Dear community and future trustees,
4 years ago, in june 2004, I had the privilege of being elected by the
community to be a trustee on the board of Wikimedia Foundation.
Needless to say, I felt very honored.
I also remember that I had no idea what "fiduciary duties" meant. I do
not think the words were even mentionned at that time. Very likely, most
candidates at that time had no idea either.
To be fair, the Foundation at that time was hardly more than a couple of
papers in an administration (articles of incorporation), a couple of
servers and domain names and three trustees (including two I had never
talked to, Tim and Michael). Probably a bank account as well (though, I
am not even sure). And that was it.
There was no board manual. There were few meetings. There was no
decision making procedure. No minutes. No financial statements. No
policies. No charters. No guidelines.
There were no vehicules for communication between board members, beyond
our private email addresses. No board wiki. No board list.
There was no office. No staff.
I think you get the idea :-)
Most chapters as of today, probably are more organized than the
Foundation was in june 2004.
Presumably, most potential candidates to the board this year, will know
little more than what I knew back in 2004 of trustees role and duties.
Over the years, I tried to overcome my own ignorance, and I would like
to offer my own simplified knowledge to future candidates. Incidently,
as Chair, it is my role to "orient" new Trustees. Over the past 18
months, I tried to collect information so that new Trustees may join the
board with a better understanding of what the role encompasses, and so
that they be more efficient early on.
------------
What are the responsibilities of a Trustee.
First link: http://wikimediafoundation.org/wiki/Board_member
This page summarizes the responsibilities of the Board (in its
entirety), and provides some additional insights. I could not be more
clear in saying that CANDIDATES FOR THE POSITION SHOULD READ THIS PAGE.
------------
Board manual
Second link: http://meta.wikimedia.org/wiki/Board_manual
I started building this page a long time ago. It is now more or less
complete, and of course, it should be a work in progress. It is
certainly not perfect (by far) but as April 2008, this is the more
accurate and complete document to orient a new Trustee.
Again, I do think candidates should read this page before candidating.
It might open their eyes on what the job is about.
-------------
Third consideration: fiduciary duties.
Directors are subject to two fiduciary duties in carrying out their
governance responsibilities: the duty of care and the duty of loyalty.
Sometimes, there is also reference to the duty of obedience as well (I
never heard it said in the contact of WMF).
Here are the definitions given by www.boardsource.org.
Duty of Care
The duty of care describes the level of competence that is expected of a
board member, and is commonly expressed as the duty of "care that an
ordinarily prudent person would exercise in a like position and under
similar circumstances." This means that a board member owes the duty to
exercise reasonable care when he or she makes a decision as a steward of
the organization.
Duty of Loyalty
The duty of loyalty is a standard of faithfulness; a board member must
give undivided allegiance when making decisions affecting the
organization. This means that a board member can never use information
obtained as a member for personal gain, but must act in the best
interests of the organization.
Duty of Obedience
The duty of obedience requires board members to be faithful to the
organization's mission. They are not permitted to act in a way that is
inconsistent with the central goals of the organization. A basis for
this rule lies in the public's trust that the organization will manage
donated funds to fulfill the organization's mission.
I am not quite sure why the duty of Obedience is no more mentionned
generally. I would argue that this duty is actually precisely at the
center of our current controversy regarding Trustee appointment or
election.
In requesting that all Trustees be already wikipedians of some sort (a
request from many wikipedians), the underlying request is that we should
make sure all Trustees actually AGREE with our mission. The underlying
request is that ALL board members should BELIEVE in our values.
However, some WMF trustees and apparently our ED consider that the duty
of loyalty and care are sufficient to make a good board member. Note
that this seems to be a general trend these days.
I am not entirely sure what my own position is on the matter. I fear
that we may have difficulties to find Trustees who deeply agree with our
vision and values, to fill certain expertises. The same issue is of
course valid with staff members. It would be difficult to expect all
staff members to be wikipedians, however, we intuitively consider they
should be faithful to our mission.
So, I would argue that though we do not list this duty as a
*requirement*, there is nevertheless an expectation that the Trustee
will be faithful to the organization.
