UK Chapter Directors' Powers

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UK Chapter Directors' Powers

Brian Prangle-2
Hi everyone

As promised - here's a discussion on the issue

Jerry proposed a number of scenarios which we discussed:

  1. Full powers. Standard boilerplate text. Easy to do. Downside is that removing powers may require alterations to AoA, and furthermore restricting Directors' powers is quite likely to end up being contentious. Any such process will appear to be a group of members not trusting the Directors.

  2. No powers. Powers need to be conferred explicitly by the Members. This is the current draft. Downside is that it is likely to limit Directors far too much. Such limitation is likely to be particularly troublesome at the outset.

  3. No powers except those needed for Directors to fulfill legal & fiduciary duties. Basically an additional clause added to current draft. This is an attempt to allow Directors to do necessary things but not unnecessary ones. Likely to readily twisted for any purpose.

  4. Full powers limited for a term. As current draft but Directors given full powers until the first AGM. Directors would be expected to propose which powers they need at the first AGM.

  5. Full powers, renewable at the AGM. Again slightly limiting powers & putting onus on Directors to use them responsibly. Downside is that if powers are not renewed then back in same problem area of 2.

  6. Powers need to fulfill obligations & resolution of the members. A variant of 3, but phrased so that if the Membership votes for everyone to have a pony; Directors are implicitly granted such powers as needed to acquire & distribute said ponies.

We eventually came down in favour of  No 5.

We arrived there by rejecting no 1 Full Powers which is the standard template in the incorporation documents, as it went against the results of the initial survey conducted by Rob

We rejected the polar opposite: no 2 No powers as being just too limiting- Directors wouldn't even be able to buy a postage stamp

Next we rejected no 3 Legal and fiduciary duties only, mainly on the basis of being too cumbersome and on similar grounds to rejecting no 2

So it came down to a choice between 4,5 and 6. How to balance the desire expressed in the survey to be member-led with the legal requirements of the Companies Act and at the same time have  an organisation that is not run on the basic premise of not trusting the Directors you've elected?

The arguments were finely balanced but ultimately it was felt that 4 and 6 would make the organisation too inwardly focussed and might act as a disincentive to anyone wanting to take on the work of a Director. So we opted for 5 as requiring the least bureaucratice effort but requiring an active membership and open processes with an implicit assumption that we trust each other  - at least for the first year ;-)

However there was still some discomfort with this ( notwithstanding the standard legal safeguards open to members to challenge Directors'  decisions contained elsewhere in the AoA) so it was agreed that an additional draft clause was prepared to try and encompass the aspiration expressed in the survey. So here goes:

"In exercising their powers Directors shall be expected  to take due  cognizance of the participatory, consensus-driven, open, and collaborative methods and culture of the volunteers of the OpenStreetMap project."

How might this work? Perhaps at each Directors' meeting every item could be tested against this clause and those items that are not administrative and need the attention of this clause should be identified and the Directors acrivate such consultation, discussion etc they feel necessary to reach a decision.


Regards


Brian




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Re: UK Chapter Directors' Powers

David Woolley
On 22/04/16 12:14, Brian Prangle wrote:
>
>     *Full powers*. Standard boilerplate text. Easy to do. Downside is
>     that removing powers may require alterations to AoA, and furthermore
>     restricting Directors' powers is quite likely to end up being
>     contentious. Any such process will appear to be a group of members
>     not trusting the Directors.

Anything other than this suggests to me that there is something
fundamentally wrong in the way that directors are chosen.  All the
others seem to imply that there is a group of members that doesn't trust
the directors ab initio!

It would basically be asking for the directors to be figure heads, in
which case you should have only enough directors to cover for deaths and
loss of mental capacity.

In particular, note that director and manager are two different roles.
If you want people to make the top level decisions, make them directors.
  If you just want them to implement a policy, make them managers.
(Executive directors wear both hats, although, for quoted companies, I
believe that the City prefers there to be some non-executive ones.)

>
>  2.
>
>     *No powers*. Powers need to be conferred explicitly by the Members.
>     This is the current draft. Downside is that it is likely to limit
>     Directors far too much. Such limitation is likely to be particularly
>     troublesome at the outset.

