Background: What does Free Geek want from a Board of Directors?

Basic discussion of 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. Corporations, of whatever type need to have some sort of board of directors -- those responsible for the corporation's activites.

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" [1]. 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

There are several types of boards, for example:

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.

Types of governing boards

This section is meant to categorize the general activities of governing boards for nonprofit organizations. There are several types. Some of them exist mostly on paper. Some wield all the power. There are many in between. Given a traditional (heirarchical) model and the existance of a staff, some typical examples are:

"Rubber Stamp Board"

The founder of the organization gathers together some folks to be on a board. The founder becomes the executive director (ED) and hires a staff. The ED and the staff make all the decisions, and the board meets as necessary and follows the lead of the ED / staff. This board could take over the leadership of the organization, but instead chooses to exist merely as a legal necessity -- nothing more.

"Managing Board"

The founder starts the nonprofit and becomes the chairman of the board. He recruits other board members and they hire an ED who in turn hires a staff. The board has subcommittees that mirror the organization as a whole and drives all the major decisions. The staff is left to implement the board's decisions and is overseen by the ED.

"Oversight Board"

Somewhere between "Managing Board" and the "Rubber Stamp Board". The staff and ED make most decisions, but the board reviews those decisions and sets longer term goals. This type is probably what matches Free Geek's historical board most closely, but not exactly (see below).

I hope the above definitions help define a continuum of options and a vocabulary that lets us discuss them.

The legal heirachy

Most organizations, non-profit and otherwise, have a structure that looks something like this:

Governing Board

Executive Director (ED)

Staff

That is, the board hires an ED, who in turn hires a staff, who in turn run the programs (by recruiting volunteers, etc.). This is a legalistic chain of command -- not necessarily how things play out in normal day-to-day decisions.

At Free Geek we legally have something like this (at present):

Governing Board

Staff Collective

Paid Interns

That is, we have no ED, and the collective encompasses all the staff (except the paid interns). But a legal heirarchy persists in that the board could choose to hire, fire, etc. (even though they don't in practice do that -- they delegate it to the staff collective instead).

Membership elected and self-selecting boards

These terms refer to how the board members are selected.

Membership Elected Board

A membership elected board is a board that is chosen by the membership of the organization, for instance the community radio station KBOO is a 501(c)(3) that has a large membership comprised of the many listeners who send in a yearly contribution. This membership criteria is spelled out in their by-laws. Every year (IIRC) they hold a nomination process and an election for board members. Even though the board is still in charge and legally responsible for the organization, the membership elections give a measure of democratic control over the board. Other nonprofits that have this type of structure are most food coops and credit unions. In order to have this type of board, a membership needs to be legally defined in the by-laws.

Self-Selecting Board

A self-selecting board is one that chooses its own membership. This makes the by-laws simpler. In practice, many self-selecting boards have their memberships recruited by the existing board, the ED, and the staff. But the decision as to who is on the board is made by the board itself. This is what Free Geek has now.

Decision making terms

How does a board make its decisions?

Voting or Majority Rule

Most boards in most organizations use some form of majority rule to make their decisions. A member makes a proposal. There is discussion and maybe the proposal is ammende. Then the members take a vote.

Consensus

At Free Geek decisions are madde by consensus. The process of formal consensus does not use voting per se. Instead when a proposal is under discussion it is ammended and changed to address members' concerns until everyone agrees to enact the decision. If agreement can't be reached, no decision is made. (See the consensus howto for a more detailed explanation.)

Governing Board vs Voting Board vs Legal Board

When people use these terms they probably mean the same thing. For example an Advisory Board does not have legal authority over the organization, but a Governing Board does. The problem with using the term Voting Board is twofold:

1. We don't vote. We use consensus. The term is therefore inaccurate.
2. Even if you want to take the lazy shortcut and say that the process of reaching consensus can be called "voting", all the groups in question do this. (For example advisory boards, committees, staff collective, governing boards, etc. all presumably use approximately the same consensus process.) The term therefore doesn't specify what differentiates a "voting (governing) board" from anything else.