[Foundation-l] Notice of the results of the WMF Board of Trustees election

[Ray Saintonge]

Michael Snow wrote:

>Part of the reason for structuring nonprofits on the model of 
>corporations is that certain corporate law principles transfer quite 
>usefully to the nonprofit setting. For example, in a member-based 
>nonprofit the members are largely analogous to shareholders in a 
>corporation.
>
When I was saying before about Wikipedians woefully lacking knowledge in 
many parts of the law, corporate law was foremost in my mind.

>One of the basic functions of a corporate structure is to limit the 
>liability of ordinary shareholders or members. Generally speaking, the 
>limitation is pretty thorough; shareholders or members are not liable 
>for the acts of the corporation, only their own. Hence Florida Statutes 
>§ 617.0604 (1), which is specifically about nonprofit corporations: "A 
>member of a corporation is not, as such, personally liable for any act, 
>debt, liability, or obligation of the corporation." (Please nobody get 
>confused by "personally" here. A formally organized chapter is a legal 
>person, so all else being equal, a chapter as a member of the Wikimedia 
>Foundation should have no greater liability under Florida law than an 
>individual member.)
>
The guiding principles here are not restricted to just Florida and 
United States law.  Nevertheless, it is not unusual for people to 
develop the protection provided by a corporate, and then put up their 
home as collateral for a risky loan taken out by the corporation.

It commonly happens that Wikipedians will look to WMF for answers that 
the WMF should not be giving, lest it thereby paint itself into a legal 
corner.  The requests are generally made in good faith, but fail to 
grasp fundamental notions about determining responsibility for a statement.

>In the for-profit context, "ordinary" shareholders are distinguished 
>from "controlling" shareholders, so you are right to focus on control as 
>an issue. But I think treating "alone or in concert with others" as 
>equivalent is a seriously mistaken analysis. Instead, the difference is 
>essential to understanding what it means to have control. Control 
>involves being able to dictate the activity of the corporation, not 
>merely having a voice in its operations. A person or entity would 
>qualify as a controlling shareholder if they're a majority shareholder, 
>or if some aspect of the corporate ownership structure gave them 
>majority voting power over the decisions of the corporation at the 
>highest levels.
>
I agree as far as liability for WMF acivities go, but chapters will 
often be incorporated under their own national law, and should be 
careful not to adopt structures that will come back to haunt them.

>...
>
>This is one of the reasons my suggested structure for chapters 
>functioning as members of the Wikimedia Foundation would specifically 
>avoid putting chapters - or any selection process - in a position to 
>"control" the majority of the board. Three community-elected seats, 
>those filled in the just-concluded election; three seats selected by the 
>actual membership of the foundation; three appointed seats, to allow for 
>outside perspectives or fields of expertise that aren't adequately 
>represented. There would be no danger of the chapters controlling the 
>board, even collectively (and the chapters are very clearly independent 
>of each other). This proposed system is designed to foster checks and 
>balances between the groups as necessary.
>
I can't make a quick statement about whether I agree with this or not.  
Originally one of the two elected members would have depended on a 
membership that required more than just editing, but that idea never got 
off the ground.  We already have procedures for community elected and 
appointed Board members so there's no need to address these for the 
moment.  There will be a need to define just what would qualify as a 
member chapter.  There is a range of options available from one country 
one chapter without regard to size and influence to having larger 
countries have multiple chapters.  Those questions need to be sorted out 
before we go too far with this.

Ec