Forum:Change to the structure of Weird Gloop board
I wanted to inform everyone about a change we are planning to make to the governance structure of Weird Gloop.
TL;DR: we are changing the official designation of the elected board members from "director" to "guarantor" (or "member"). This solves some pressing problems.
For background, Weird Gloop is a "limited by guarantee" company in the UK. LBG companies have two important classes of people associated with them:
- Guarantors (also known as members) that guarantee a nominal liability (usually £1) in case the company shuts down and owes money. In a lot of cases, this is the "rank and file" of a group -- some clubs or other organizations have thousands of members. The company has a duty to act in the best interests of these members, and the members are ultimately "in charge" -- in general, a majority of members can dictate the direction of the company, either by hiring/firing directors, or just passing resolutions on their own.
- Directors, who are responsible for the operation of the company. Directors have a legal obligation to run the company honestly, and there are certain requirements to be a director of a company in the UK (for example, you cannot have been convicted of a crime involving dishonesty). Weird Gloop currently has 8 directors, who are elected by the community. Gaz and I manage things on a day to day basis, and the others are mostly in a supervisory role.
Let me explain the problem we're facing:
In the last year or two, the UK government has been stepping up anti-money-laundering regulations. As a result, organizations that provide services to companies (banks, registered office suppliers) are requiring that all directors of the company provide proof-of-identity and proof-of-address, in order to keep their services working. Last month, our address supplier notified us that this was going to be necessary for us. It's a matter of time before our bank also wants the same. It's moderately difficult to run a company without a bank account or address.
Speaking from experience, providing this proof is extremely cumbersome, expensive and prone to error (especially for the five directors not in the UK). I've personally spent a few hundred dollars plus a flight to the UK to try to provide it, with little to show for it. I've discussed this with the other directors, and nobody except Gaz and Isobel are confident that they can provide the satisfactory information.
Simply put, our system of having a large number of geographically disparate, non-professional directors, does not fit well with the current document requirements for being a director of an active company. Since we can't change the requirements, we need to change who the directors are.
Before I discuss the fix, I need to share a fun but unnerving loophole in how the company is currently set up. I mentioned earlier that "members" are ultimately "in charge" of the company. Currently the only members of Weird Gloop are... drumroll please... me and Gaz. The company's fiduciary responsibility is currently just to him and me, so if we went and sold Weird Gloop to FANDOM for $10 million and spent it all on cocaine and sparkling water, we'd be perfectly within our rights to do that. This should be rather concerning.
Hopefully the way forward is starting to make sense: we need to remove all of the directors who are not actively involved in day to day activities (everyone except me and Gaz), and make those other 6 "members". This has all the desired properties: it reduces the set of people who need to provide documentation from 8 to a very active 2, and also closes the loophole where the company's allegiance is to Gaz and I, rather than the other way around.
The board of 8 people still remains, but renamed to be a board of members/guarantors instead of directors. Notably, the general powers available to the board don't really change (see link for general info): a majority vote still is a binding directive for the company. They can still fire the management. This shouldn't actually change the function of the board at all, and elections will happen like normal at the end of this year.
I and the other seven directors all feel this is the right move. Since this is a bit time sensitive, we're going to do this soon unless someone has a really good reason not to. Please comment if you have any concerns. ʞooɔ 11:51, 20 November 2019 (UTC)
Support - I've got nothing to add to this. Everything has been mentioned.12:07, 20 November 2019 (UTC)
Support - Seems reasonable and I recall Cook talking about how much of a pain this was before12:33, 20 November 2019 (UTC)
Comment - A few questions: how does this work in the long term? Do Cook and Gaz indefinitely remain as directors as a result of this? If not, how is it decided who becomes a director if Cook/Gaz were to cease being directors of the company for any reason? Is there a reason for not making the two directors guarantors too?
Also, picking up on "Gaz and I manage things on a day to day basis, and the others are mostly in a supervisory role", has there been an occasion where Cook/Gaz has had an opinion on doing something that has differed between other board members, and as a result the other board members have "overruled" them? I ask because I know that people often look to Cook/Gaz to provide direction when it comes to general wiki stuff on RSW/OSW, so I'm interested in if any of the other board members have ever put forward a differing view that has resulted in a different course of action being taken to what Gaz/Cook originally wanted/proposed jayden 12:37, 20 November 2019 (UTC)
- The directors can be added or removed by the board, at will. My personal view is that it should be whoever is actively involved in running things on a high level. If Gaz or I were to step back, we'd work on a succession plan with the board to make sure all current responsibilities are covered, and I think in all likelihood the board would appoint those person(s) as directors. Also, if it wasn't clear: Gaz and I will still be guarantors, as we are currently.
- As to your second point, the closest I can think of is how the board has, at times, pushed for a greater level of public transparency than I would have normally done. There was a question in my mind of whether this particular topic was a worthwhile thing to do a meta thread for, and Isobel in particular was very clear that she wanted to have a thread for this. Another minor example is that iN008 had a slightly different view on per-wiki eligibility requirements for voting in board elections than we did last year, and I think that decision still hasn't been entirely settled. ʞooɔ 19:38, 20 November 2019 (UTC)
Comment - Are there differences in tax implications (for the individual guarantors/directors) with that change? Also are the articles of association anywhere that we can read them?
Related to what Jayden asked; I'm assuming that directors can appoint other directors (unless we prohibit it in our own articles) but that the guarantors/members can also appoint and remove directors?14:54, 20 November 2019 (UTC)
- There should be no personal tax implications for either group. You can see the articles of incorporation here at the bottom.
- Directors currently have the ability to appoint other directors. This might change soon: Isobel is making a thread about some other governance issues pretty soon. ʞooɔ 19:38, 20 November 2019 (UTC)
- Yes, in my view it closes the loophole, since it's now no longer the case that Gaz and I are the only members. ʞooɔ 19:38, 20 November 2019 (UTC)
Support - Fine by me, but I think I'd like to see a contigency plan of sorts in case Gaz/Cook do get voted off as directors. As Cook said on discord, we'd definitely suffer without both of them, so no harm in being prepared.01:41, 21 November 2019 (UTC)
- Agreed, although my assumption was that the members would then appoint (a) new director(s), but probably good to actually define rules about these things. 08:17, 21 November 2019 (UTC)
Support - We talked over how to solve this in some depth and I think this is the best solution. I prefer the terminology of "member" and "management committee" going forward since wouldn't have a full board of directors any more.
Given the difficulty associated with providing the required ID etc for things like the registered address/bank account I think we should have permanent company directors (i.e. Cook and Gaz) rather than changing them in elections every time - so they would only change upon resignation or removal by the committee. Keeping to two of these positions seems good - and agreed that we should have a process for replacement of company directors, especially if their positions are permanent.
I'm happy to see people thinking about the need for us to have defined procedures for the operation of Weird Gloop - as Cook says I have a proposal to put these down in Forum:Weird Gloop constitution, though that is more for general processes. IsobelJ (talk) 21:38, 21 November 2019 (UTC)
Notice - Hey everyone, just letting you know that I'll be filing the paperwork to remove the directors on Monday (25th November), unless there is significant reason not to expressed here soon. Gaz (talk) 01:33, 24 November 2019 (UTC)
- It has been done. I'll leave this thread open for a little longer for any other discussion. Gaz (talk) 22:36, 25 November 2019 (UTC)
Closed - There was consensus to implement the change, the affected directors were altered to be members. Future elected members of the board shall hold the "member" status. IsobelJ (talk) 22:09, 5 January 2020 (UTC)