Vote on Board Policy Bylaws Amendment

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  • Elizabeth Koprucki
  • Ryan Pierce
  • Jason Shanfield

History

  • 2015-07-15 - Vote announced on the mailing list.
  • 2015-07-21 - Language locked in.
  • 2015-07-28 - Vote of the membership.

Background

After an examination of PS:One's insurance coverage, and to preserve our eligibility to apply for 501(c)(3) tax-exempt status, the Board of Directors enacted three policies:

To date, no member made a single meaningful objection to the substance of these policies, however, there has been considerable discussion of the manner in which the policies were enacted and whether the Board has the authority to enact them.

The Bylaws grant the Board the power to create policies in limited circumstances. The policies that led to this discussion were necessary "to fulfill any obligations to ensure the health of the organization”. Even one lawsuit against Pumping Station: One for which our insurance carrier denied coverage and a defense because the claimed liability was excluded by the insurance policy could easily bankrupt Pumping Station: One. We have seen members engage in activities excluded from insurance coverage which are now prohibited by these policies.

Objections to the Board’s authority to enact policies consistent with reducing legal risk by helping maintaining insurance coverage reflect a fundamental misunderstanding of the role of the board of directors of a corporation, and the Board of Pumping Station: One in particular.

The Board is charged with the sole authority to purchase and maintain insurance coverage, yet members have seriously suggested that the membership ought to be able to determine on its own, without legal counsel and without any fiduciary obligations to Pumping Station: One itself such as those owed by the Board, to expose Pumping Station: One, its individual officers and directors, and perhaps even individual members to potential legal liability that might otherwise have been covered by insurance.

It is appropriate for everyone to have the opportunity to participate in public discussion — indeed the Board exists to protect and promote the best interests of Pumping Station: One, which obviously includes being mindful of the wishes of the membership while still exercising its independent judgment, as is required by law.

It is inappropriate to leave the Board purportedly lacking the authority to do more than purchase insurance that the membership can then opt to ignore, thus creating totally unnecessary and unacceptable legal risk. The Board of Directors' duties need to include handling fundamental issues related to the existence of the corporation itself, such as maintaining insurance coverage. This proposed Bylaws change makes explicit the Board's authority to create policies of this nature. The Board of Directors needs this authority because:

  • The elected Board has legal and fiduciary obligations to Pumping Station: One that the membership does not.
  • The Board retains professional services, including legal, insurance, and accounting on behalf of Pumping Station: One. The Board receives legal and professional advice for the purpose of responsibly handling its duties that is privileged and confidential.
  • The Board is in a unique position where it may have information, responsibility and accountability over these issues. It needs the authority to address these issues when it deems the best way to do so is to create a policy.

To be clear, PS:One is primarily member-run, and the vision for what the space should be comes from the members. This does and should include authorizing large equipment purchases, approving the annual budget, and creating policies that fall outside the boundaries of legal, contractual, non-profit, and insurance issues.

Language

The following section of the Bylaws:

Issues Proper for a Vote of the Directors

The board may decide on issues related to:

  • spending money from the general fund necessary to keep the organization's property in good working order and functioning in fulfillment of the organization's mission,
  • spending money from the general fund on infrastructure improvements costing less than $300,
  • spending money from the general fund to obtain advice and services for the management of the organization or the fulfillment of the organization's mission,
  • spending money from any funds donated for a specified purpose, and
  • to fulfill any obligations to ensure the health of the organization.

will be amended (changes indicated in bold) as follows:

Issues Proper for a Vote of the Directors

The board may decide issues and enact policy related to:

  • spending money from the general fund necessary to keep the organization's property in good working order and functioning in fulfillment of the organization's mission, and legal and contractual obligations,
  • spending money from the general fund on infrastructure improvements costing less than $300,
  • spending money from the general fund to obtain advice and services for the management of the organization or the fulfillment of the organization's mission, and legal and contractual obligations,
  • spending money from any funds donated for a specified purpose,
  • creating, modifying, and revoking policies regarding legal, contractual, non-profit, and insurance-related issues, and
  • fulfilling any obligations to ensure the health of the organization.