Talk:Board of Directors

Note: Mnr 18:12, 23 Apr 2005 (PDT) - is refactoring this discussion in a massive way.

= Background: What does FreeGeek want from a Board of Directors? == It would be helpful to have a discussion of the Board of Directors, and how they fit in with FreeGeek's current governing model.

Because a majority of decisions are made by Council via a consensus model, the idea that a Board of Directors should come in and make overriding decisions is not going to be well-received, and contrary to the spirit of volunteer involvement.

However, FreeGeek's 501(c)(3) status requires that we have a board of directors. And that carries with it certain implications, not the least that the BOD is responsible for seeing that decisions are responsible and in the best interest of the corporation. Which also implies that the BOD would have the right/responsibility to last word on any decisions made by Council.

Hence the issue. Council is a decision making body. So is the Board of Directors. We need to have a discussion regarding the roles played by each.

Legal issues
In the Free Geek Bylaws it states two things: 1) "The Board shall manage the business and affairs of the Corporation and shall exercise all the powers of the Corporation as provided by the law and the Articles of Incorporation, but subject to any restrictions imposed by the Act, the Articles of Incorporation, or these Bylaws."

- and -

2) "The Board may by resolution delegate to committees, including an Executive Committee of their own number, or to Officers of the Corporation, such powers and functions as they may designate from time to time."

So according to the bylaws that were adopted at the time of incorporation into a 501(c)(3), the board is responsible for managing the business. In practice, the board has essentially, although not explicitly, delegated that task to the council.

We still have a functioning board that is sufficient for legal issues. However, without an active voice in decision-making, the remaining board members will likely resign due to potential liability issues.

Who needs to have a board? What's this 501(c)(3) stuff?
Free Geek is a non-profit corporation that has a status of 501(c)(3) granted by the IRS.

What this means:


 * non-profit
 * We can make money, but we have to use it for the mission of the organization. There are no owners or investors who can squirrel away the money we make to increase their wealth. Of course, we can still pay people for work done, etc.


 * corporation
 * an organization that is formed among people and recognized by the state. Many people use the term "corporation" to mean "for profit corporation", which isn't completely accurate.


 * 501(c)(3)
 * a status that the IRS grants certain non-profit corporations so that they can give tax deductions to contributors. Typical 501(c)(3)s are "charitable, religious, or educational" organizations. There are strings attached to this status, for instance "it may not participate at all in campaign activity for or against political candidates" . All 501(c)(3)s are corporations by definition.

For the purposes of this conversation it's a given that Free Geek wants to maintain its 501(c)(3) status, therefore its general status as a corporation.

Some definitions of "Board"
There are at least three types of boards of directors:


 * Governing Board
 * This is what the Freegeek board is (at least on paper) -- the folks who make the decisions (or delegate to others the ability to make the decisions) of the organization. There is clearly a legal necessity to have this sort of entity at Free Geek. At Freegeek, they have historically delegated much of their work out to the staff and council.


 * Fundraising board
 * This type of board is a collection of people who are well connected to money and could (hopefully) rake it in to the organization. In the past some of us have wanted this type of board, but we've never really had one. Most independent nonprofits in my experience have a similar "wishful thinking" type board. Some groups that are set up by wealthy benefactors do have boards like this.


 * Advisory board
 * This is a group of folks that don't have the responsibility that the "official" board. Here's a definition I found on that Interweb thingy folks are so excited about:
 * A group of individuals, who offer advice, inform or notify. An advisory board differs from an elected board in that they do not have any oversight responsibilities.
 * This could be a group of people who offer an outside perspective or have professional skills that are underrepresented in the rest of the Free Geek community.

= Discussion of FreeGeek Board = There are several elements that the discussion is focusing around:
 * Composition - who is on the board?
 * Population - how do board members get elected to the board?
 * Responsibilities - What should the board be doing?
 * Rights - How much power does the board have to make decisions?

