[Foundation-l] Provisional Volunteer Council - proposal sent to the Board

[Geoffrey Plourde]

What if this Volunteer Council has no real offficial standing and solely regulates the Community? No tax problems, right?



----- Original Message ----
From: Mike Godwin <mgodwin at wikimedia.org>
To: foundation-l at lists.wikimedia.org
Sent: Tuesday, April 1, 2008 11:32:23 PM
Subject: Re: [Foundation-l] Provisional Volunteer Council - proposal sent to the Board

Florence writes:

>  Can you give us a little bit of feedback on the issue ?
>
> Let's say... if the board was to decide on a dual governance between a
> "board of trustees" and a "program council", what would the legal
> comment you would provide ?


I'd have to research the issue at some length to give you a full and  
reliable answer. That could take a significant amount of time.  But,  
speaking very generally,  I can give you some worst-case scenarios, if  
you're worried about risks.  For example, American corporation law  
commonly prohibits boards of directors (or boards of trustees) from  
delegating certain board-specific functions and duties outside of the  
board.  Alternative structures are sometimes possible (especially if  
designed into the corporation at the beginning). But to transmute the  
current Foundation governance along the lines Florence suggests might  
require dissolution and/or reincorporation of the Foundation, transfer  
of assets to the new entity, and other complications, including  
reapplication for tax-exempt non-profit status (perhaps in another  
state).  It might also affect long-term gift commitments (the new  
entity might have to reapply for grants already committed to the  
former entity, for example).  I'm not saying all this (or any of this)  
would necessarily happen, but I believe the risks of fundamental  
governance change deserve serious legal study in addition to  
philosophical debate.

All of the risks may be worthwhile, of course, to craft a new  
governance structure if it is generally believed that the Foundation's  
current governance structure is fundamentally broken.  But  
corporations, including NGOs and charities, are essentially legal  
creations, so the legal questions *always* need to be addressed if  
you're trying to figure out what is possible, or how to fix a broken  
corporation, or if you're trying to solve any other corporate problem.

I think the best place to begin, when one is considering corporate  
governance issues, is to precisely define the problem you want to  
solve.  Once you define the problem (or problems), you then research  
what solutions are legally possible in the corporate-law framework  
you're working with.  It may be possible that the problem is fixable  
without any governance structure changes (e.g., by electing or  
appointing new Board members to replace current ones, or in addition  
to current ones), or by relatively minor bylaws changes.  Or they may  
require a fundamental restructuring of the corporation (which, as I  
said, is carries certain risks).

At the beginning of these discussions on foundation-l, I assumed that  
the upcoming meeting in Amsterdam was aimed at defining what problems,  
if any, exist. But now the discussions seems to have shifted to an  
assumption that there's a problem that requires a governance-structure  
change to fix.  If that is the case, then we need to begin work now on  
making sure the problem is fully defined, so that the Board can  
consider whatever structural changes may be required to address the  
problem, in full compliance with the law.

I could say more, but I feel that have gone on at (somewhat boring)  
length already, so I'll do the prudent thing and end this e-mail.  
Thanks for listening.


--Mike






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