Samuel writes:
What is the scope of these responsibilities? I have heard the term "fiduciary responsibilities" used in Wikimedia circles as a way of shutting down conversation -- thought not for some time -- and as a result I would appreciate a proper definition.
See for example http://en.wikipedia.org/wiki/Fiduciary_duty.
Trusting someone to give good topical advice and trusting them to make good long-term decisions and remain true to their principles are rather different.
Well, sure, but that's why the law imposes fiduciary responsibilities on the Board of Trustees (even the appointed ones). The checks and balances you are concerned about are built into the law itself.
As long as we are using extra quotation marks... the Board is in a position to attempt to "optimize fundraising" by taking on advertising, tying the brand[s] to specific companies, or starting a censorship^B^B^Bcontent safety campaign to make the sites more friendly to potential donor groups.
The Board has always been in the position of taking action that would destroy the community responsible for making the projects as vital and rich as they are. No Board has been stupid enough to do so, and I can't see how the restructured Board would suddenly become stupid enough to do so.
Of particular concern to me is that there is no mechanism for passing extraordinary measures or referenda, no matter how overwhelmingly desired by the collected Wikimedians; and that there is no trusted eminence that could veto board actions in extraordinary circumstances. A simple majority of board members could alter the bylaws however they saw fit, and then do anything at all.
This has always been the case. Nothing about the restructuring changes this.
You have been around for longer than I have, but I have seen my share of good governing bodies that fail to prepare for a future in which they are replaced by not-so-good boards, and regret the results. The way to avoid this is to prepare checks and balances, not to give everyone the benefit of the doubt until something goes wrong -- by when it is often too late.
As a constitutional lawyer, I think about "checks and balances" as a feature of government, not of a nonprofit corporate board. In a government, there are strong arguments for checks and balances (this is a primary topic in the Federalist Papers), but with corporate governance, the checks are primarily external ones (corporate law, the legal system, etc.). If you want to paralyze a non-profit (and almost all of my entire career has been working for nonprofits), by all means ensure that every single action the entity takes is subject to a referendum.
You suggested no limits on what is acceptable for the board to carry out without explicit notice.
Is there a legal restriction that I'm overlooking? Please advise. The Board certainly has to operate within the constraints of the law.
By this reasoning, a future board, after a general discusion about structural change, could alter its composition by 30%, with an arbitrary reshuffling of community, external, voted and appointed seats.
There's a difference between "could" and "is likely to." No one can make policy based on the worst imaginable cases. You have to assume most people will act well most of the time, or this whole enterprise collapses.
--Mike
Mike, Thank you for the elaborated response, and the pointer to [[fiduciary duty]]. I was hoping for specific examples of what that means in the case of Wikimedia, from people who care about it, or who feel bound by it as Board members.
On Tue, Apr 29, 2008 at 11:09 AM, Mike Godwin mgodwin@wikimedia.org wrote:
Trusting someone to give good topical advice and trusting them to make good long-term decisions and remain true to their principles are
rather
different.
Well, sure, but that's why the law imposes fiduciary responsibilities on the Board of Trustees (even the appointed ones). The checks and balances you are concerned about are built into the law itself.
This is a rather omnipotent view of the law. Is there legal remedy for a Board member who makes poor decisions in good faith? I don't think the remedies offered by the law have much overlap with the sorts of checks I have in mind.
A board of sensible, misguied people could easily decide that the best way to pursue the foundation's stated goals is to disallow anonymous contributions, filter all untrusted edits through a phalanx of professionals and long-time members, and require new contribs to be in english and then translate them into other languages after proper vetting and citation.
The Board has always been in the position of taking action that would destroy the community responsible for making the projects as vital and rich as they are. No Board has been stupid enough to do so, and I can't see how the restructured Board would suddenly become stupid enough to do so.
I doubt any board would /knowingly/ destroy the community. They would believe that they were pursuing a greater good that the 'important' parts of the community respected, while destroying the generativity of the community or the consensus and trust that have allowed us to go without significant forks for such a long time.
Of particular concern to me is that there is no mechanism for passing extraordinary measures or referenda, no matter how overwhelmingly desired by
This has always been the case. Nothing about the restructuring changes this.
This is simply an extra reason why having a majority of community-selected members on the board is important. Such popular members may have many faults, but leading the community astray in the hopes of a brighter unwiki future isn't one of them.