There are two schools of thought regarding composition:

The "compact" FreeGeek Board of Directors and a non-voting advisory panel
 * A small, as-limited-as-legally-possible governing board (made up of staff and volunteers) that agrees to be selected by the council and an non-voting advisory board that has people with specially desired skills an outside perspectives.

The "large" Freegeek Board of Directors
 * Comprised of a wide range of experienced people, including Freegeek insiders, corporate movers/shakers, Legal, Financial and grantor representatives. All members are part of the voting Board of Directors.

Composition
Freegeek bylaws require a maximum of 11 members of the Board of Directors, minimum of three

Composition of the compact Board of Directors

 * 1) One representative of FreeGeek's Legal Counsel
 * 2) One member with Financial training (CFO, Certified Accountant or other equivalent)

The need for outside influence is addressed by the creation of a separate, non-voting "Advisory Board."

Composition of the large Board of Directors

 * 1) One full-time FreeGeek Paid Staff
 * 2) One "Voting" member of Council
 * 3) One representative of FreeGeek's Legal Counsel
 * 4) One member with Financial training (CFO, Certified Accountant or other equivalent)
 * 5) One representative from each "Major" granting organization (if desired by that granting organization)
 * 6) One representative from "traditional" commercial industry
 * 7) One representative from another non-profit entity in Portland

discussion regarding Composition

 * as i understand it, if a staff member is part of a board of directors, the time spent on that must be volunteer time. i haven't done a lot of reading on the subject, but that's what i have seen. perhaps it varies by state.
 * it seems a good idea to have representatives from granting organizations, as well, but my reservation is the same. they must earn election by the council - not be appointed - and fulfill other responsiblities, such as council attendance and involvement in projects.
 * Mnr 09:18, 11 Apr 2005 (PDT) - The main non-electable position is attached to grantor organizations. If a group is going to give FreeGeek money, then they have a right to voice how it is spent. Remember that our acceptance of funds from an outside source is voluntary. If we don't want them on our board of directors, then we shouldn't accept the funds. oh - and I agree with the other responsibilities - even though they aren't elected through the standard procedure, they are still held to the responsibilities.
 * Mnr 09:18, 11 Apr 2005 (PDT) - the only other non-electable position is from council - the "electability" of a person from that group is left up to council's good judgement.


 * while representation from "traditional" industry and "traditional" nonprofits sounds like it would be good for us (we're such a rising star, might as well learn the language of the corporate firmaments), i don't think it would be wise to compromise what we are (that is, democratic and worker-driven (where "workers" includes volunteers, natch)) for the potential benefit of such guidance. let's outreach to them, but let them know that it is a larger commitment than just bestowing their wisdom; they must also learn from us, and speak as one of us rather than an expert. if they can't dig it, i won't dig them.
 * Mnr 09:18, 11 Apr 2005 (PDT) - True - and I want to emphasize that this is a two-way learning experience. This isn't just a chance for corporate America to come in and lecture the kids. It is a chance to have corporate America see the inside of a functioning workers collective.
 * Revphil 01:03, 19 Apr 2005 (PDT) That sounds great! Other than the implacation recieved when they start what would make this a reality? How about new board members get an "I'm Board" button and a piece of paper with all the things that make us so cool. They sign the paper that says, "I like this, or at least am ok with it, and will help make more of the same!" mnr you can have one too, if you want.

Beginnings of an alternate proposal
There are several types of positions in this proposal that come from outside the current Free Geek community. I think there are better ways to get those folks involved and/or harness their expertise.


 * 1) One full-time FreeGeek Paid Staff
 * 2) One "Voting" member of Council
 * 3) One representative of FreeGeek's Legal Counsel
 * 4) One member with Financial training (CFO, Certified Accountant or other equivalent)
 * 5) One representative from each "Major" granting organization (if desired by that granting organization)
 * 6) One representative from "traditional" commercial industry
 * 7) One representative from another non-profit entity in Portland

The first two types of positions are, by definition, from the Free Geek community as it stands. The next two could be, but also would likely be recruited to be on the board, and the rest are most likely from outside the Free Geek community.

