Hi,
On the topic of the audit subcommittee, I am interested to learn if
any other chapters have similar, functioning bodies? Setting up some
form of expert reference group for audit and expenditure matters has
been on my "to do" list for quite some time. The WMF's audit charter
has given me some ideas of what I'd like to see, but the WMF is set up
quite differently from us and I'd like to pick the brains of other
chapters and bodies who have gone through the process.
Cheers,
Craig Franklin
On 21 December 2011 08:29, Stuart West <stu(a)wikimedia.org> wrote:
To begin sharing ideas and best practices, let's
start threads on
the governance/accountability/transparency practices at each
of our organizations. I'll go first with my views on the
Wikimedia Foundation. A few others from the WMF are on this list too. Please
add new thoughts or help answer questions!
I want to thank Thierry for his note to Foundation-l in late August
covering many of these issues for Wikimedia France. That was fascinating for
me and helped inspire my interest in this list. Thierry, maybe you could
update that email and send it around to this list on a new thread?
This will be long, and may be repetitive for many of you. But I think it
is important to share a thorough overview. It would be great if others could
aim for the same level of detail / section headings when introducing their
own organizations. I'm really interested in learning from what you all are
doing.
WMF Overview
The Wikimedia Foundation is a U.S.-based non-profit corporation created
in 2003. It received tax-exempt status in 2005. Its primary governing
document is the bylaws at
http://wikimediafoundation.org/wiki/Bylaws. The
Foundation is the holder / owner of the trademarks, including Wikimedia
and Wikipedia, and the operator of most of the websites used by the
projects.
Governance
The Foundation’s governing body is its Board of Trustees. As a U.S.
non-profit, the Foundation has some flexibility setting size and composition
of its Board. We decided in early 2008 to have 10 members. The
editing community (mostly) elects three seats in odd years (e.g. 2009,
2011). The Chapters as a group appoint two seats in even years (e.g. 2010,
2012). The founder seat is for Jimmy Wales. The Board itself appoints the
four remaining members to bring necessary expertise to the Board. Board
member serve for two years terms.
With appointed members, we attempt to identify gaps between the
existing membership and the skills we need to fulfill our duties. For
example, the Board identified financial, auditing, and organizational
governance experience as an important skill to have. Since we have not
typically found that in the community elected/appointed members, the Board
sought out someone with that background. That’s me.
Not all Board seats have been filled at all times, but we currently do have
the full 10 members. There's a lot of work to do, and a lot of perspectives
to consider, so having a full Board is really good.
Each year at Wikimania, the Board elects four officers: A Chair,
a Vice-Chair, a Treasurer, and a Secretary. A few years ago we
wrote detailed definitions for three of those roles:
http://wikimediafoundation.org/wiki/Chair,
http://wikimediafoundation.org/wiki/Treasurer, and
http://wikimediafoundation.org/wiki/Secretary. The Vice-Chair role is mostly
to be backup to the Chair and is typically included on all communications
with the Chair.
We try to have different trustees in each officer role. Last year I was
both Vice-Chair and Treasurer. It got to be too much work for one person,
though, and we are sensibly back to one-person, one-office this year.
It can sometimes be challenging to have everyone focus on something at
the same time, so we’ve experimented with another informal role
of “whip.” That's a term I’ve heard in U.S. and U.K. politics to
describe someone who is responsible for collecting votes, keeping us on
schedule, etc. We’ve had mixed success with that role, though. It's hard for
someone to always be the “bad guy.”
The Board has delegated duties to three formal Board committees: an
Audit Committee which I chair, a Human Resources
committee responsible primarily for evaluating the Executive Director
and for overseeing compensation, and a Board Governance
Committee responsible for assisting in governance matters. We've only
written a formal chatter for the Audit
Committee (
http://wikimediafoundation.org/wiki/Audit_charter) but I wish we
had more because it is really helpful to set clear expectations.
The Audit Committee was, at first, quite small and comprised mostly of Board
members. But we found that fairly few trustees from the community had both
the experience and the time to focus on its work. So for the 2009-2010 year
we switched to a model where one trustee leads the Audit Committee (me), and
then we reach out broadly to the community for members. We've had great
success with that model, and continue to have really valuable participation
from community members. Membership history is
at
http://wikimediafoundation.org/wiki/Audit_committee. The Board's Chair
and the ED sit in on meetings.
Because of early investments in movement-wide fundraising, the Board
has been able to hire a staff. It no longer plays an operating one. We do
not get involved day to day in the operations of the foundation. We do not
hire staff, other than the executive director. We do not interact with staff
in a governance or management role, though we do often in community work.
The Board really has two primary duties: fulfill our governance
obligations and hire/evaluate the Executive Director. Most of us also view
us as having an additional less-defined but really important third role as
one of the movement-wide leadership/decision-making bodies for Wikimedia.
