View source for Reports 7Dec13/Protecting the charity against entryism

=Protecting the charity against entryism=

In any small organisation there is a danger of entryism, where a small and organised group of people could attempt to stage a take-over of the organisation by packing the board. The board has a duty to consider any risks that be may applicable to WMUK, and whether any steps should reasonably be taken to mitigate this risk.

It may be that no action is needed as the effective risk to the charity is small.  Whatever verification is undertaken, there is no realistic a priori way to check that a member or potential member is committing to uphold the values of the charity and has joined in good faith. 

The board will be asked to consider at the December meeting whether (further) mitigating action is needed.


==History==
The board has reviewed over the last few months some of the options to protect the charity and has so far concluded:
*that the charity must take effective steps to increase the size of the membership, but
*that for the reasons recited below the systematic verification of applicants for membership is neither realistic nor desirable. 
The reasoning on the second point is set out in some detail for the benefit of our new trustees.


===Verification of Membership Applications - a review===
Our articles of Association say:

====1. Members====
1.1 The subscribers to the memorandum are the first members of the charity.

1.2 Membership is open to other individuals or organisations who:

:(a) apply to the charity in the form required by the Directors; and
:(b) are approved by the Directors.

1.3 The Directors may only refuse an application for membership if, acting reasonably and properly, they consider it to be in the best interests of the charity to refuse the application.

1.4 The Directors must inform the applicant in writing of the reasons for the refusal within twenty-one days of the decision.

1.5 The Directors must consider any written representations the applicant may make about the decision. The Directors' decision following any written representations must be notified to the applicant in writing but shall be final.

1.6 Membership is not transferable to anyone else.

1.7 The Directors must keep a register of names and addresses of the members.


====2. Some Related Considerations====

There is no qualification for membership of WMUK other than:
*Committing to uphold the values of the charity,
*Paying £5.  
*Providing a name, an address, and contact details.
While the name, address, and contact details should not, on the face of the application, be false, neither the Companies Act 2006 nor the Charities Act 2006 require directors/trustees to verify that applications for membership come from people who are who they claim to be. 

There is no necessary correlation between membership and editing.  Not all members are editors, and not all editors are members (indeed the great majority aren’t).


====3. Risk and Mitigation ====
3.1  One proposal considered was that when an application form is received from a prospective member, they should be sent a postcard, and ask to sign and return it.  This would enable the charity to be reasonably sure that a person of the given name actually resided at the given address.  

:Reasons for not adopting this were:
*It is not a highly reliable means of linking a name to an address, and it would be easy for a small and organised group of people to make arrangements to use a friend’s address for the purpose of undermining the charity.
*Even insofar as it allows the charity to be reasonably confident that the given name and address were correct and linked, it does not help verify that the given name is real
*While being of almost no value in terms of reducing risk to the charity it would likely serve as a significant disincentive to good faith applicants for membership, particularly from outside the UK 


3.2  Another proposal considered was to ask the prospective member for some personal identification, such as a photocopy of their passport. 

:Reasons for not adopting this were:
*There is no proof that the person whose details are supplied is aware that a voting membership has been registered in their name
*There is no means of proving that the person actually casting a vote at an AGM is the person whose details were provided
*Even greater disincentive to good faith applicants, particularly from outside the UK


3.3  The charity could use a checking service such as Experian to confirm current and previous addresses and provide a confidence score on the reliability of the information provided by the prospective member.  

:Reasons for not adopting this were:
*It is highly intrusive
*It is expensive
*It is questionable whether charitable funds could be used for this purpose


====4.  Other Considerations====
*We say that we are ‘open to all’ who support our aims, and we want to act as if we mean that and not put people off.

*Board members are required by our articles to admit anyone to membership unless they can provide a compelling reason why they should not.  We have no practicable means of establishing such reasons in advance.

*The mechanisms described above could be applied, to rather limited effect, while the charity is small.  However we want to grow rapidly and the administrative burden of these identity checks would soon become problematic.

*A large membership provides natural protection against entryism as it makes it effectively impossible for a small group to take over.  The prior verification measures discussed would be at least as likely to deter rapid membership growth as to hamper entryism, and to that extent would be counterproductive.


====5.  Approval of Membership Applications by the Board (ie by the trustees in person)====
Until July 2013 the Board approved individual membership applications by considering and agreeing a list of names. AM has reviewed the in camera Board minutes back to 2008 and has not come across any instance where an applicant was refused membership or deferred pending investigation.  CK, who has been on the Board for two and a half years, recalls no case where an applicant was refused or deferred.  In practice therefore, the approval of membership by the Board is purely a formality and, for the reasons set out above, it is difficult to see how it could be anything else.  It is certainly not a protection against entryism.  This is different, for example, to the Board approving financial expenditure.  When the CEO wants authorisation to spend an amount there is a clear purpose, supporting documentation, a budget to refer to etc. so Board members can ask questions and make an informed decision.  In the case of membership applications none of this exists.

