The role is currently unpaid, but we are investigating whether this can and should be changed. … We think the role will require significant time and attention, though this will vary depending on the needs of the organisation. Some trustees have estimated they are currently putting in 3-8 hours per week, though we are working on proposals to reduce this significantly over time. In any event, trustees should be prepared to scale up their involvement from time to time in the case of urgent decisions requiring board response.
I would strongly encourage you to make the position paid! Right now it seems like a non-trivial commitment: 3-8 hours, maybe less in the future, but sometimes urgently more, and dealing with difficult and sensitive topics. It’s typical for corporate boards to be paid, and this seems like a role that is both more hands-on and more unpleasant, especially with the FTX Investigation of Damocles still looming overhead.
Just a note for the UK boards: trustees cannot generally be paid for their work. UK gov quote:
When you become a trustee, you volunteer your services and usually won’t receive payment for your work.
Generally, charities cannot pay their trustees for simply being a trustee. Some charities do pay their trustees – they can only do so because it’s allowed by their governing document, by the Charity Commission or by the courts
My guess is that the CC would probably approve payment to at least a minority of board members for a limited time; their guidance on when they will do so is here.
They do seem to be concerned about conflicts of interest—but I would view providing reasonable compensation to a minority as posing lower risks than the likely alternative (which is that people who work for other EA organizations take on the role, and their employer implicitly subsidizes their board membership by not reducing their salary and understanding that their productivity for the employer may be impacted).
Ah, I defer to your superior expertise! But I think it would mean specifically getting permission from the CC, which sounds like quite a bit of faff anyway, and after which they might still say no.
I can’t speak for EVF (with whom I have
no affiliation), but would encourage anyone for whom financial considerations would be a barrier to apply and note that. The status of the applicant pool may be relevant to whether EVF wants to make an application to the CC, and is relevant to whether the CC would allow an application.
I generally agree with this given the present time commitment, but note one concern. If someone is getting paid for 8 hours a week (0.2 FTE), plus is devoting additional paid time during fire drills, they may be starting to be more financially enmeshed with the organization for which they serve as a director. That level of financial involvement is starting to look more like that of a part-time employee rather than that of a typical paid director.
Of course, it’s common for some directors to have significant financial enmeshment with their organizations. But there are good reasons you want a majority of directors to not have significant enmeshment—i.e., to have financial independence from their organization. This wisdom is reflected in, e.g., California Corporation Code 5227, which requires that a majority of directors not be “interested persons” such as employees or contractors.[1]
The upshot of that is that the solid proposal of paying directors under these circumstances needs to go hand-in-hand with plans to reduce the time commitment for (at least most) directors significantly over time.
“[R]easonable compensation paid to a director as director” doesn’t make one an interested person. I don’t know at what point the director starts looking too much like a part-time employee . . . but my point is about the wisdom of not having too many directors with significant enmeshment, not whether an arrangement would comply with any given law.
What do you think about the idea of large donors holding back some of their funding and directly transferring it to the people in the board? Or the donors could maybe earmark some part of their funding for that purpose. Then the people in the board don’t have to feel like their income is dependent on their relationships to people in the org.
I think the issue is more that such an income would depend on the org’s performance or existence even in that arrangement, and that directors should be ready to make hard decisions that could e.g., shut down the organization. Depending on the org in any way would limit their decision power to make such calls.
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I would strongly encourage you to make the position paid! Right now it seems like a non-trivial commitment: 3-8 hours, maybe less in the future, but sometimes urgently more, and dealing with difficult and sensitive topics. It’s typical for corporate boards to be paid, and this seems like a role that is both more hands-on and more unpleasant, especially with the FTX Investigation of Damocles still looming overhead.
Just a note for the UK boards: trustees cannot generally be paid for their work. UK gov quote:
My guess is that the CC would probably approve payment to at least a minority of board members for a limited time; their guidance on when they will do so is here.
They do seem to be concerned about conflicts of interest—but I would view providing reasonable compensation to a minority as posing lower risks than the likely alternative (which is that people who work for other EA organizations take on the role, and their employer implicitly subsidizes their board membership by not reducing their salary and understanding that their productivity for the employer may be impacted).
Ah, I defer to your superior expertise! But I think it would mean specifically getting permission from the CC, which sounds like quite a bit of faff anyway, and after which they might still say no.
I can’t speak for EVF (with whom I have no affiliation), but would encourage anyone for whom financial considerations would be a barrier to apply and note that. The status of the applicant pool may be relevant to whether EVF wants to make an application to the CC, and is relevant to whether the CC would allow an application.
Thanks for raising—it sounds like it is not that easy to change the governing doc on this matter.
I generally agree with this given the present time commitment, but note one concern. If someone is getting paid for 8 hours a week (0.2 FTE), plus is devoting additional paid time during fire drills, they may be starting to be more financially enmeshed with the organization for which they serve as a director. That level of financial involvement is starting to look more like that of a part-time employee rather than that of a typical paid director.
Of course, it’s common for some directors to have significant financial enmeshment with their organizations. But there are good reasons you want a majority of directors to not have significant enmeshment—i.e., to have financial independence from their organization. This wisdom is reflected in, e.g., California Corporation Code 5227, which requires that a majority of directors not be “interested persons” such as employees or contractors.[1]
The upshot of that is that the solid proposal of paying directors under these circumstances needs to go hand-in-hand with plans to reduce the time commitment for (at least most) directors significantly over time.
“[R]easonable compensation paid to a director as director” doesn’t make one an interested person. I don’t know at what point the director starts looking too much like a part-time employee . . . but my point is about the wisdom of not having too many directors with significant enmeshment, not whether an arrangement would comply with any given law.
What do you think about the idea of large donors holding back some of their funding and directly transferring it to the people in the board? Or the donors could maybe earmark some part of their funding for that purpose. Then the people in the board don’t have to feel like their income is dependent on their relationships to people in the org.
I think the issue is more that such an income would depend on the org’s performance or existence even in that arrangement, and that directors should be ready to make hard decisions that could e.g., shut down the organization. Depending on the org in any way would limit their decision power to make such calls.