[Eg-oversight-board] Fwd: Evergreen ByLaw Comments

[Mike Rylander]

Hi Scott,

I'm not sure I follow.  We can certainly elevate the standing conference
committee to a board-certified body, but that's covered under the "other
committees" section of the by-laws, isn't it?

Thanks,

--
| Mike Rylander
| President
| Equinox Open Library Initiative
| phone:  1-877-OPEN-ILS (673-6457)
| email:  miker at EquinoxInitiative.org
| web:    http://EquinoxInitiative.org

On Mon, May 21, 2018 at 1:27 PM scott.thomas at sparkpa.org <
scott.thomas at sparkpa.org> wrote:

> Hi Mike,
>     I appreciate your explanations. Regarding the Release Manager, this
makes perfect sense. However, since the annual conference is an extremely
important component of the Evergreen experience and, if all goes well, a
revenue generator, I think the Board’s role should be mentioned in the
By-Laws. Maybe it is as simple as having the Board, at the meeting that
takes place during the conference, certify the committee membership for the
new cycle. It would then be in the minutes. I recently became aware of the
standing committee, but even after a year on the EOB, I wasn’t sure where
they came from and how they fit in with the local folks.



> Scott





> From: Mike Rylander [mailto:miker at equinoxinitiative.org]
> Sent: Monday, May 21, 2018 11:43 AM
> To: scott.thomas at sparkpa.org
> Cc: Boyer, Jason A <JBoyer at library.in.gov>;
eg-oversight-board at list.evergreen-ils.org
> Subject: Re: [Eg-oversight-board] Fwd: Evergreen ByLaw Comments



> Hi Scott,



> The EOB is not involved in the selection of the release manager, quite by
design.  The EOB has always explicitly been a support organization for the
community at large, and does not attempt to direct technical issues or
create an official road map.



> The release managers are less "appointed or elected" than they are
volunteers with specific skills and stated technical goals for an upcoming
release.  One can think of the release manager as the "first among equals"
within the development community, for one release -- they're the point
person that has volunteered to "care the most" about the technical details
of an upcoming release.  This is a technical (development) position, and
does not decide what features will be developed by the rest of the
community, excepting on technical grounds.



> The EOB (and, by extension, an eventual Board of Directors of a future
Evergreen corporation) is an elected (and therefore political)
organization, and it was explicitly decided early on that it should not
attempt to "own" the community or the software, but to support them both.
This is also why the copyright for Evergreen code rests with the individual
contributors (or, in some cases, their employees) rather than with a
central body -- the code is truly open, and cannot be owned by one body, or
in the worst case hidden away, without the consent of every single
contributor.



> There are two separate conference committees, the standing committee that
has the same membership year to year (though folks do come and go), and the
local committee.  The standing committee is just a self-selecting volunteer
effort, though Grace Dunbar did put a lot of work into creating some
continuity documentation and structure in the several years she was
involved.  The local committee is usually made up of individuals from the
host organization and, sometimes, other community members that are in the
general vicinity of the upcoming conference.



> Does that help?



> Thanks,




> --
> | Mike Rylander
> | President
> | Equinox Open Library Initiative
> | phone:  1-877-OPEN-ILS (673-6457)
> | email:  miker at EquinoxInitiative.org
> | web:    http://EquinoxInitiative.org





> On Mon, May 21, 2018 at 8:36 AM scott.thomas at sparkpa.org <
scott.thomas at sparkpa.org> wrote:

> There have been so many emails around… I apologize if these have come up
before.



> 1.       Today I was trying to figure out how the Release Manager is
appointed or elected and could find nothing in the EOB Rules of Governance.
Am I just missing it? Given the importance of this position, should it
somehow be addressed in the new Bylaws?

> 2.       Even though I am involved with it now, I am still mystified as
to how the Conference Committee is formed. Should we add something to the
By-Laws stating that it is the Board’s responsibility to appoint a
Conference Committee annually?


> Scott





> From: eg-oversight-board [mailto:
eg-oversight-board-bounces at list.evergreen-ils.org] On Behalf Of Boyer,
Jason A
> Sent: Friday, May 11, 2018 3:46 PM
> To: Mike Rylander <miker at equinoxinitiative.org>;
eg-oversight-board at list.evergreen-ils.org
> Subject: Re: [Eg-oversight-board] Fwd: Evergreen ByLaw Comments



> I definitely like adding more electronic options and would also like to
see the indemnification clause changed to reflect an initial assumption of
good faith. If we keep the Exec Committee language I'd like the size bumped
to at least 3 but I don't have particularly strong feelings about that.



