MEMBER GOVERNANCE
As a cooperative, we are governed by our members on a “one member, one vote” basis. Here, we explain our member governance in detail.
1. About cooperative governance
Cooperatives are democratically governed by their members on a “one member, one vote” basis. This means that each member gets one vote for each corporate governance matter that is submitted to members for a vote, like electing a board of directors, which oversees all business affairs, and voting on major initiatives and transactions.
2. Early stage takeover protection
We believe that our model of free and open membership and democratic member governance exposes us to significant takeover risk at our earliest stage. When we have the fewest members, who can (and should) be anyone, it only takes a relative few whose interests compete with ours to seize effective control over us and prevent us from serving our purpose.
As a measure of protection against this, we have included a temporary provision in our Bylaws that makes the founder/organizer the sole voting member until no later than six (6) months after we reach 1,500,000 members and have collected in cash $15,000,000 in cumulative gross revenue, which includes donations. This coincides with our first member vote to elect directors to increase the size of our board – discussed in section 4.
This temporary provision has no impact on any of our members’ eligibility to receive their member dividends.
Once this temporary provision terminates, each member automatically receives their voting rights – discussed in section 3. The founder/organizer will then have the same voting rights as every other member.
3. Member voting rights and decisions
Member voting rights include one (1) vote for each elected seat on our board of directors and one (1) vote for each other business item submitted to a member vote by our board, CEO, or members.
The affirmative vote of more than fifty percent (50%) of members who vote is enough to elect a board director or approve a business item.
No quorum of members is required for any member vote, except for a five percent (5%) member quorum on the member votes that are required to make any change to our Articles of Incorporation – our “constitutional” document.
4. Board of directors
Our business affairs are managed by our board and the officers and employees that it appoints, like our CEO.
Our board determines whether we distribute member dividends for any calendar year.
Given our early stage, our current board is our “initial board,” which has been in place since our incorporation, and it consists of one (1) non-elected director, who is the founder/organizer.
Our board will increase to between three (3) and nine (9) directors no later than six (6) months after we reach 1,500,000 members and have collected in cash $15,000,000 in cumulative gross revenue, which includes donations.
This is how our board relates to our organization:
To complete this board increase, our members will elect at an annual or special member meeting all but one (1) director: our CEO, who is currently the founder/organizer and will serve on the board as chairperson by virtue of their office.
Each member-elected director will then serve a term of three (3) years, after which each must be re-elected by our members. Member-elected directors cannot serve for more than nine (9) years. Our CEO can serve for the greater of nine (9) years or their tenure as CEO.
5. Business items
Member votes on individual business items of any kind can occur at annual member meetings or special member meetings.
Here are some example of business-item topics that could appear on a ballot:
Annual member meetings can include member votes on individual business items of any kind, and our board decides which business items appear on the ballot. Any member can submit a business item for ballot consideration if it’s supported by the signatures, electronic or otherwise, of 150 other members.
Special member meetings can include member votes on individual business items of any kind. These meetings can be called by our board, our CEO, or five percent (5%) of our members for any business purpose.
6. How member governance phases in
When our early stage takeover protection ends – discussed in section 2 – all of our members will effectively govern everything we do through their ability to call special member meetings, which can be used to decide on any business item.
When the board transitions from the initial board – discussed in section 4 – the board will consist of our members’ elected representatives, except for our CEO, who serves at the pleasure of the board.
7. Key safeguards for democratic governance by consumers
The following membership attributes contribute the most to safeguarding our de facto governance by consumers on a “one member, one vote” basis:
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Natural people only: this ensures that our members are human beings by barring corporations or any other legal entity that may be deemed a “person” from becoming a member.
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One membership per person: this prevents anyone from having more than one (1) vote in governing us.
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No proxies or designees: this ensures that members vote according to their own interests.
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The right to call special member meetings: this enables our members to organize and democratically conduct any business item they deem necessary.
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Member powers are in our articles: all key powers of our members are included in our Articles of Incorporation, which our members control, and, because of that, no one can alter our members’ key powers except for our members through a member vote.
8. Voting procedures
Member governance is conducted electronically to the fullest extent the law allows. We email our members to provide notice of and procedures relating to any governance matter that pertains to them.
Member governance procedures are defined in our Articles of Incorporation and Bylaws.
9. Our governance documents
All matters of our governance are defined in our Articles of Incorporation and our Bylaws.