In my view, the only way of correctly representing this is make all the
members directors.  I'm not sure whether there are legal limits on the
number of directors, and some members may be either legally barred from
being a director or unacceptable to people like insurers.

It would put the directors in an impossible position they could face
criminal charges, and/or being banned from being a director, because of
responsibilities that they held, but not have the powers to mitigate the
offences.
>
>  3.
>
>     *No powers except those needed for Directors to fulfill legal &
>     fiduciary duties*. Basically an additional clause added to current
>     draft. This is an attempt to allow Directors to do necessary things
>     but not unnecessary ones. Likely to readily twisted for any purpose.
>

This potentially covers rather a lot of powers.  The core functions are
those normally delegated to a company secretary, although the directors
maintain responsibility.

Also, remember that ultimately, if the directors run amok, the members
will need to take out injunctions in the civil courts.  Unless you
believe they would be prepared to do so, the AoA is essentially
unenforceable.  (Although what is in the AoA also has an impact on the
tax status of the company.)

Also, in an organisation like this, less than 10% of members will take
any role in governance, except for rubber stamping resolutions proposed
by the board.

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Re: UK Chapter Directors' Powers

Rob Nickerson
In reply to this post by Brian Prangle-2
On 22/04/16 12:14, Brian Prangle wrote:
>
>     *Full powers*. Standard boilerplate text. Easy to do. Downside is
>     that removing powers may require alterations to AoA, and furthermore
>     restricting Directors' powers is quite likely to end up being
>     contentious. Any such process will appear to be a group of members
>     not trusting the Directors.

David Woolley responded:
>Anything other than this suggests to me that there is something
>fundamentally wrong in the way that directors are chosen.  All the
>others seem to imply that there is a group of members that doesn't trust
>the directors ab initio!
>
>It would basically be asking for the directors to be figure heads, in
>which case you should have only enough directors to cover for deaths and
>loss of mental capacity.


Hi David, All,

There are a couple of things going on here. We need Directors and cannot avoid that but the concept of having a elected Directors risks sending the message (to our Members) that these as the folks who are in charge and will lead the project. In my view this fails to bring the OpenStreetMap community together (except for the once per year in which we vote in Directors).

The poll we did last year (?) suggested that the OpenStreetMap UK community want to be involved in decision making. My suggestion is that, if this is the culture we want to breed then the Articles should reflect this. I therefore agree that the Directors should be figure heads and we should therefore have as small a number as possible (currently this is set to 5). To me the argument of "Trust" shouldn't really matter. If they are genuine figure heads then they should (in as many cases as possible) be relying on the Members and when the members are fully in control then the matter of Trust kind of disappears.

Currently the Articles state that (assuming my understanding of Special Resolutions is correct):

  1. Directors have all the power
  2. Members can direct the Directors to take/refrain from taking action via a Special Resolution
  3. A Special Resolution requires a general meeting (requiring 14 days notice) and then requires 75% approval to pass.
  4. Alternatively a Spacial Resolution can be a Written Special Resolution. In this case, instead of a meeting you write to the members (can be electronically). To pass 75% of ALL members must accept the resolution.

In my view this is the Directors failing to trust the members (not the members failing to trust the Directors!).

To breed a culture of Member-led organisation (with Directors as figure heads) I suggest:

  1. Directors have all the power
  2. Members can direct the Directors to take/refrain from taking action via a ORDINARY Resolution
  3. Voting on Ordinary resolutions can be opened immediately (not 14 days), be online, and after a period of X days the vote is passed if 50% of those who voted (not 75% of ALL members in the case of the Written Special Resolution) accept the resolution.

This sends a strong message that this is a member led organisation.

I include for comparison the Constitution of the West Midlands Open Data User Group (WM-ODUG). This was a boilerplate template from OneClickOrgs.com, a site that let you set up Unincorporated Associations and managed the Proposals and Voting of members via their online portal - It was a great site but seems to have gone quiet now :-(

The difference is remarkable. It is so much clearer that the WM-ODUG was a member led organisation.

I'm hoping we can move in that direction.

Best regards,
Rob

p.s. Please accept my apologies that it has taken me this long to review the AoA. I received an invitation to edit the AoA on 15 March 2016 (5 and half weeks ago, and just 2 days before March's meeting - which happened to be 1 day before I went on holiday for 3 weeks). I appreciate that the AoA have been worked on by others for longer, but I feel I need a bit longer to review it before rushing ahead.

