Recently I studied Resolution 7, which would authorize the Board to invest Modo funds with reference to an investment policy. It would change the existing Rule 10.02:
"Without the approval of the Members by special resolution, the Directors shall not invest a total of more than $25,000 of the funds of the Association in securities or classes of securities other than those in which trustees are permitted to invest trust funds under the Trustee Act."To become:
"The funds of the Association shall be invested in accordance with an Investment Policy approved by the Directors that defines permitted investments and sets investment limits for permitted investments." [emphasis added]To maintain democratic accountability to us Modo members on how our accumulated funds are invested, I recommend changing the word "Directors" to "Members" in the above proposed new rule. [Update 2013-09-20: amended wording in second comment below] So the Board could propose future changes to the investment policy, but those changes would need to be approved by a vote of the members.
To give members an idea of the kind of investment policy changes the Board is considering, they included a draft policy in the rule change proposal document. That draft would allow Modo to put up to half of our accumulated surplus into "special investments" in other Canadian co-operatives: "Membership shares, investment equity shares, or other forms of investment debt/equity issued by co-operative associations".
I like the idea of supporting the development of other co-ops. But there are risks involved, especially if the Board could further change the investment policy without member approval at any time in the future, as their proposed rule change would allow. Such risks can be better controlled if we maintain a clear link of accountability to Modo members.
Most members may be too busy to pay attention to future changes in the investment policy. But as long as at least a few members pay attention and communicate with others, we can provide a helpful check and balance. Modo's current Board seems loyal to the best interests of members and the co-op, but our governance system should not assume that all future directors will be as loyal.
I'm contacting the Board about this issue, by phone and by email to rules[at]modo.coop. I invite feedback from them, from other members, and from anyone interested. You can comment below and/or email me (mark[at]votermedia.org). I encourage Modo members to attend the Sept 23 SGM to discuss, perhaps amend, and then vote on all the proposed changes. See you there!
2 comments:
I thank those who have given me feedback on this post. One has pointed out that large voting organizations typically do not have their investment policies approved by voters. That is true, it's not a standard governance feature. But since Modo aspires to a higher standard of co-op member democracy, this would be a good feature to have.
Amending my amendment:
I thank Modo's Governance Committee (especially Alan Woodland, Joel DeYoung, and David Lach) for discussing my above proposed amendment and suggesting an improved version. I agree with their suggestion, so I now plan to propose (at next Monday's SGM) this new wording for Rule 10.02:
"The Directors shall not invest a total of more than $25,000 of the funds of the Association in securities or classes of securities other than those in which trustees are permitted to invest trust funds under the Trustee Act unless the Members have ratified, by ordinary resolution, an Investment Policy approved by the Directors that defines permitted investments and sets investment limits for permitted investments, in which case the funds of the Association shall be invested in accordance with that Investment Policy."
BTW the Governance Committee is not endorsing my amendment, just trying to ensure that it is pragmatically actionable if it passes.
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