Charter: The Board

Having already covered membership and voting, I'd like to finish up the last major piece of the project charter draft and talk about the Board of Directors. The board is a vital component of the project: they oversee management, make top-level decisions about the project's direction, and in general serve to make sure the interests of the project members are being represented. I've already touched a bit on the board's role in selecting a developer previously, but today I'd like to establish more clearly how the board will be structured and its more general responsibilities.

Composition

To begin, let's look at how the board will be set up. There are a couple issues to cover in this area:

Eligibility: First of all, who can serve as a member of the board? In principle, anyone can become a director if they are nominated and elected. There is only one major restriction on board membership: Members of the development team can't be board members (and conversely, current board members are ineligible to become the lead developer.) This is to avoid conflicts of interest between the dev team and the shareholders.

In practice, however, we don't want just anyone controlling our project. What kind of qualifications should a board member have? The best boards are made up of people experienced in areas necessary to the project's success. This includes those from the core "business" area of the project (game development,) but if possible a wider spectrum of vital areas of expertise should also be represented: marketing, finance, law, etc. As I mentioned in the section on voting, candidates will be asked to provide a summary of this information when they are nominated.

Number of Members: The ideal number of members for a board of directors is a matter of some debate; The only definite requirement is that there should be an odd number, to avoid tied votes. Other than that, we need to balance between the flexibility of a smaller board, and the wider range of expertise that comes with more members. For Metropolis I think we should adopt a gradual approach: begin with a reasonably small board, and add new directors as the need for additional kinds of expertise becomes apparent. To that end, a five-member board seems like a good starting point, with the provision that the board can add new seats with a majority vote.

Election and Term

Although we addressed this partially in the voting part of the charter, I'd like to look more closely at how the board is elected:

Nominations: Board members will be selected from a pool of candidates determined by nomination. Candidates can be nominated in three ways: First, by being selected in the general Nominations forum. Second, by being recommended by the existing board (this would be useful in cases where the board wants to add new directors with specific expertise.) Third, existing board members who wish to continue serving will be nominated automatically when a new election is held.

Initial Election: After the project is incorporated, a provisional, three-member board will be appointed to oversee the initial setup. When that's done, a general board election whill be held; If all goes well this should only need to take place once. Members will be have five votes per share to distribute among the pool of candidates. The five candidates with the most votes will be elected to the board. The candidate with the highest total will become the board chairman.

By-elections: After the initial election, there are two special cases where additional by-elections may be necessary. The first is the resignation of one of the existing directors; In this case, an election would be scheduled for the open seat. The board will be able to nominate a replacement, but is not required to. The second case would be following a board decision to add new board members. New seats would have to be added in multiples of two (to maintain an odd-numbered total), and the board should nominate candidates for the new seats and explain why new members are needed. The community would vote on each candidate on a yes/no basis; Abstentions would be counted as yes votes. Candidates from the nomination forum could also participate in these elections as alternate choices.

Dissolution: If a no confidence motion becomes a general referendum and is passed by the community, the Board of Directors will dissolve and a new general election will be held. Incumbent directors are allowed to stand for re-election.

Structure

As I mentioned above, the board will initially have five directors, with one serving as chairman. The directors can form committees for whatever tasks become necessary, but there are three important ones that should exist from the beginning:

Executive Committee: The executive committee is the main "working" committee, overseeing the day-to-day operations of the project and creating a budget. If the project's chief executive is not also a director, he or she would be included in this committee.

Nominating Committee: The nominating committee would be responsible for determining if new board members are needed, and finding suitable candidates.

Audit and Compensation Committee: The audit committee would oversee the project's finances and be responsible for conducting annual audits, as well as setting the salary for the project's full-time employees. If the chief executive is also a board member, he or she would be barred from serving on this committee.

Responsibilities

The board would, in general, be responsible for making sure the goals of the projects are met and the interests of the members are respected. Specifically, their main responsibilities would be:

Oversight: The main task of the directors is evaluating the performance of the project team and making sure that progress on the game is meeting expectations. This involves both setting targets and making sure they've been completed, as well as reviewing the work of the project management.

Budget Approval: The board will be responsible for approving the production budgets set by management, and auditing the project's finances. Compensation for management will also be set by the board; The Compensation committee would make a recommendation which the full board will vote on.

Community Relations: Another important responsibility is keeping the community up to date on the game's progress, and making sure the members' voices are being heard. The board will also be able to create votes in the Referendum forum to look for community input on important issues.

Transparency: It's vitally important that there be an open dialogue between the dev team and the community, and the board will be responsible for facilitating that. That means that they should be responsible for providing regular updates on the state of development, and make sure the community's questions are answered. Also, a detailed record of board meetings should be kept, including the voting record of individual directors, which would be made public.

As I've said before, all of this is potentially subject to expansion and change before we formally incorporate the project; But hopefully this will provide a reasonable framework for the actual charter, or at least provide a starting point for discussion. In any case, with this general structure in mind we can start developing the infrastructure here on the site to manage this system. As always, your comments and thoughts are welcome!