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Re: UK Chapter Directors' Powers

Rob Nickerson
Draft articles:

https://docs.google.com/document/d/1NbHiUcQjz0SHKlt6BzGp2z_Lo1YH1RmdEZ2kMkpNI04/edit

Rob

On 23 April 2016 at 16:10, Rob Nickerson <[hidden email]> wrote:

To breed a culture of Member-led organisation (with Directors as figure heads) I suggest:

  1. Directors have all the power
  2. Members can direct the Directors to take/refrain from taking action via a ORDINARY Resolution
  3. Voting on Ordinary resolutions can be opened immediately (not 14 days), be online, and after a period of X days the vote is passed if 50% of those who voted (not 75% of ALL members in the case of the Written Special Resolution) accept the resolution.

This sends a strong message that this is a member led organisation.

I include for comparison the Constitution of the West Midlands Open Data User Group (WM-ODUG). This was a boilerplate template from OneClickOrgs.com, a site that let you set up Unincorporated Associations and managed the Proposals and Voting of members via their online portal - It was a great site but seems to have gone quiet now :-(

The difference is remarkable. It is so much clearer that the WM-ODUG was a member led organisation.

I'm hoping we can move in that direction.



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Re: UK Chapter Directors' Powers

Robert Whittaker (OSM lists)
In reply to this post by Rob Nickerson
On 23 April 2016 at 16:10, Rob Nickerson <[hidden email]> wrote:

> To breed a culture of Member-led organisation (with Directors as figure
> heads) I suggest:
>
> Directors have all the power
> Members can direct the Directors to take/refrain from taking action via a
> ORDINARY Resolution
> Voting on Ordinary resolutions can be opened immediately (not 14 days), be
> online, and after a period of X days the vote is passed if 50% of those who
> voted (not 75% of ALL members in the case of the Written Special Resolution)
> accept the resolution.
>
> This sends a strong message that this is a member led organisation.

I agree that having a faster/easier mechanism for the members to reign
in the directors would be a good thing, and would force the directors
to consult the members and only proceed with their consent. However,
I'm not convinced that it would be a good idea (from a company law
point of view) to re-define "Ordinary Resolutions" to achieve this. As
an alternative solution, perhaps we should introduce the concept of a
more informal vote, say an "Online Pole", which members can use to
direct the directors. I would envisage something like this:

* Any five members may request that the directors run an Online Pole
on any matter concerning the way the Company is being run by the
directors.
* On receipt of such a request, a pole will be opened as soon as
practicable, and notice sent to all members.
* Once such a request has been received, the directors must refrain
from taking any action contrary to the pole motion until after the
pole has closed, unless this would result in them being unable to meet
a statutory or prior contractual obligation.
* An online pole closes at midnight UK time at the end of the 7th day
following the day that notice is sent to all members.
* The directors are bound by any motion in an online pole passed by a
simple majority of those voting, unless this would result in them
being unable to meet a statutory or prior contractual obligation,
until such time as the motion is set aside or superseded by a
subsequent pole or resolution.

Alternatively, we could redefine the section on written resolutions
along the lines of the above.

(With the current draft of the AoA, as far as I can see, there's
actually no way for the members to demand a written resolution in
order to exercise their S9 power to direct the directors. So currently
they'd have to call a General Meeting and propose the resolution there
if the directors weren't cooperative. That requires at least 14 days
notice of the meeting.)

Robert.

--
Robert Whittaker

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Re: UK Chapter Directors' Powers

Richard Fairhurst
In reply to this post by Rob Nickerson
Rob Nickerson wrote:
> The poll we did last year (?) suggested that the OpenStreetMap UK
> community want to be involved in decision making. My suggestion is
> that, if this is the culture we want to breed then the Articles should
> reflect this.

I'm the chairman of a community-owned non-profit[1] limited company here in Charlbury. We have recently changed our Articles (for entirely unavoidable reasons). It was a glorious pain in the arse.

I would strongly recommend that the articles should be the most permissive possible. Unless you have paid admin staff, this sort of thing is horrid to sort out. If you've got to the stage of resorting to the articles to resolve member/director conflict, then something went very wrong months ago and you should have dealt with it then.

