[treasurers] WMF governance/accountability/transparency

Wed Jan 4 13:33:01 UTC 2012

Hi,

On the topic of the audit subcommittee, I am interested to learn if
any other chapters have similar, functioning bodies?  Setting up some
form of expert reference group for audit and expenditure matters has
been on my "to do" list for quite some time.  The WMF's audit charter
has given me some ideas of what I'd like to see, but the WMF is set up
quite differently from us and I'd like to pick the brains of other
chapters and bodies who have gone through the process.

Cheers,
Craig Franklin

On 21 December 2011 08:29, Stuart West <stu at wikimedia.org> wrote:
> To begin sharing ideas and best practices, let's start threads on
> the governance/accountability/transparency practices at each
> of our organizations. I'll go first with my views on the
> Wikimedia Foundation. A few others from the WMF are on this list too. Please
> add new thoughts or help answer questions!
>
> I want to thank Thierry for his note to Foundation-l in late August
> covering many of these issues for Wikimedia France. That was fascinating for
> me and helped inspire my interest in this list. Thierry, maybe you could
> update that email and send it around to this list on a new thread?
>
> This will be long, and may be repetitive for many of you. But I think it
> is important to share a thorough overview. It would be great if others could
> aim for the same level of detail / section headings when introducing their
> own organizations.  I'm really interested in learning from what you all are
> doing.
>
>
> WMF Overview
>
> The Wikimedia Foundation is a U.S.-based non-profit corporation created
> in 2003. It received tax-exempt status in 2005. Its primary governing
> document is the bylaws at http://wikimediafoundation.org/wiki/Bylaws. The
> Foundation is the holder / owner of the trademarks, including Wikimedia
> and Wikipedia, and the operator of most of the websites used by the
> projects.
>
> Governance
>
> The Foundation’s governing body is its Board of Trustees. As a U.S.
> non-profit, the Foundation has some flexibility setting size and composition
> of its Board. We decided in early 2008 to have 10 members. The
> editing community (mostly) elects three seats in odd years (e.g. 2009,
> 2011). The Chapters as a group appoint two seats in even years (e.g. 2010,
> 2012). The founder seat is for Jimmy Wales. The Board itself appoints the
> four remaining members to bring necessary expertise to the Board.  Board
> member serve for two years terms.
>
> With appointed members, we attempt to identify gaps between the
> existing membership and the skills we need to fulfill our duties. For
> example, the Board identified financial, auditing, and organizational
> governance experience as an important skill to have. Since we have not
> typically found that in the community elected/appointed members, the Board
> sought out someone with that background. That’s me.
>
> Not all Board seats have been filled at all times, but we currently do have
> the full 10 members. There's a lot of work to do, and a lot of perspectives
> to consider, so having a full Board is really good.
>
> Each year at Wikimania, the Board elects four officers: A Chair,
> a Vice-Chair, a Treasurer, and a Secretary. A few years ago we
> wrote detailed definitions for three of those roles:
> http://wikimediafoundation.org/wiki/Chair,
> http://wikimediafoundation.org/wiki/Treasurer, and
> http://wikimediafoundation.org/wiki/Secretary. The Vice-Chair role is mostly
> to be backup to the Chair and is typically included on all communications
> with the Chair.
>
> We try to have different trustees in each officer role. Last year I was
> both Vice-Chair and Treasurer. It got to be too much work for one person,
> though, and we are sensibly back to one-person, one-office this year.
>
> It can sometimes be challenging to have everyone focus on something at
> the same time, so we’ve experimented with another informal role
> of “whip.” That's a term I’ve heard in U.S. and U.K. politics to
> describe someone who is responsible for collecting votes, keeping us on
> schedule, etc. We’ve had mixed success with that role, though. It's hard for
> someone to always be the “bad guy.”
>
> The Board has delegated duties to three formal Board committees: an
> Audit Committee which I chair, a Human Resources
> committee responsible primarily for evaluating the Executive Director
> and for overseeing compensation, and a Board Governance
> Committee responsible for assisting in governance matters. We've only
> written a formal chatter for the Audit
> Committee (http://wikimediafoundation.org/wiki/Audit_charter) but I wish we
> had more because it is really helpful to set clear expectations.
>
> The Audit Committee was, at first, quite small and comprised mostly of Board
> members. But we found that fairly few trustees from the community had both
> the experience and the time to focus on its work. So for the 2009-2010 year
> we switched to a model where one trustee leads the Audit Committee (me), and
> then we reach out broadly to the community for members.  We've had great
> success with that model, and continue to have really valuable participation
> from community members. Membership history is
> at http://wikimediafoundation.org/wiki/Audit_committee. The Board's Chair
> and the ED sit in on meetings.
>
> Because of early investments in movement-wide fundraising, the Board
> has been able to hire a staff. It no longer plays an operating one. We do
> not get involved day to day in the operations of the foundation. We do not
> hire staff, other than the executive director. We do not interact with staff
> in a governance or management role, though we do often in community work.
>
> The Board really has two primary duties: fulfill our governance