When the Board discussed this in July 2013, we also noted that the changing character of the Board had an impact on our ability to exercise any kind of useful screening function.  When WMUK was a very small community with entirely hands-on Wikimedian trustees, there was a reasonable chance that many or all of the Board members would personally know at least some of the applicants for membership.   However, as the nature of the board has changed to be more strategic than day-to-day operational, that is no longer the case. 

All of this brought us to the conclusion that direct Board approval of membership applications was not something which added any meaningful degree of risk mitigation to the organisation.

We then turned to the question of whether it was strictly necessary for Board members to approve applications in person, or whether this task could be done by staff.  Some Board members were of the view that the latter was not permissible, partly because of the wording of Article 2 and partly because of Article 21 which says that the Directors can delegate their powers to a committee of two or more Directors. Some trustees felt that that even going through a form of approval probably offered some minimal deterrence to bad faith applications, and that we ought to take whatever steps we could, even if they were of limited effectiveness.  Another factor was also that those holding this view had limited confidence in the ability of staff to handle membership applications effectively without board-level involvement. 

The contrary view was that in fact the trustees already allow a very extensive range of powers to the staff, for example through the agreed scheme of Financial Delegation, and indeed through the CEO’s job description, which gives him considerable scope for action.   In this view the meaning of Article 21 is that Directors cannot delegate decisions about key things affecting the charity other than to two Directors.  This would include purchase, leasing or sale of buildings, investment of funds, decisions to take court actions etc.  It could not possibly mean, literally, that anything within the powers of Directors (defined in the Articles as anything ‘that is lawful’) could only be undertaken by the entire Board or by two delegated Directors.  If we thought this is what Article 21 meant, we would need to consider why we employed any staff at all.   

As a practical matter, staff would be more likely to spot a bad-faith application than would trustees as there are more experienced Wikimedians on the staff than there are on the board.

We concluded, by a majority, that the task of processing membership applications by staff amounts to the execution an administrative task and is no different to the many other tasks already done by them.  It amounts to asking staff to open the post/email, check whether there is any obvious reason why the applicant should not be accepted, record the payment of £5, and enter name and address details on a database.  If there is a problem on the face of the application such as the use of an obvious pseudonym, or the application is by an individual known not to support the charity's aims, the staff must then refer the application to the board.

As a separate issue, it is proposed in any event to seek broad legal advice on the wording of the articles to ensure that they still comply with best practice and recent changes in charity law.  Should our lawyers recommend any clarifications regarding the processing of membership applications, those will be included in the more general update that the board is likely - if so advised - to bring forward for approval at the next AGM.

==Proposal for December board meeting==


We would like to discuss two further options for protecting the charity at the December board meeting, namely:
*Deferring voting rights for new members for a period, e.g. 6 months
*Making a check as part of the voting procedure when board members are elected


====1.  Deferring voting rights for new members====
Some charities protect themselves against newly-appointed members voting as a bloc by requiring additional qualifications before a member can vote, e.g. that he/she has been a member for some minimum time.  While that might provide some protection, we do not believe it to be desirable for WMUK, particularly while it remains a small charity.  We want to be open, friendly and welcoming, and inviting new members to their first AGM and then telling them they cannot yet vote are not really compatible with those aims.


====2.  Instituting checks as part of the voting procedure====
Entryism, if it is a real risk, could be countered to some extent by instituting new rules for board elections along the following lines:

*To ensure that the charity has a real address for each member, voting forms will be posted out in hard copy prior to any election, each bearing a unique voting code (different from the membership number).
*Members voting by post must vote on their official form.
*Members voting in person at a meeting may vote on their official form. If they have forgotten to bring the form, the tellers can provide a new one only on proof of identity and of a current address which matches the address held on the charity’s register
*Members can vote electronically (e.g. by email or online, if available) only by quoting the unique voting code.
*Prior to the election, a check will be made to ensure that multiple voting forms are not being sent to a single address unless the reason for that is known (eg several family members who live together).

It would be possible for the charity to appoint an external organisation such as Electoral Reform Services Ltd (ERSL) to handle all aspects of the election, including voting verifications [''Note that Kate West would have a conflict of interest if ERSL were to be discussed in this context''].   However, we do not consider there is a need for external support at present, given the relatively low numbers that are eligible to vote in any election.

Instituting checks as part of the voting procedure may not prevent a member from registering under a non-obvious pseudonym, and then voting electronically.  However, by ensuring that addresses are real and are not duplicated we can be reasonably sure that large numbers of voting memberships have not been created in order to undermine the charity.


====3.  Recommendation====
We recommend that as a proportionate response to the expected level of risk we introduce checks as part of the voting procedure, as discussed above, but that we do not defer voting rights.  We recommend that Govcom be asked to propose new election rules, based on the above principles, for approval at the next board meeting.

''Alastair McCapra & Michael Maggs  4 November 2013.''    

--[[User:MichaelMaggs|MichaelMaggs]] ([[User talk:MichaelMaggs|talk]]) 09:49, 4 November 2013 (UTC)