Besides, there are much more impactful things people could be doing to advance the state of OSM in the UK than faffing around with companies legislation, right?

cheers
Richard

[1] not deliberately, we just don't make any money
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Re: UK Chapter Directors' Powers

Gregory-2
Sorry for replying to the other director-power thread before seeing this more recent one.

The decision made in the meeting seems like a sensible one, and goes with Richard's advise to make the AoA very permissive.

To help the member-led intention, we should perhaps be aiming to treat the directors more as trustees and the ones that can "sign the cheque book" or pass the cheque book to others as needed.

Gregory.

On 25 April 2016 at 14:51, Richard Fairhurst <[hidden email]> wrote:
Rob Nickerson wrote:
> The poll we did last year (?) suggested that the OpenStreetMap UK
> community want to be involved in decision making. My suggestion is
> that, if this is the culture we want to breed then the Articles should
> reflect this.

I'm the chairman of a community-owned non-profit[1] limited company here in
Charlbury. We have recently changed our Articles (for entirely unavoidable
reasons). It was a glorious pain in the arse.

I would strongly recommend that the articles should be the most permissive
possible. Unless you have paid admin staff, this sort of thing is horrid to
sort out. If you've got to the stage of resorting to the articles to resolve
member/director conflict, then something went very wrong months ago and you
should have dealt with it then.

Besides, there are much more impactful things people could be doing to
advance the state of OSM in the UK than faffing around with companies
legislation, right?

cheers
Richard

[1] not deliberately, we just don't make any money



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Re: UK Chapter Directors' Powers

Richard Symonds
In reply to this post by Robert Whittaker (OSM lists)
Rob,

While I understand the thrust you're trying to make towards a more "members have the power" system, setting the bar as low as five members and having a simple "online poll" in lieu of a meeting of the members would have two problems:
  1. Entryism would be almost comically easy. It would be a small matter for myself and four friends to paralyse the chapter by constantly calling votes on anything and everything - for example, calling an online poll on the existence of the chapter. This would prevent them doing anything and everything which isn't a contractual or statutory obligation. It doesn't matter if I don't win, I can just call another one immediately afterwards, and the directors would be unable to stop me. If they wanted to try, I could just call a motion on whether or not they should stop me, which would prevent them from doing so for seven days.
  2. I'm concerned that any poll would be profoundly undemocratic unless carried out with the same rigour as a proper vote, in which case it would be a vote. If a member is on holiday for a week, or if they live overseas, they'll simply miss out - even the quick ones ("Blueys") can take six days to arrive. The 14 days notice period is really important, as is the formality of a vote which is binding on the directors. If the directors are going to be bound by something, that something needs to be properly planned and executed to the highest standards.

Richard Symonds
Wikimedia UK
0207 065 0992

Wikimedia UK is a Company Limited by Guarantee registered in England and Wales, Registered No. 6741827. Registered Charity No.1144513. Registered Office 4th Floor, Development House, 56-64 Leonard Street, London EC2A 4LT. United Kingdom. Wikimedia UK is the UK chapter of a global Wikimedia movement. The Wikimedia projects are run by the Wikimedia Foundation (who operate Wikipedia, amongst other projects).

Wikimedia UK is an independent non-profit charity with no legal control over Wikipedia nor responsibility for its contents.


On 25 April 2016 at 13:12, Robert Whittaker (OSM lists) <[hidden email]> wrote:
On 23 April 2016 at 16:10, Rob Nickerson <[hidden email]> wrote:
> To breed a culture of Member-led organisation (with Directors as figure
> heads) I suggest:
>
> Directors have all the power
> Members can direct the Directors to take/refrain from taking action via a
> ORDINARY Resolution
> Voting on Ordinary resolutions can be opened immediately (not 14 days), be
> online, and after a period of X days the vote is passed if 50% of those who
> voted (not 75% of ALL members in the case of the Written Special Resolution)
> accept the resolution.
>
> This sends a strong message that this is a member led organisation.