All Board members are volunteers. The time commitment is less than it
used to be but is still quite significant. I estimate it's about 5 hours a
week just for board work (excluding editing/community work), plus 10-12 days
of meetings/travel each year. The Board meets in person three or four times
a year and on IRC a few more times a year.
We maintain a Board manual with lots more
information at
http://meta.wikimedia.org/wiki/Board_manual. We use this
regularly as a reference for ourselves. We also use it to introduce
potential new trustees to the role.
Finance/governance/legal staff
Currently we have a chief of finance and administration (Garfield Byrd),
a Controller (Tony Le), and a small finance staff. We also have a
General Counsel (Geoff Brigham) and a small legal staff. More details on
staff are at
http://wikimediafoundation.org/wiki/Staff_and_contractors.
Transparency
The two primary vehicles we use for transparency are the
Foundation’s website at
http://wikimediafoundation.org and of course Meta.
The staff publishes activity and technology reports each month
at
http://meta.wikimedia.org/wiki/Foundation_reports. The staff also
publishes semi-annual financial reports and government
filings at
http://wikimediafoundation.org/wiki/Financial_reports. The
Board publishes its minutes
at
http://meta.wikimedia.org/wiki/Foundation_reports and its resolutions
at
http://wikimediafoundation.org/wiki/Resolutions.
Financial audits
In the U.S., independent auditors focus on the financial statements
and controls behind them, testing management's draft results against
transaction records and against U.S. GAAP. The WMF's Audit Committee has
engaged the San Francisco office of global auditors KPMG in 2008.
Previously, the WMF had worked with a small Florida auditing firm called
Gregory, Sharer & Stuart. KPMG's latest audit
is at
http://upload.wikimedia.org/wikipedia/foundation/a/ac/FINAL_10_11From_KPMG.….
Like many U.S.-based non-profits, our fiscal year ends on June
30, mostly because it’s cheaper to get auditors in the off-cycle and it
gives more time to catch up on end-of-year fundraising paperwork.
Government regulation
The primarily federal regulator of non-profits in the U.S. is the
Internal Revenue Service, which grants non-profit status and requires
annual public filings of our activities. This Form 990 is due about nine
months after the end of our fiscal year and the WMF usually file in March or
April. The most recent Form 990 is
at
http://upload.wikimedia.org/wikipedia/foundation/1/1c/WMF_2009_2010_Form_99….
The WMF is also subject to the state laws of Florida (where
it is incorporated) and California (where it is headquartered). There
are also registration requirements around fundraising in many of the 50
states in the U.S.
Mission oversight/planning/accountability
The financial audit and IRS filings cover financial reporting, controls,
and transparency. They do not substantially address whether the
Foundation's activities are consistent with the mission. IMHO, no one from
outside our community could have a big impact in this role.
So this duty falls to the Board. Here's a summary of the framework we use.
First, a few years ago the Board commissioned a five-year strategy plan
to identify top focus areas. We did this through a fantastic
community-driven process. The result was the plan
at
http://strategy.wikimedia.org/wiki/Wikimedia_Movement_Strategic_Plan_Summary,
which continues to be a guide on priorities and objectives.
Second, each year in the early Spring the Executive Director and her
staff put together an annual operating plan. The ED typically gives the
Board a high-level summary of her thinking sometime in January or February.
The she and her team prepare a detailed plan. As Treasurer, I review this
thoroughly with the ED and give extensive feedback both on high-level issues
and, since I have experience budgeting, on planning issues.
Third, we then have a series of increasingly detailed reviews with the
full Board. We typically focus on whether the high-level objectives of the
annual plan are a) consistent with the mission and the strategy plan and b)
achievable. We each try to reach out to people in the community to collect
feedback/ideas as part of our reviews. As Treasurer, I give my
recommendation to the Board on the plan. Then we have a vote. Typically, the
Board approves the annual plan in late June and the staff publishes it
around the July 1 beginning of our fiscal year. The plan for this year is
at
http://upload.wikimedia.org/wikipedia/foundation/3/37/2011-12_Wikimedia_Fou….
Finally, each year the Board reviews the performance of the
Executive Director against the mission objectives/deliverables laid out in
both the annual plan and the strategic plan.
Wrap-up
OK. That's all i can type today. Thanks for your patience with the long
note. I wanted to get us all off to a good start on sharing different
approaches on these issues. I’m happy to answer any questions. And I’m
excited to hear similar overviews for other organizations. Who's next?
-s
ps -- In case others are interested, I’ll cross-post to my blog
wikistu.org
when I have a chance.
===============
Stuart West
Board member
Wikimedia Foundation
stu(a)wikimedia.org
===============
Stuart West
Board member
Wikimedia Foundation
stu(a)wikimedia.org
_______________________________________________
Treasurers mailing list
Treasurers(a)lists.wikimedia.org
https://lists.wikimedia.org/mailman/listinfo/treasurers