yesterday said its own vote on the matter took place during the board's regularly scheduled quarterly meeting, where the board "supported the outline of a potential structure for a merger process previously drafted by members of the ACTE Board."

That agreement called for maintaining the ACTE name in some form for two years, allotting ACTE five three-year board appointments—two supplier members and three buyers—until a formal election and creating a new board of the newly merged entity to include three board members from regions other than the United States.

"They have such a strong international presence that they wanted to be fair to those groups," NBTA president and CEO Kevin Maguire said of the agreement. The draft agreement also called for the creation of the International Leadership Council, comprising elected international leaders to represent "international membership needs."

The agreement also called for the new entity's board to appoint a new executive director for the merged entity. "The leadership question was going to be an issue because we had two executive directors for each organization and we would end up with one organization," Maguire noted. "On our side, it became a non-issue because Bill Connors accepted a position at another organization, but in the discussion with ACTE we decided it would probably be a good idea to review whether either executive director would remain. The end result was they decided it would probably be best to solicit the services of a new executive director in the new organization that we would all have some input in looking at the final process of determining that individual."

The agreement also called for NBTA to assume some of ACTE's expenses post-merger, including management buyouts and other labor contracts, ACTE's office lease, which expires next year, and "ACTE supplier expectations" on signed deals for advertising or sponsorships.

This most recent round of discussions between the two organizations began in Dallas in early April, when ACTE president Doug Weeks and treasurer-elect Mary Ellen George met with NBTA's Maguire and NBTA Allied Leadership Council president Scott Solombrino. Through the course of almost weekly meetings spanning about two months, the small cluster of elected association leaders slowly widened the circle of input to include other members of each association's boards to draft the agreement.

"The approach we both took was, let's look at things with a new blank piece of paper, a fresh start," Maguire said. "Anything that happened in the past isn't important; any grudges that happened between anybody aren't important. We're starting with a new beginning. The pressure was definitely out there from the economy standpoint, and we sat down to see how we could get this to work."

While the two organizations had discussed such a merger many times previously, the current economic reality appears to have made this most recent effort more substantial than prior discussions. It wasn't clear if the economy could continue to sustain two competing organizations, as some supplier sponsors supporting both organizations were seeking relief from the dual expense.

As Maguire put it, "The supporters—which is really our allied base on both sides—said, 'Look, people, the economy does not allow us to continue to give money at the rate we're giving it and at the level we're giving it at each organization. Please find a way to make this work.' "

Meanwhile, ACTE's board of directors has sprung a leak, as both ACTE treasurer-elect Mary Ellen George and treasurer Brad Seitz have resigned from their board posts. An ACTE spokesperson yesterday confirmed those two resignations, but said no other board members had left the board.

In a statement, NBTA's Maguire said, "The NBTA Board sees great potential in a merger of ACTE and NBTA, particularly in today's tough economic environment. There are hundreds of companies that currently invest in both organizations. The NBTA Board wants to give those companies a chance to lower their investments while maximizing the value delivered. We believe one way that can be done is to combine the best aspects of two great organizations—NBTA and ACTE."

Source: Business Travel News