Don't get me wrong. I think anyone we recruited to be on a governing board would come in with Free Geek's best interests at heart. But I do think that to make the final decisions should always be grounded in the community of Free Geek, not coming from outside. By creating a structure that is weighted to non-FG folks, we would be setting ourselves up for a potential split between most of the board and the rest of the community. I have actually seen this played out several times in the food coop movement in Minnesota in the 1980s, so it seems quite a likely possibility to me.

On the other hand, we do want an outside perspective on the decisions we make. Tightly knit communities can become close minded or simply lack the expertise needed to make a good quality decision, and people from the outside can be incorporated to help protect against these problems. The question is, how to do that without giving away the store?

Fortunately, there are several types of boards available to nonprofit organizations, serving various purposes and with varying amounts areas of control.

An advisory board would be a good way to involve many of these folks in Free Geek without giving them free reign to eventually act in a way that the FG community might not want. Members of an advisory board are there to give us advise, not to make decisions. We pick them according to what perspectives and expertise they bring to the organization. We are required to listen to their recomendations, but free to ignore them at our own peril.

An advisory board has some advantages that make it attractive to people we want to involve but who don't want to take on the committments of being fully involved in the more demanding Free Geek work. They avoid the legal liability associated with a voting board, but they retain the "prestige" associated with being on a nonprofit organization's board.

The alternate proposal
I would advocate for a governing board that generally limits its work to: This governing board should be made up entirely of staff and volunteers and elected by the Council. I would also advocate for the founding of an advisory board to integrate the other types of board members that the current proposal calls for.
 * protecting our 501(c)(3) status,
 * keeping an eye on (and preventing) anything we might do that violates the law, and
 * reviews our books.

RfS 09:09, 19 Apr 2005 (PDT)

So, you are proposing two boards? (RevPhil)


 * Yes. A voting board and an advisory board. RfS

Is an advisory board just a vanity board?
Revphil 15:21, 19 Apr 2005 (PDT) - Recieving the glory of "I'm Board" membership sounds good especially without the responsibility of being legaly responsible. But that's me. I wonder if offering a vanity board position is as appealing to others (I guess we shouldn't call it that).


 * I wouldn't call it a vanity board. We really do need advice from:
 * (A) people with an outside perspective (we don't want to become too ingrown), and
 * (B) people with skills that we don't have lots of (like a lawyer, for example).
 * The advisory board would be a valued and useful component of Free Geek. RfS

Mnr 07:09, 21 Apr 2005 (PDT) - I agree that outside influence is useful. But I also agree with The Rev. Phil. in that offering a non-voiced/non-voting position isn't as appealing. Clearly, anyone who is a friend of Freegeek is already prepared to offer any perspectives requested of them - no need for an additional, non-committal group/panel/advisory board. But - that's a discussion for another place...


 * I disagree that this should be discussed elsewhere (see below). RfS

Differences between Advisory and Regular Board
--Revphil 15:21, 19 Apr 2005 (PDT) I have another issue with this arrangement; if we are too protective of our decision making process we will just have more work than we want (or potentially, in legal affairs, are qualified) to deal with. The council meetings are usually adgenda packed. This might change, but until then I do want a seperate group to deal with some issues.

What would the responsibilites of the various groups be?


 * I am not suggesting we add much to the Council's workload. A separate group to review fiscal and legal issues is what the regular board of directors would be. Of course, Council should be aware of this stuff, but shouldn't make scrutinizing the books part of its regular agenda, for instance. -- RfS


 * The advisory board could have pretty free reign over the whole business of Free Geek. That is, they could discuss and recommend anything to the staff, council, or regular board. Without thinking too much about it, I imagine they'd meet a few times per year and be given specific topics that we feel we need input on, though they wouldn't be limited to discussing just those topics. The advisory board members could also be called upon from time to time as needed. For instance if we needed legal advise, we might run it by an attorney that we recruit to be on the advisory board.


