[Chapter-delegates] Why can't one be a Trustee and Chapter leader at the same time?

[Flávio Rech Wagner]

HI Andrew

Thank you for your answer and explanation on the restriction regarding 
participation of Chapter leaders in the BoT.

Because of legal issues, Chapters must be separate entities. Because of 
legal issues, leaders from separate entities that may receive funds from 
ISOC cannot serve in the ISOC BoT ...

I would strongly suggest we find ways to circumvent this type of 
restriction. Chapters should be an integral part of ISOC and fully 
integrated to its policy development and decision-making processes, also 
at BoT level, with no restrictions, even if legal constraints require 
that they are incorporated as separate entities.

Best,

Flávio



> Hi,
>
> I will leave the discussion about why the CoI rules for the Board are 
> as they are for the Board, because it is a governance issue. But there 
> is a straightforward tax answer to the question below:
> On Thu, Nov 05, 2020 at 01:56:39PM -0300, Flávio Rech Wagner via 
> Chapter-delegates wrote:
>
>> And I am very surprised to know that Chapter leaders should not serve 
>> as Trustees. This does not make any sense. Chapters elect four 
>> Trustees exactly to bring their perspectives to the Board, and their 
>> leaders are the persons that best understand and represent those 
>> perspectives.
>
> Chapters are, legally speaking, separate organizations from the 
> Internet Society (i.e. the corporation incorporated in the District of 
> Columbia in the US).  The US Internal Revenue Service requires that 
> Trustees disclose, in the annual 990s we file with them, any case 
> where they have an interest in another organization that receives 
> money from the Internet Society.  In principle, any Chapter can be in 
> receipt of money from ISOC because of the admin fund, because of the 
> money that flows through the Internet Society for Beyond the Net, and 
> because of the Chapterthon.  If an officer of a Chapter were to be in 
> a Chapter that receives any of that money, then we would have to 
> report it to the IRS and undergo a bunch of additional investigation 
> and audits and so on (because, as an officer of such a Chapter they 
> have a fiduciary relationship to the Chapter and so are deemed to have 
> an interest).  It would be a risk to the organization and our 
> 501(c)(3) status.  That is why it is important that nobody in a 
> Chapter leader position be a Trustee at the same time.
>
> That is not to say, of course, that people who have been leaders in a 
> Chapter should be excluded from selection as a Trustee.  We often have 
> people who become Trustees while they are Chapter leaders.  They 
> simply have to give one up or the other.
>
> I hope that provides the information you need.
>
> Best regards,
>
> A
>
-- 
Prof. Flávio Rech Wagner		
President Internet Society Brazil
flavio at inf.ufrgs.br, info at isoc.org.br          Fone: +55-51-3308 9494
https://www.isoc.org.br                        Twitter: @ISOCBrasil
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