This is the main reason why I actually wished that we outline clearly
the MISSION (done last year) and the VALUES (done this year) of the
organization. We can not expect a new trustee (in particular an
appointed one) to have these values in mind when joining; but we expect
him to be completely familiar with them and to respect them as much as
possible. I would similarly expect the ED and the staff to make their
best to have these values in mind, EACH TIME they have to make a
operational decision.
As a reminder: http://wikimediafoundation.org/wiki/Values
Summary
A board of directors has certain legal obligations, known as duties.
* Take reasonable care when making decisions for the organization
(called “duty of care”)
* Act in the best interest of the organization (called “duty of loyalty”)
* Act in accordance with the organization’s mission (called “duty of
obedience”)
--------------
With the above principles in mind, let me provide a few comments/examples.
Failure to the duty of care
Failing to attend board meeting is a breach of the duty of care. Failing
to vote is a breach of the duty of care. Failing to act when informed of
an illegal act is a breach of the duty of care. Failing to provide board
minutes is a breach of duty of care. Failing to find a new director when
there is none and it is necessary, is a breach of duty of care etc...
Quite obviously, it is difficult to sometimes identify what is really a
breach.
Family wise, the equivalent of failure would be "not feeding a child to
the point of him getting sick". However, refusal to give him chocolate
every day is okay.
Writing policies is a good way to identify what is okay, what is
borderline and what is non acceptable.
Quite a few policies have been written in the last 2 years. Several are
quite obviously still missing.
An example of a policy missing is this one: what is to be done when a
board member is failing to the duty of care ?
As you may imagine, that's a tough one. I hope the board will handle
this one as early as possible.
Failure to the duty of loyalty
May typically occur when a board member has a business related to the
activity of the Foundation. He may vote in such a way that will improve
his business as a primary reason, whilst another decision would actually
be better for the Foundation. If so, it is a breach to the duty of loyalty.
Incidently, if the community (or chapters) elect a Trustee, whom the
board can estimate would be/is non-loyal or destructive, it would be a
breach to the duty of care to not remove this Trustee.
The conflict of interest policy is meant to help avoid such situations.
As you may guess, the challenge is to identify when the Trustee action
was done with a higher loyalty to another organization.
Failure to the duty of obedience
Voting to stop providing free dumps would be a failure to the duty of
obedience. This one looks like an easy one.
But when you really look at it, that duty is the one worrying the
community. This is the area of decision related to "changes of licence",
"putting advertisement on the website", "not providing financial
statements to the community", selling out to Mitrocosf, etc...
There are other duties not listed here.
*Duties of oversight
*Ethics
* etc...
This would be very long to list, so I thought it best to rather provide
a summary of major trends applying to non profits. I expect all
candidates will make the effort to think about which areas we currently
cover well, which areas are only partially taken care of, and which
areas are still "not-taken-care of at all".
--------------
The major developments and trends in principles of governance of
nonprofit corporations, which seem to apply easily to our organization
are the following ones:
(source: http://www.icnl.org/knowledge/ijnl/vol7iss1/art_3.htm)
1. The board of directors of a nonprofit corporation must engage in
active, independent, and informed oversight of the activities of the
corporation, particularly those of senior management.
2. Directors with information and analysis relevant to the board’s
decision-making and oversight responsibilities are obligated to disclose
that information and analysis to the board and not sit passively. Senior
management should recognize and fulfill an obligation to disclose
information and analysis relevant to such person’s decision-making and
oversight responsibilities.
3. If the non profit corporation is appointing members to the Board, it
should have a nominating/governance committee composed entirely of
directors who are independent in the sense that they are not part of the
management team and they are not compensated by the corporation for
services rendered to it. The nominating committee is responsible
(amongst other things) for nominating qualified candidates to stand for
election to the board.
4. Every nonprofit corporation with substantial assets or annual
revenues should develop and implement a three-tier annual board
evaluation process whereby the performances of the board as a whole,
each board committee, and each director are evaluated annually. The
board should also develop and implement a process for review and
evaluation of the chief executive officer on an annual basis.
5. Each board of directors is responsible for overseeing corporate
ethics. Ethical conduct, including compliance with the requirements of
law, is vital to a corporation’s sustainability and long-term success.