I agree that having a faster/easier mechanism for the members to reign
in the directors would be a good thing, and would force the directors
to consult the members and only proceed with their consent. However,
I'm not convinced that it would be a good idea (from a company law
point of view) to re-define "Ordinary Resolutions" to achieve this. As
an alternative solution, perhaps we should introduce the concept of a
more informal vote, say an "Online Pole", which members can use to
direct the directors. I would envisage something like this:

* Any five members may request that the directors run an Online Pole
on any matter concerning the way the Company is being run by the
directors.
* On receipt of such a request, a pole will be opened as soon as
practicable, and notice sent to all members.
* Once such a request has been received, the directors must refrain
from taking any action contrary to the pole motion until after the
pole has closed, unless this would result in them being unable to meet
a statutory or prior contractual obligation.
* An online pole closes at midnight UK time at the end of the 7th day
following the day that notice is sent to all members.
* The directors are bound by any motion in an online pole passed by a
simple majority of those voting, unless this would result in them
being unable to meet a statutory or prior contractual obligation,
until such time as the motion is set aside or superseded by a
subsequent pole or resolution.

Alternatively, we could redefine the section on written resolutions
along the lines of the above.

(With the current draft of the AoA, as far as I can see, there's
actually no way for the members to demand a written resolution in
order to exercise their S9 power to direct the directors. So currently
they'd have to call a General Meeting and propose the resolution there
if the directors weren't cooperative. That requires at least 14 days
notice of the meeting.)

Robert.

--
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Re: UK Chapter Directors' Powers

Rob Nickerson
In reply to this post by Brian Prangle-2
Hi Richard, All,

TL;DR Lets move on and try and ignore that fact that I failed to read up on Company Act before throwing an idea out there!! Onwards and upwards :-)

I had been trying to look at the way we will work on a day to day basis (which I hope will be as a community) and therefore how the constitution (AoA) can best reflect this. As has now been pointed out Company Act 2006 prevents us moving in the direction of the Constitution from the Unincorporated Association that I shared with this list. That's what it is and I'm fine with that. As such (hopefully) the AoA will in no way reflect how we work and we should never have to rely on "Resolutions", "Special" or otherwise.

Yes, the Directors can go it alone if they want to but they would be daft to do this because (i) they won't get elected again, (ii) the members can use the AoA as a last resort, and (iii) most importantly they will be overworked if they try to do everything without the Members help.

I would suggest that we:

* move on with incorporation;
* look at how we can actively involve members in projects and decisions (e.g. Loomio, which I gather the OSMF Directors now use); and
* start thinking about the first few activities we want to achieve.

Finally to address your email - I want Entryism to be "almost comically easy" as we're an open community!! Your example is convoluted (but plausible) but moot given that we're not able to change the AoA as noted above. In regards to polls/votes, I hope we never have need for the "resolutions" in the AoA. I do however hope that we make lots of use of online discussion tools and I'd be in favour of any that include polls. To keep up momentum these would have to be short and snappy so I'd expect them to last little more than a few days for most activities (longer for the bigger topics). They won't be part of the AoA but as noted above the Directors would be daft to continually ignore them especially when they come with the offer of help from a Member.

Now, where were we...

Best,
Rob


-- Richard S wrote: --
Rob,

While I understand the thrust you're trying to make towards a more "members
have the power" system, setting the bar as low as five members and having a
simple "online poll" in lieu of a meeting of the members would have two
problems:

   1. Entryism would be almost comically easy. It would be a small matter
   for myself and four friends to paralyse the chapter by constantly calling
   votes on anything and everything - for example, calling an online poll on
   the existence of the chapter. This would prevent them doing anything and
   everything which isn't a contractual or statutory obligation. It doesn't
   matter if I don't win, I can just call another one immediately afterwards,
   and the directors would be unable to stop me. If they wanted to try, I
   could just call a motion on whether or not they should stop me, which would
   prevent them from doing so for seven days.
   2. I'm concerned that any poll would be profoundly undemocratic unless
   carried out with the same rigour as a proper vote, in which case it would
   be a vote. If a member is on holiday for a week, or if they live overseas,
   they'll simply miss out - even the quick ones ("Blueys") can take six days
   to arrive. The 14 days notice period is really important, as is the
   formality of a vote which is binding on the directors. If the directors are
   going to be bound by something, that something needs to be properly planned
   and executed to the highest standards.


Richard Symonds


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