> obligations and hire/evaluate the Executive Director. Most of us also view
> us as having an additional less-defined but really important third role as
> one of the movement-wide leadership/decision-making bodies for Wikimedia.
>
> All Board members are volunteers. The time commitment is less than it
> used to be but is still quite significant. I estimate it's about 5 hours a
> week just for board work (excluding editing/community work), plus 10-12 days
> of meetings/travel each year. The Board meets in person three or four times
> a year and on IRC a few more times a year.
>
> We maintain a Board manual with lots more
> information at http://meta.wikimedia.org/wiki/Board_manual. We use this
> regularly as a reference for ourselves. We also use it to introduce
> potential new trustees to the role.
>
> Finance/governance/legal staff
>
> Currently we have a chief of finance and administration (Garfield Byrd),
> a Controller (Tony Le), and a small finance staff. We also have a
> General Counsel (Geoff Brigham) and a small legal staff. More details on
> staff are at http://wikimediafoundation.org/wiki/Staff_and_contractors.
>
> Transparency
>
> The two primary vehicles we use for transparency are the
> Foundation’s website at http://wikimediafoundation.org and of course Meta.
> The staff publishes activity and technology reports each month
> at http://meta.wikimedia.org/wiki/Foundation_reports. The staff also
> publishes semi-annual financial reports and government
> filings at http://wikimediafoundation.org/wiki/Financial_reports. The
> Board publishes its minutes
> at http://meta.wikimedia.org/wiki/Foundation_reports and its resolutions
> at http://wikimediafoundation.org/wiki/Resolutions.
>
> Financial audits
>
> In the U.S., independent auditors focus on the financial statements
> and controls behind them, testing management's draft results against
> transaction records and against U.S. GAAP. The WMF's Audit Committee has
> engaged the San Francisco office of global auditors KPMG in 2008.
> Previously, the WMF had worked with a small Florida auditing firm called
> Gregory, Sharer & Stuart. KPMG's latest audit
> is at http://upload.wikimedia.org/wikipedia/foundation/a/ac/FINAL_10_11From_KPMG.pdf.
> Like many U.S.-based non-profits, our fiscal year ends on June
> 30, mostly because it’s cheaper to get auditors in the off-cycle and it
> gives more time to catch up on end-of-year fundraising paperwork.
>
> Government regulation
>
> The primarily federal regulator of non-profits in the U.S. is the
> Internal Revenue Service, which grants non-profit status and requires
> annual public filings of our activities. This Form 990 is due about nine
> months after the end of our fiscal year and the WMF usually file in March or
> April. The most recent Form 990 is
> at http://upload.wikimedia.org/wikipedia/foundation/1/1c/WMF_2009_2010_Form_990.pdf.
> The WMF is also subject to the state laws of Florida (where
> it is incorporated) and California (where it is headquartered). There
> are also registration requirements around fundraising in many of the 50
> states in the U.S.
>
> Mission oversight/planning/accountability
>
> The financial audit and IRS filings cover financial reporting, controls,
> and transparency. They do not substantially address whether the
> Foundation's activities are consistent with the mission. IMHO, no one from
> outside our community could have a big impact in this role.
>
> So this duty falls to the Board. Here's a summary of the framework we use.
>
> First, a few years ago the Board commissioned a five-year strategy plan
> to identify top focus areas. We did this through a fantastic
> community-driven process. The result was the plan
> at http://strategy.wikimedia.org/wiki/Wikimedia_Movement_Strategic_Plan_Summary,
> which continues to be a guide on priorities and objectives.
>
> Second, each year in the early Spring the Executive Director and her
> staff put together an annual operating plan. The ED typically gives the
> Board a high-level summary of her thinking sometime in January or February.
> The she and her team prepare a detailed plan. As Treasurer, I review this
> thoroughly with the ED and give extensive feedback both on high-level issues
> and, since I have experience budgeting, on planning issues.
>
> Third, we then have a series of increasingly detailed reviews with the
> full Board. We typically focus on whether the high-level objectives of the
> annual plan are a) consistent with the mission and the strategy plan and b)
> achievable. We each try to reach out to people in the community to collect
> feedback/ideas as part of our reviews. As Treasurer, I give my
> recommendation to the Board on the plan. Then we have a vote. Typically, the
> Board approves the annual plan in late June and the staff publishes it
> around the July 1 beginning of our fiscal year. The plan for this year is
> at http://upload.wikimedia.org/wikipedia/foundation/3/37/2011-12_Wikimedia_Foundation_Plan_FINAL_FOR_WEBSITE_.pdf.
>
>
> Finally, each year the Board reviews the performance of the
> Executive Director against the mission objectives/deliverables laid out in
> both the annual plan and the strategic plan.
>
> Wrap-up
>
> OK. That's all i can type today. Thanks for your patience with the long
> note. I wanted to get us all off to a good start on sharing different
> approaches on these issues. I’m happy to answer any questions. And I’m
> excited to hear similar overviews for other organizations. Who's next?
>
> -s
>
> ps -- In case others are interested, I’ll cross-post to my blog wikistu.org
> when I have a chance.
>
> ===============
> Stuart West
> Board member
> Wikimedia Foundation
> stu at wikimedia.org
>
>
> ===============
> Stuart West
> Board member
> Wikimedia Foundation
> stu at wikimedia.org
>
>
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