You have been around for longer than I have, but I have seen my share of good governing bodies that fail to prepare for a future in which they are replaced by not-so-good boards, and regret the results. The way to avoid this is to prepare checks and balances, not to give everyone the benefit of the doubt until something goes wrong -- by when it is often too late.
As a constitutional lawyer, I think about "checks and balances" as a feature of government, not of a nonprofit corporate board. In a government, there are strong arguments for checks and balances (this is a primary topic in the Federalist Papers), but with corporate governance, the checks are primarily external ones (corporate law, the legal system, etc.).
Wikimedia is not a normal nonprofit. It is unique. It helps steward the work of hundreds of thousands of people producing the modern world's greatest informational masterwork. As noted in another thread, Wikimedia is somewhere between an unassuming non-profit and a small municipality in terms of its the scope of its projects and responsibilities, and the level of direct participation of the project contributors. So I use the phrase "checks and balances" with governmental models firmly in mind. I recommend rereading the Federalist Papers with Wikipedia in mind. (I gave them to a fellow Wikipedian not two years ago with a similar thought; they have only become more appropriate).
If you want to paralyze a non-profit (and almost
all of my entire career has been working for nonprofits), by all means ensure that every single action the entity takes is subject to a referendum.
"Paralyze" is a strong term. Governments are just large, particularly important non-profits, often with military, activist, or frontier origins. Referendum policy is normally set up to avoid spurious efforts... One could require, say, 1000 signatories to initiate one and 80% agreement for it to pass. If this seems like too much bureaucracy, modifications of Board voting procedure allowing for minority blocks to veto decisions in extremis also seem like good ideas. Modifications of the bylaws should /definitely/ require more than the same minimum majority required to pass any resolutions. At the moment, the lack of oversight of the board's actions (see my comments above on their fiduciary duties being insufficient to deter all but the most outrageously poor judgement) is notable.
You suggested no limits on what is acceptable for the board to carry
out without explicit notice.
Is there a legal restriction that I'm overlooking? Please advise. The Board certainly has to operate within the constraints of the law.
So it does. My emphasis is on the "without explicit notice". Legally, the board can do anything it pleases with an announced meeting and ten days' notice. Socially, there should be better layered and more nuanced policies to avoid rash decisions. For instance, a new foundation guideline on how board membership may expand or change in the future, or at least how chanegs will be suggested an announced, would be welcome; and an existing guideline that the Board be composed of a majority of community representatives seems to be eroding, and should be reinforced or explicitly replaced.
By this reasoning, a future board, after a general discusion about structural change, could alter its composition by 30%, with an arbitrary reshuffling of community, external, voted and appointed seats.
There's a difference between "could" and "is likely to." No one can make policy based on the worst imaginable cases.
This is not the worst imaginable case. This is simply what happened last week. (reversing position on the stated use of two seats in order to meet a particular allocation into seat classes, including two new classes of board seats, seems pretty arbitrary to me.)
You have to assume most people will act well most of the time, or this whole enterprise collapses.
I do! Catastrophes rarely occur because people act intentionally poorly. My concerns, even those tagged with the brush of 'corruption', are for failure modes in which everyone is acting in good faith, perhaps stubbornly, but are out of touch with what matters to our projects, and corrupted by the promise that reverting to some stable traditional model is just the panacaea that the problem du jour needs. I have heard such suggestions time and again from many Wikipedia fans and foes alike. I can easily imagine a random cross-section of wikipedia-loving experts holding such misguided ideas. Since Board decisions rarely involve exercising ones own opininos on such matters, a bad mistake might remain just a possibility.
There is a real occurrence of self-selection, especially when a board with some philosophical founder effect selects 40% of its successors; and there are real failure modes favored by such self-selection. Specifically, choosing board members for "non-profit governance" and "fundraising" skills, skillsets similar to those for which many new Foundation staff are being chosen, makes it more likely that the Foundation will develop a blind spot to those changes that would be good for a traditional non-profit or fundraising-seeking org but quite bad for Wikipedia and its sister projects (or their communities).
SJ
Mike Godwin wrote:
Samuel writes:
Trusting someone to give good topical advice and trusting them to make good long-term decisions and remain true to their principles are rather different.
