[CCWG-ACCT] question on fiduciary duties and their objectivity

[Thomas Rickert]

Hi Seun,
Jonathan Zuck volunteered to write up the outcome so that WP 1 can build on the results from LA. This is not forgotten.

Hope this helps,
Thomas

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rickert.net


> Am 01.10.2015 um 18:11 schrieb Seun Ojedeji <seun.ojedeji at gmail.com>:
> 
> During the face 2 face in LA, I was in a subgroup that has the community issue resolution escalation process similar to this; whereby as an escalation, there is an increase in the number of board members that could make the community's view implemented. Fortunately/coincidentally the group was lead by Chris and Greg, considering the status of the duo it was easy for me to believe it was workable ;-)
> 
> By the way, that subgroup activity in LA was very helpful but doesn't seem to be taken to the next level by the Co-Chairs and that made it difficult for me to conclude that anything concrete was achieved in LA to move us forward.
> 
> Regards
> Sent from my Asus Zenfone2
> Kindly excuse brevity and typos.
> 
>> On 1 Oct 2015 09:42, <Jorge.Cancio at bakom.admin.ch> wrote:
>> Dear all,
>> 
>>  
>> 
>> During the debates we had on the last conference call I put forward a question which I feel could be important to better understand under Californian corporate law.
>> 
>>  
>> 
>> This is whether there are any means to subject the exercise of “fiduciary duties” (by the Board) to objective standards.
>> 
>>  
>> 
>> As I have understood the discussion so far, the membership model allows the member to override “fiduciary duties” of the Board. However the member itself has no fiduciary duties vis-à-vis the organization.
>> 
>>  
>> 
>> On the other hand, fiduciary duties are apparently a useful tool within corporate law, as it imposes a duty to care for the welfare of the whole of the organization.
>> 
>>  
>> 
>> The argument which is made by some, as far as I understand it, is that there is however a problem in the exercise of “fiduciary duties” as it would provide the Board with an “arbitrary” power, e.g. to override community decisions (in exercise of community powers) without being bound to any objective standards.
>> 
>>  
>> 
>> Considering all this, my question (to the Lawyers, if this is certified as a question to them) would be: is there any means under Californian Law (or other US jurisdictions…) that would allow to subject the exercise of fiduciary duties to objective standards? (e.g. be it through concretizing these duties in the Bylaws, subjecting them to arbitration, imposing special requirements on the rationale needed to be provided if they are used to override community decisions, or, for instance, imposing extra-supermajorities in the Board in order to being able to invoke such duties?)
>> 
>>  
>> 
>> Hope this helps,
>> 
>>  
>> 
>> Regards
>> 
>>  
>> 
>> Jorge
>> 
>> 
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