 * RfS 08:40, 20 Apr 2005 (PDT)

Move Advisory Board Discussion Elsewhere?
Mnr 07:09, 21 Apr 2005 (PDT) - I'd suggest that the discussion regarding an advisory board be placed elsewhere on the wiki. An advisory board is a possible way to bring in outside influence - but by definition, doesn't have anything to do with the rights and responsibilites of the board, and is only one of many alternatives to a "large model" population of the board. We can have a discussion on the role of an advisory board. The point of the discussion concerning the board of directors is: What is the role of the board of directors?


 * But the presence or absence of an advisory board affects the makeup of a legal board. It's hard to address one without the other.


 * If the legal board is the place where, we're plugging outside lawyers and accountants into Free Geek then there's less of a need for an advisory board. Conversely, if we don't plug those folks into our legal board, we pretty much need the advisory group.


 * The advisory board idea is a way to address a flaw in the original proposal, namely that we don't want people outside the Free Geek community to have the legal authority to call the final shots (even though we do want their perspective, advice, and input). Discussing it is part and parcel of the overall board discussion. RfS

Mnr 09:50, 21 Apr 2005 (PDT) - The Board of Directors discussion seems to be following two main thoughts:
 * 1) - what decisions should the FreeGeek BOD make?
 * 2) - who should make them?

In regards to the 2nd point, the "large" proposal suggests that the decision-making body should be a wider representation of opinions. The "compact" proposal suggests that the decision-making body be as small as possible.

The Advisory panel is then added as an extra proposal for seeking opinions. Advisory panels are one method for doing this but outside opinions can be solicited in many different ways (Focus groups, 1x1 meetings, surveys, conferences). The Advisory panel (or focus group, or surveys, et al) can be accomodated no matter what BOD model we settle upon.

I believe that discussing both at the same time obscures the original BOD discussion.

Population
Let's make board more democratic, more answerable to the community. In other orgs, democratic process of membership selects the board. (KBOO, food coops...) FG lacks that structure (regarding the board.)
 * i don't like the idea of non-electable positions; the concept does not jibe with what i believe freegeek is.

"The board is currently elected by members of the board. In the past, board members have been invited by Oso. - Mnr"

Council should put forward a staff and a volunteer as candidates.

"To clarify, we discussed having at least one staff and one volunteer on the board - the rest of the members could be otherwise (according to at least  one section of the bylaws, we must have 3 members on the board).  I think that we should consider requiring a non-staff/volunteer to fill that third position in order to guarantee an outside perspective." - Shawn

Current board members should stand up if they want to be "re-elected."

New members should be run through both Council and Board for approval.

Wes: can we set up checks and balances?

Pete: Richard, can you clarify the following from what you just said: --Halfasspete 12:14, 18 Mar 2005 (PST)

1. If we elect them, does that mean we can un-elect/impeach them?
"Richard: well probably not, but there would be regular election cycles, so incumbents might get replaced.)"

"The bylaws, Section 10 state that the board can elect to remove members from the board, but it does not grant that right to employees (or volunteers) - Mnr"

In the discussion at the council meeting, I didn't even think about how the council (volunteers, staff, etc.) would remove an existing board member. My understanding is (as MNR points out) that the board actually does this itself, much like the board (currently) selects its own new members. There are terms that board members serve, however, and if the current board were to resolve to have future members of the board come from council nominees, then board members could be rotated out just by not renominating them. rfs 16:03, 18 Mar 2005 (PST)

2. Is it possible such structural changes might threaten our 503(c)(3) status?
"Richard: Don't think so, as long as we don't change mission statement or bylaws."

"We would need to change the bylaws, but this can easily be done. - Mnr"

Actually there are two approaches here. See below.

Richard: we don't want to exclude people who want to serve.