This includes considerations such as Conflict of Interest Policy,
6. Every nonprofit corporation with substantial assets or annual
revenue should be audited annually by an independent auditing firm. The
corporation should change auditing firms or the lead and reviewing audit
partner periodically to assure a fresh look at the firm’s financial
statements. The audit committee should be composed of completely
independent directors and should set rules and processes for complaints
concerning accounting and internal control practices. It is responsible
for hiring, setting compensation, and overseeing the auditor’s activities.
7. The chief executive officer and the chief financial officer of every
nonprofit corporation should review Form 990 or Form 990-PF and other
annual information returns filed by the nonprofit organization with
federal and state agencies.
8. Any attorney providing legal services to a nonprofit corporation who
learns of evidence that the attorney reasonably believes indicates a
material breach of fiduciary duty or similar violation should report
that evidence to the chief executive officer of the nonprofit
corporation and, if warranted by the seriousness of the matter, to the
board of directors.
9. Every nonprofit corporation should adopt a written policy setting
forth standards for document integrity, retention, and destruction.
10. Every nonprofit corporation should adopt a written policy to permit
and encourage employees to alert management and the board to ethical
issues and potential violations of law without fear of retribution.
---------
I am sorry, this is very long :-)
This is a little part of my 4 years experience. The main difficulties were
* to always run behind Wikipedia. No time to "step back" and think about
it. There were always more servers to buy, more bills to pay for, more
phone calls, more lawsuits, more press articles etc...
* whilst running, to build a necessary framework
* and to follow duties, not backed up by policies
It is difficult to say someone is failing to the duty of loyalty... when
there is no conflict of interest policy.
It is difficult to say someone is failing to the duty of care... when
there is no expense reimbursement policy.
It is difficult to say someone is failing to the duty of oversight...
when he is doing the job himself (no one can reasonably oversight his
own job)
The future board members will be lucky, because there is now a minimum
of framework. There are policies to refer to. There are guidelines.
There is a staff to take care of operations.
And mostly, there is experience.
Who can guess where the Foundation will be next year ?
I hope this provides some insights to everyone interested.
Ant
_______________________________________________
foundation-l mailing list
foundation-l@lists.wikimedia.org
Unsubscribe: https://lists.wikimedia.org/mailman/listinfo/foundation-l
4 years ago, in june 2004, I had the privilege of being elected by the
community to be a trustee on the board of Wikimedia Foundation.
Needless to say, I felt very honored.
I also remember that I had no idea what "fiduciary duties" meant. I do
not think the words were even mentionned at that time. Very likely, most
candidates at that time had no idea either.
To be fair, the Foundation at that time was hardly more than a couple of
papers in an administration (articles of incorporation), a couple of
servers and domain names and three trustees (including two I had never
talked to, Tim and Michael). Probably a bank account as well (though, I
am not even sure). And that was it.
There was no board manual. There were few meetings. There was no
decision making procedure. No minutes. No financial statements. No
policies. No charters. No guidelines.
There were no vehicules for communication between board members, beyond
our private email addresses. No board wiki. No board list.
There was no office. No staff.
I think you get the idea :-)
Most chapters as of today, probably are more organized than the
Foundation was in june 2004.
Presumably, most potential candidates to the board this year, will know
little more than what I knew back in 2004 of trustees role and duties.
Over the years, I tried to overcome my own ignorance, and I would like
to offer my own simplified knowledge to future candidates. Incidently,
as Chair, it is my role to "orient" new Trustees. Over the past 18
months, I tried to collect information so that new Trustees may join the
board with a better understanding of what the role encompasses, and so
that they be more efficient early on.
------------
What are the responsibilities of a Trustee.
First link: http://wikimediafoundation.org/wiki/Board_member
This page summarizes the responsibilities of the Board (in its
entirety), and provides some additional insights. I could not be more
clear in saying that CANDIDATES FOR THE POSITION SHOULD READ THIS PAGE.
------------
Board manual
Second link: http://meta.wikimedia.org/wiki/Board_manual
I started building this page a long time ago. It is now more or less
complete, and of course, it should be a work in progress. It is
certainly not perfect (by far) but as April 2008, this is the more
accurate and complete document to orient a new Trustee.
Again, I do think candidates should read this page before candidating.
It might open their eyes on what the job is about.
-------------
Third consideration: fiduciary duties.
