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.

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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.

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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.

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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”)

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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".

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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.

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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