Another idea for repopulating the board
About Council representation:  I would like to see a permanent board seat allocated to the person who is facilitating the council meetings each month.

A practical problem with that: by current convention, the facilitator is chosen each month, and is generally not the same person. Would the "board seat" be a rotating position? --Pete 23:38, 30 Mar 2005 (PST)

It's up to Council to decide how to delegate that representation - the board doesn't/shouldn't care. The only rule is that the council representative attending the board meeting needs to be a "Voting" member of Council - i.e. Attended enough consecutive council meetings to be able to vote at council. -- Mnr 13:13, 31 Mar 2005 (PST)

About the makeup of the rest of the board:   I think we should look at other local non-profit organizations to either set up interlinked board positions or to tap into the organizations of those non-profits for potential board members. We can compile a list of people willing to serve that have a broad range of non-profit experience and allow the board and council chose from the list in an election based on a brief bio of each candidate. --DMB 14:21, 22 Mar 2005 (PST)

Implementation thoughts: Two approaches to changing board selection
There are basically two ways in which things can change. These two ways are not necessarily incompatible.


 * Amending the bylaws
 * This requires that the current board announces a proposed amendment will be discussed at one of their meetings and then, at that meeting, approves the proposal. A change to the bylaws is a fairly major decision and generally reserved for long term changes. I think it might be a little more likely to affect our 501(c)(3) status, but mostly only if it changed the nature of the business we were doing.


 * Resolution of the existing board
 * Rather than change the bylaws, the board can resolve to do something. For instance, at the board's first meeting (?) it voted to operate by consensus. (You will notice that the bylaws don't mention the use of formal consensus as a decision making method.)

Example and caveat
For a hypothetical. Let's start by looking at the bylaws. Section 4 of the bylaws (Election Procedure) simply states:


 * At each annual meeting of the Board, the successors to the Directors whose terms expire that year shall be elected.

Let's say that before the next annual meeting, the current board resolved to limit its pool of new Directors to nominees from Free Geek's council. This doesn't contradict the current bylaws in the least. Alternatively (or even afterwards) the board could change the bylaws and add language to the same effect.

However, I see one caveat here. If the council is to nominate or even elect members to the board, then it would seem that a formal legal document like the bylaws would need to define what the council is, adding a section onto the bylaws. It might be advisable to add in definitions of the staff and volunteers as well, since these groups make up the council, but are not mentioned anywhere in the bylaws.

RfS 17:22, 18 Mar 2005 (PST)

Responsibilities

 * Legal Review and advice
 * Financial Review and advice

Mission is a third responsibility
After reading up on the board discussion, I'm going to jump in here. I would see the essental coponents of the legally required board of directors as taking care of financial oversight, legal oversight and mission and vision of the organization. The first two have been touched upon, but I personally think the third item, mission focus is important here.

[Post by Jeff Kane] To put it another way, the board needs to make sure freegeek is attentive to it's mission. I would put forth this is the most important item of non-profit organizational effectiveness and governance. As it has been mentioned that the council is pretty good at operational governance, then the Board could focus on mission governance. Perhaps a make believe illustration would flesh this out. Let's say that Freegeek begins to take on another large consulting project (yes I know this is unlikely but just pertend for a moment). It looks like the council is begnning to plan the operational implimentation of this new project but this is a case where a board would need to advise and work with the coucil and ask the important question, 'is this the correct strategic' direction for freegeek to head in now... Does it further our mission etc'. Since it could be very difficult, it could have negative financial impacts, time impacts that take away from other valuable ways in which freegeek further's it's overall mission, then in this case I would suspect that a governing board would nicely say that this isn't something that freegeek should undertake from a strategic standpoint. Additionally, since the board can delegate the operational decisions to the council, that really frees them up to take a good hard look at these planning and strategic questions. One way to look at a non profit board is a group that spends 95% of it's energy in long term, strategic planning that will help the mission of the organziation.