Directors are subject to two fiduciary duties in carrying out their
governance responsibilities: the duty of care and the duty of loyalty.
Sometimes, there is also reference to the duty of obedience as well (I
never heard it said in the contact of WMF).
Here are the definitions given by www.boardsource.org.
Duty of Care
The duty of care describes the level of competence that is expected of a
board member, and is commonly expressed as the duty of "care that an
ordinarily prudent person would exercise in a like position and under
similar circumstances." This means that a board member owes the duty to
exercise reasonable care when he or she makes a decision as a steward of
the organization.
Duty of Loyalty
The duty of loyalty is a standard of faithfulness; a board member must
give undivided allegiance when making decisions affecting the
organization. This means that a board member can never use information
obtained as a member for personal gain, but must act in the best
interests of the organization.
Duty of Obedience
The duty of obedience requires board members to be faithful to the
organization's mission. They are not permitted to act in a way that is
inconsistent with the central goals of the organization. A basis for
this rule lies in the public's trust that the organization will manage
donated funds to fulfill the organization's mission.
I am not quite sure why the duty of Obedience is no more mentionned
generally. I would argue that this duty is actually precisely at the
center of our current controversy regarding Trustee appointment or
election.
In requesting that all Trustees be already wikipedians of some sort (a
request from many wikipedians), the underlying request is that we should
make sure all Trustees actually AGREE with our mission. The underlying
request is that ALL board members should BELIEVE in our values.
However, some WMF trustees and apparently our ED consider that the duty
of loyalty and care are sufficient to make a good board member. Note
that this seems to be a general trend these days.
I am not entirely sure what my own position is on the matter. I fear
that we may have difficulties to find Trustees who deeply agree with our
vision and values, to fill certain expertises. The same issue is of
course valid with staff members. It would be difficult to expect all
staff members to be wikipedians, however, we intuitively consider they
should be faithful to our mission.
So, I would argue that though we do not list this duty as a
*requirement*, there is nevertheless an expectation that the Trustee
will be faithful to the organization.
This is the main reason why I actually wished that we outline clearly
the MISSION (done last year) and the VALUES (done this year) of the
organization. We can not expect a new trustee (in particular an
appointed one) to have these values in mind when joining; but we expect
him to be completely familiar with them and to respect them as much as
possible. I would similarly expect the ED and the staff to make their
best to have these values in mind, EACH TIME they have to make a
operational decision.
As a reminder: http://wikimediafoundation.org/wiki/Values
Summary
A board of directors has certain legal obligations, known as duties.
* Take reasonable care when making decisions for the organization
(called “duty of care”)
* Act in the best interest of the organization (called “duty of loyalty”)
* Act in accordance with the organization’s mission (called “duty of
obedience”)
--------------
With the above principles in mind, let me provide a few comments/examples.
Failure to the duty of care
Failing to attend board meeting is a breach of the duty of care. Failing
to vote is a breach of the duty of care. Failing to act when informed of
an illegal act is a breach of the duty of care. Failing to provide board
minutes is a breach of duty of care. Failing to find a new director when
there is none and it is necessary, is a breach of duty of care etc...
Quite obviously, it is difficult to sometimes identify what is really a
breach.
Family wise, the equivalent of failure would be "not feeding a child to
the point of him getting sick". However, refusal to give him chocolate
every day is okay.
Writing policies is a good way to identify what is okay, what is
borderline and what is non acceptable.
Quite a few policies have been written in the last 2 years. Several are
quite obviously still missing.
An example of a policy missing is this one: what is to be done when a
board member is failing to the duty of care ?
As you may imagine, that's a tough one. I hope the board will handle
this one as early as possible.
Failure to the duty of loyalty
May typically occur when a board member has a business related to the
activity of the Foundation. He may vote in such a way that will improve
his business as a primary reason, whilst another decision would actually
be better for the Foundation. If so, it is a breach to the duty of loyalty.
Incidently, if the community (or chapters) elect a Trustee, whom the
board can estimate would be/is non-loyal or destructive, it would be a
breach to the duty of care to not remove this Trustee.
The conflict of interest policy is meant to help avoid such situations.
As you may guess, the challenge is to identify when the Trustee action
was done with a higher loyalty to another organization.