> Jason



> --

> Jason Boyer

> MIS Supervisor

> Indiana State Library

> http://library.in.gov/



> From: eg-oversight-board [mailto:
eg-oversight-board-bounces at list.evergreen-ils.org] On Behalf Of Mike
Rylander
> Sent: Friday, May 04, 2018 11:40 AM
> To: eg-oversight-board at list.evergreen-ils.org
> Subject: [Eg-oversight-board] Fwd: Evergreen ByLaw Comments



> **** This is an EXTERNAL email. Exercise caution. DO NOT open attachments
or click links from unknown senders or unexpected email. ****

> ________________________________

> All,



> As promised, here is the initial response from MOBIUS' lawyers to Karen's
direct comments and suggestions.



> I said before that the suggestions were mostly rejected, but that isn't
quite right.  The lawyers are starting from an adversarial position, which
is understandable given their stated past experience, as opposed Karen's
suggestions starting from a more amicable default.  As a practical matter,
I take Karen's suggestions as an aim to streamline and simplify
communication and action in the common case, whereas the MOBIUS' lawyer's
apply more structure up front in an attempt to protect against "activist
directors" (their words in one case).  The question before us is which do
we want to enshrine in our by-laws -- my interpretation of the choice could
be summed up as: do we value efficiency and assumption of good-faith over
prescribed defenses against internal strife?



> I can be convinced in either direction, but I tend towards the former by
default.



> To be clear on my position, I believe that most of Karen's suggestions
(particularly on practical matters such as the use of email for certain
functions) do not weaken any overall protections we have, and just avoid
overhead given the way our community works.  The biggest issue surrounds
indemnity, which we can discuss in more detail, but the example I provided
works to limit the issues raised below by restricting indemnity to only
litigation that arrises from the fact that a director was, in fact, a
director.  Anyway, I would appreciate all input you care to provide.
Thoughts?



> Thanks again, everyone!



> --
> | Mike Rylander
> | President
> | Equinox Open Library Initiative
> | phone:  1-877-OPEN-ILS (673-6457)
> | email:  miker at EquinoxInitiative.org
> | web:    http://EquinoxInitiative.org



> ---------- Forwarded message ---------
> From: Donna Bacon <donna at mobiusconsortium.org>
> Date: Thu, May 3, 2018 at 9:13 AM
> Subject: Evergreen ByLaw Comments
> To: Mike Rylander <miker at equinoxinitiative.org>



> Mike,

> See the comments below from our attorneys.

> Most of these comments relate to the committees permitted under the
bylaws.  While it is standard to contemplate such committees being formed
in the corporate documents, as a practical matter, entities of this size
actually forming sub-committees is rare and it is much more common for the
whole board to oversee the operations.  Please see our comments in red
below.



> Section 3:15 Actions By Board Without A Meeting

> Under the draft bylaws all decisions must be taken in a meeting, or
otherwise the only mechanism is by unanimous written consent. The bylaws
are silent as to whether email constitutes proper written consent. You may
want to make this looser so that a majority of the board can vote by email
without a meeting. This has been a major pain point for other orgs I've
worked with.



> Generally speaking we do not recommend email as sufficient for unanimous
written consent due to the record keeping requirements for corporate
entities.  How Evergreen has described its decision-making process is that
the board will make a decision, likely via internet chat and without a
formal meeting, and then document that decision in a resolution that is
circulated and signed by all of the board members.  That final, signed
resolution then goes into the corporate record book.  This avoids questions
as to the final language that was approved, makes it easier to ensure all
signatures are obtained, and is a best practice for the
statutorily-required record keeping.

> Section 4:1  The Executive Committee.

> The executive committee section is very strong, which is ok if you're
careful (the board can appoint a committee of only 2 people to do almost
everything the board does). So I wanted to flag that.



> Does Evergreen want to change this?  Note, as written the board has
discretion over whether to even form an executive committee and which
powers to give it.  There are carve-outs explicitly listed for certain
actions the board cannot designate.  As written, this gives flexibility to
the board on whether to create the committee and whether to give it very
limited or very broad powers.

> Section 4:2 The Finance Committee.

> This says that any major change in the budget must be approved by the
Board. This is vague and is silent as to materiality. It may be better to
give the committee a little bit of clear flexibility in case you do form a
finance committee.



> Does Evergreen want to change this?  Note, as written the board has
discretion over whether to even form the financial committee.  To keep
controls on the committee, its powers are limited to exceed or change the
budget, which is left in control of the board.  This is fairly standard.