How about External Fundraiser resources?
Revphil - I dont think anyone has a problem with the board raising funds, but what im concerned about is board costing FREE GEEK time. With only 2 active board members (right?) to have a board means we have to rebuild the board. Last time we tried to bring in new "connected" board members we got fed up with the process and decided it was easier to spend our efforts fundraising ourselves. Maybe this is because we live in a town with lots of powerful nonprofits. Im not damming the process, but last time was really frustrating, and I would hate to see recources wasted.

Specifically we (Oso, myself and others) tried to get some big players to join our board for their schmoozing potential. We organized a few high-class social functions with wine and cheese and invited lots of connected Portlanders (I was asked to keep myslef DL, for the good of the geek). I dont think we got much in the way of money (maybe enough to cover some costs, but not time) and we didn't get any new board members

Mnr - I don't recall those wine/cheese events actually happening. In any case, we should figure out why they didn't attract the desired crowd, correct course, and try again.


 * I think these kind of folks should be on an advisory type board, not a governing type board. RfS

mnr suggests some responsibilities

 * Committment to attend at least two council meetings during the upcoming year
 * Committment to attend at least 75% of regular scheduled board meetings (a current responsibility?)
 * Advocacy and assistance in at least one new or ongoing project at FreeGeek

How about Fiscal review?
My observations of the board meeting is that the most valuable function that the board plays is a monthly review of finances. The review prompts someone (Oso) to clean up the financial statement at least once a month, and discuss. That alone is a valuable exercise.

In addition, board members contributed perspectives from other situations or experiences. This helped identify trouble spots or situations looming in the future.

The board could have done better - The finances at Collab Tech come to mind. The sudden turn southward happened during a lapse in regular board meetings - and probably would have been caught had those reviews taken place.

I think it would be good to have an experienced group of business owners take a hard look at the numbers. - Mnr

About the Collab finances, my recollection is that at one board meeting we were told of a $12K overrun (not good, but we expected to loose money on the first project) and then at the very next meeting the overrun jumped to over $50K.

I strongly feel that the board needs to review finances regularly in order to provide an external set of eyes to gauge the ongoing viability of the FREE GEEK mission and to verify that the financial data is kept current. - DMB

Rights

 * The BOD can override Council on financial decisions, including the creation of new paid staff positions (a current right?)
 * The BOD can override Council on matters of legal decisions (a current responsibility?)

How about Something Else?
I think we should not change the structure of the board. The board functioned fine for several years until the Collab Tech fiasco burned everyone out.--DMB 13:49, 22 Mar 2005 (PST)

Dont you think it would be useful to limit the scope of the board somewhat? having the potential for a board decision that conflicts with a council decision makes me feel funny... bad funny. It seems to me that some sort of "checks and balences" type system is in order, so that the democratic nature of FREE GEEK can continue. It works great for our federal government, right? ... right? [crickets chirping] --Revphil 01:31, 19 Apr 2005 (PDT)

= buffer = The following is just flotsam to clip and paste

Positions that require presentation
The "large" proposal suggests that annually, anyone wishing to fill an electable position on the Board of Directors should present themselves to the Board of Directors.
 * Presentation to the Board of Directors must be done no later than February 1st
 * Candidate should be prepared to appear at March council meeting for Question and Answer
 * Sitting Board of Directors and Council will vote on new/returning Board of Directors by end of March.
 * New, and returning, Board of Directors to be inducted during April BOD meeting.
 * Anyone is eligible to present themselves for consideration.
 * Part of presentation is to declare what position on the board of directors they will fill. If only one candidate is available for a required position, that person is automatically appointed.
 * Candidates must be qualified for the position they present themselves for.

Positions that do not require presentation

 * Council representative is appointed by council, and is not required to "present". Council may choose whatever method they deem appropriate to assign a representative to the board
 * Representatives from granting organizations are appointed by the granting organization. These are not electable positions, nor do they require approval by either the Board or Council.