Failure to the duty of obedience
Voting to stop providing free dumps would be a failure to the duty of
obedience. This one looks like an easy one.
But when you really look at it, that duty is the one worrying the
community. This is the area of decision related to "changes of licence",
"putting advertisement on the website", "not providing financial
statements to the community", selling out to Mitrocosf, etc...
There are other duties not listed here.
*Duties of oversight
*Ethics
* etc...
This would be very long to list, so I thought it best to rather provide
a summary of major trends applying to non profits. I expect all
candidates will make the effort to think about which areas we currently
cover well, which areas are only partially taken care of, and which
areas are still "not-taken-care of at all".
--------------
The major developments and trends in principles of governance of
nonprofit corporations, which seem to apply easily to our organization
are the following ones:
(source: http://www.icnl.org/knowledge/ijnl/vol7iss1/art_3.htm)
1. The board of directors of a nonprofit corporation must engage in
active, independent, and informed oversight of the activities of the
corporation, particularly those of senior management.
2. Directors with information and analysis relevant to the board’s
decision-making and oversight responsibilities are obligated to disclose
that information and analysis to the board and not sit passively. Senior
management should recognize and fulfill an obligation to disclose
information and analysis relevant to such person’s decision-making and
oversight responsibilities.
3. If the non profit corporation is appointing members to the Board, it
should have a nominating/governance committee composed entirely of
directors who are independent in the sense that they are not part of the
management team and they are not compensated by the corporation for
services rendered to it. The nominating committee is responsible
(amongst other things) for nominating qualified candidates to stand for
election to the board.
4. Every nonprofit corporation with substantial assets or annual
revenues should develop and implement a three-tier annual board
evaluation process whereby the performances of the board as a whole,
each board committee, and each director are evaluated annually. The
board should also develop and implement a process for review and
evaluation of the chief executive officer on an annual basis.
5. Each board of directors is responsible for overseeing corporate
ethics. Ethical conduct, including compliance with the requirements of
law, is vital to a corporation’s sustainability and long-term success.
This includes considerations such as Conflict of Interest Policy,
6. Every nonprofit corporation with substantial assets or annual
revenue should be audited annually by an independent auditing firm. The
corporation should change auditing firms or the lead and reviewing audit
partner periodically to assure a fresh look at the firm’s financial
statements. The audit committee should be composed of completely
independent directors and should set rules and processes for complaints
concerning accounting and internal control practices. It is responsible
for hiring, setting compensation, and overseeing the auditor’s activities.
7. The chief executive officer and the chief financial officer of every
nonprofit corporation should review Form 990 or Form 990-PF and other
annual information returns filed by the nonprofit organization with
federal and state agencies.
8. Any attorney providing legal services to a nonprofit corporation who
learns of evidence that the attorney reasonably believes indicates a
material breach of fiduciary duty or similar violation should report
that evidence to the chief executive officer of the nonprofit
corporation and, if warranted by the seriousness of the matter, to the
board of directors.
9. Every nonprofit corporation should adopt a written policy setting
forth standards for document integrity, retention, and destruction.
10. Every nonprofit corporation should adopt a written policy to permit
and encourage employees to alert management and the board to ethical
issues and potential violations of law without fear of retribution.
---------
I am sorry, this is very long :-)
This is a little part of my 4 years experience. The main difficulties were
* to always run behind Wikipedia. No time to "step back" and think about
it. There were always more servers to buy, more bills to pay for, more
phone calls, more lawsuits, more press articles etc...
* whilst running, to build a necessary framework
* and to follow duties, not backed up by policies
It is difficult to say someone is failing to the duty of loyalty... when
there is no conflict of interest policy.
It is difficult to say someone is failing to the duty of care... when
there is no expense reimbursement policy.
It is difficult to say someone is failing to the duty of oversight...
when he is doing the job himself (no one can reasonably oversight his
own job)
The future board members will be lucky, because there is now a minimum
of framework. There are policies to refer to. There are guidelines.
There is a staff to take care of operations.
And mostly, there is experience.
Who can guess where the Foundation will be next year ?
I hope this provides some insights to everyone interested.
Ant
_______________________________________________
foundation-l mailing list
foundation-l@lists.wikimedia.org
Unsubscribe: https://lists.wikimedia.org/mailman/listinfo/foundation-l