> Section 4:5 Meetings of Committees.

> You may want to amend this to permit the use email for notice.



> We generally do not permit email for required statutory notices as the
Missouri statutes do not specify the effective date for electronic notice
absent proving the email was received.  If there is a dispute between the
corporation and a board member, this can be difficult.  With mail, the
statutes specify the effective date based on the mailing without requiring
proof of receipt.  Moreover, any regular meetings of the committee do not
require notice; notice only applies if there is a special meeting outside
of the normal schedule.  As most decisions will likely be made outside of
official meetings, those will be evidenced by a resolution signed by all
members and waiving the notice requirements.

> Section 5:1 Officers.

> The bylaws don't permit the President and Vice Chairman to be the same
person, which is I'm sure consistent with state law, but some states
require that the president and treasurer not be the same person, so that
there is some level of fiscal controls. You might want to consider adding
that in this case.



> There is no such restriction as to the president and treasurer being the
same individual under Missouri law, and therefore we do not add such a
limitation in the bylaws.  The authority of the president and treasurer are
controlled by the board, which is how the bylaws address this issue.  If
you want to add additional restrictions, let us know.

> Section 5:2  Appointment and Term of Office

> There's a 1 year term limit on officership. You might want to leave those
limits up to the board if Missouri law permits. While you do one year terms
now, that might not be convenient in the future for some reason, and then
you'd have to amend the bylaws.



> The term of the directors must be specified in the bylaws or articles
under Missouri law.  We typically specify the term in the bylaws rather
than the articles as the bylaws are easier to amend.  The 1 year term of
directors was requested by Evergreen.  As the officers are all currently
board members, which is typical, we want the terms of directors and
officers to match, otherwise an individual’s term as an officer may not be
over even if their term as director is complete.  It can be changed in the
future by amending the bylaws.

> Section 6:2 Fiscal Year

> I would let the board fix the fiscal year, with it initially as the
calendar year.



> The fiscal year is most commonly listed in the bylaws.  While not a
statutory requirement, many banks and other institutions prefer it be
listed in the bylaws.  The fiscal year as initially established is the
calendar year.  If the board wants to change it, we can amend the bylaws.
If Evergreen wants to remove it from the bylaws, we can add it to the
consent resolution.  However, any change to the fiscal year would still
need to be approved in a resolution of the board signed by all members.

> Section 6:9 Executive Director

> I would beef up this section to anticipate the possibility of other
employees.



> This section is intentionally left vague as the board does not anticipate
hiring any employees, but does plan to retain an outside company to handle
its operations.  We do not recommend having two companies or individuals
designated to the same “executive director” position.  The board can hire
other contractors (or employees) to perform any number of functions, but we
would not recommend vesting more than one person/entity with the title
“executive director”.

> Section 6:11 Books and Records
> D. Inspection  Procedure

> I would consider deleting "(c) demonstrate a direct connection between
the purpose for
> inspection and the requested records." I don't understand why a Director
should have to explain why they want to see the records. It seems like an
unnecessary bar - I think Directors should be engaged with the org.



> The bylaws also note that the directors can inspect corporate records in
accordance with applicable law.  We have the limitation regarding
connection in the documents as we have seen litigation tactics from
activist directors who are in opposition to the corporation use their
inspection rights offensively in the litigation to cause the corporation to
waste time and money.  For the most part, directors do not use the formal
process specified in the bylaws to request information if the relationship
is healthy (they just email the appropriate person and such information is
provided).

> Section 6:12  Indemnification and Liability of Directors and Officers
> D.
> A majority of the board determines whether a Director was acting in good
faith, etc. in order for the indemnity kicks in. If we're at the point
where this section is invoked, something has gone very wrong. Does it make
sense that the majority of the board are the ones to decide if the standard
is met? I could imagine situations that are very muddy. At least consider
putting in a limit on the discretion of the board in that case.

> This limitation is standard in most bylaws.  The limitation protects the
corporation from a director seeking to take advantage of the
indemnification section by invoking it to fund litigation adverse to the
corporation’s interest.  We have seen indemnification sections invoked by
directors that use the section to fund the director’s own litigation
against the corporation.  If the majority approval is not obtained, the
indemnification section will still apply if the director obtains a court
order enforcing the section, so the board cannot override the
indemnification provided in the bylaws.



> --

> Donna Bacon

> Executive Director

> MOBIUS

> 111 E Broadway, Ste 220

> Columbia, MO 65203

> 573.268.1845