Well, sure, but that's why the law imposes fiduciary responsibilities on the Board of Trustees (even the appointed ones). The checks and balances you are concerned about are built into the law itself.
Not very effective ones, though. Firstly, an uncompensated officer of a nonprofit organization acting in good faith is extremely difficult to sue, due to explicitly granted immunities in various federal and state laws. Even if they breach their fiduciary duty, as long as it wasn't done maliciously or recklessly (or you can't prove that it was), there's not much that can be legally done about it. And secondly, suing a board member in court is a pretty empty threat anyway---even if we somehow could prevail in the suit, it would probably damage us more than them.
Practical checks and balances, on the other hand, can come in the form of internal oversight, policies, and mechanisms for adding a removing members to the board.
-Mark
Mark, I agree. That's, of course, assuming the plaintiffs have standing to sue. Since there's no membership structure anymore, it becomes a more difficult question. Just because the law implies checks and balances does not mean that we can't add our own for good measure.
-Dan On May 1, 2008, at 7:32 PM, Delirium wrote:
Mike Godwin wrote:
Samuel writes:
Trusting someone to give good topical advice and trusting them to make good long-term decisions and remain true to their principles are rather different.
Well, sure, but that's why the law imposes fiduciary responsibilities on the Board of Trustees (even the appointed ones). The checks and balances you are concerned about are built into the law itself.
Not very effective ones, though. Firstly, an uncompensated officer of a nonprofit organization acting in good faith is extremely difficult to sue, due to explicitly granted immunities in various federal and state laws. Even if they breach their fiduciary duty, as long as it wasn't done maliciously or recklessly (or you can't prove that it was), there's not much that can be legally done about it. And secondly, suing a board member in court is a pretty empty threat anyway---even if we somehow could prevail in the suit, it would probably damage us more than them.
Practical checks and balances, on the other hand, can come in the form of internal oversight, policies, and mechanisms for adding a removing members to the board.
-Mark
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On Thu, May 1, 2008 at 7:32 PM, Delirium delirium@hackish.org wrote:
Mike Godwin wrote:
Samuel writes:
Trusting someone to give good topical advice and trusting them to make good long-term decisions and remain true to their principles are rather different.
Well, sure, but that's why the law imposes fiduciary responsibilities on the Board of Trustees (even the appointed ones). The checks and balances you are concerned about are built into the law itself.
Not very effective ones, though. Firstly, an uncompensated officer of a nonprofit organization acting in good faith is extremely difficult to sue, due to explicitly granted immunities in various federal and state laws.
I believe the corporation has to elect to grant these immunities. However, the WMF has. WMF Bylaws Article VIII: "The Foundation shall indemnify any Trustee or officer or any former Trustee or officer to the full extent permitted by law."
Anthony wrote:
On Thu, May 1, 2008 at 7:32 PM, Delirium delirium@hackish.org wrote:
Mike Godwin wrote:
Samuel writes:
Trusting someone to give good topical advice and trusting them to make good long-term decisions and remain true to their principles are rather different.
Well, sure, but that's why the law imposes fiduciary responsibilities on the Board of Trustees (even the appointed ones). The checks and balances you are concerned about are built into the law itself.
Not very effective ones, though. Firstly, an uncompensated officer of a nonprofit organization acting in good faith is extremely difficult to sue, due to explicitly granted immunities in various federal and state laws.
I believe the corporation has to elect to grant these immunities. However, the WMF has. WMF Bylaws Article VIII: "The Foundation shall indemnify any Trustee or officer or any former Trustee or officer to the full extent permitted by law."
Well, it's currently somewhat unsettled, but a number of experts think that the federal Volunteer Protection Act of 1997, though intended primarily to indemnify volunteers against suits by outsiders (e.g. the board of a medical charity being sued if someone dies under the charity's care), is worded broadly enough that it also has the effect of indemnifying volunteers against breach-of-fidiciary-duty suits by the organization itself, with the exception of reckless or malicious breaches. It also explicitly preempts most state laws that would provide less immunity.
In any case, my second point (not quoted above), that in very few cases are we going to sue anyone anyway, is more important imo---the threat of a fiduciary-duty-breach lawsuit is not a very effective tool for keeping the organization on track. That's why we have so many discussions/arguments about tools that actually are effective, such as methods for selecting board members.
-Mark
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