TDF situation in relation to the German Foundations Authority, and why this led the BoD to make an extremely difficult decision on the MC election

Board Discuss
#14

Hi Italo,

I am not a lawyer, and I am confident that TDF has its own counsel to protect and structure its activities, so I will not wade into the detail here on my own. I’m grateful that you pointed out that there should be broad convergence on common interests between TDF and the ecosystem.

The write-up also seems to me, while interesting, to be not that relevant to whether the statutory election process has been followed fairly in Cor’s case.

For a more complete and helpful perspective on tendering I posted this some time ago and re-link it - which puts some numbers around this:

It is also worth bearing in mind that with the average full-time staff salary, as of some years back when I was on the board, many individual staff have been paid more in total than any software development supplier.

Beyond that; I again make again the offer I’ve made before - if competitive tendering on the open market (something that is not generally required anyhow for TDF) is in some way not a good enough way to get a fair market price (how?) - I would be well up for getting a 3rd party audit of our pricing, time logging & margin (if any) there. That has been an open offer met with silence for a long time AFAIR.

Ultimately there is always the suspicion that the lack of focus and urgency to tackle these issues, is part of a political agenda to disenfranchise corporate trustees (and now even ex. corporate trustees which is new).

I understand that for your part you appear to want to fix things rapidly, which is great! once again - I’d recommend talking - I want the dream that was LibreOffice/TDF to rock and am open to helping constructively.

Thanks !

Michael.

#15

I must stress that, while your post explains your motivation and perceptions, it does the opposite of explain or legitimize your vote, i.e. you focused on the TDF’s overall course and on the conduct of past BoDs and Cor as a director - and did not establish: 1. The basis for a claim of illegitimacy / disqualification of Cor’s candidacy (as opposed to whether it is desirable or not). 2. What gives the BoD the power to disqualify a candidate retroactively.

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#16

I respect your opinion, but the reality is that I provided plenty of reasons for rejecting Cor’s election. Of course, you may disagree with my opinions, but they are explained in details in my post.

#17

I have never written that ecosystem companies cannot participate in tenders. On the contrary, having a procurement policy written by a lawyer - a sound procurement policy can never developed following on a discussion amongst TDF members, as the result would probably be the same as the former procurement policy, which was developed following that kind of discussion - will allow all stakeholder to bid, including ecosystem companies. Of course, solving the issues based on the arm’s length concept will not be easy, but is definitely possible, and this is what Carlo Piana is doing.

#18

You’ve provided reasons why you don’t want him / think it’s a bad idea for him to be in the MC - but not the two things you (and the BoD) need to provide, which I listed: A basis for the claim of Cor’s illegitimacy as a candidate, and the source of BoD power to retroactively disqualify him. On the contrary, the reasons you provided seem to be rooted in your interpretation of the foundation’s best interests (which I may not disagree with); yet, someone’s candidacy being a bad idea or detrimental to the foundation in certain ways - even if that is conceded as the objective truth - does not make him disqualified, nor grant the BoD the power to disqualify them. Your decision still appears as being “ultra-vires”, even had it been taken before the elections, and after them - it gains another aspect of illegitimacy which is your failure to disqualify earlier.

Even someone completely agreeing with all your reasons must still demand that you recognize you did not have grounds for disqualification and could not disqualify retroactively; that you acknowledge Cor’s election as an MC member; and finally, if you believe you have both grounds for his removal and the power to remove him (e.g. as per §8.4) - that you make that claim explicitly. I doubt that you can establish such a claim, and thus will all simply have to “live with” Cor as an MC member for the next term (assuming our statutes don’t change).

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#19

Hi Italo,

again thx for the very extensive, independent & (likely) time-consuming summary of the issue!

Beyond my earlier (rather tangential) remark, I’ve encountered two more questions, that I don’t see answered (neither in your initial positing - and I’ve read it several times in full! - nor in any of the follow-ups):

That is indeed true, and in my view it is a feature rather than a bug (for any OpenSource community, not just for LibreOffice). But as you rightly state, this community-of-peers setup has saddled us with some challenges, on how to structure our governance.

My first question now is: how are the past issues with the arm’s-length-principle, while ecosystem companies had representatives on the board, any different from the current situation? Right now, there are four board members with significant portions of either their personal, or company income, originating in TDF. If I understand your rationale for disqualifying Cor in the MC election correctly (violation of the arm’s-length-principle) - would not the board need to act similarly also for this case? Certainly there’s collaboration, and a working relationship, perhaps even friendship, amongst directors?

My second question relates to this paragraph:

Are you sure, that merely “demonstrating […] due consideration, and […] embarking on a path aimed at […] solutions” will be enough for the current year? My reading of the audit result was, that plausible explanations are required, that past contracts and licenses were not in violation of relevant tax regulations?

In case the board would want to take that route, I’d of course repeat my earlier offer (similar to @mmeeks ’ one), that a suitable 3rd party would get access to allotropia books and timelogs, to ascertain that indeed the tenders we’ve worked on were not overpriced.

Best, Thorsten

#20

Hi Italo,

Referring to what I wrote before:

… let me do that here.

Thanks again for your massive work, Italo, in sharing this information that, to my knowledge is mostly correct!
Then: alas I don’t know/understand why items that were full on the boards agenda at the end of last year are still there, but trust people’s best effort of course.

Additional I notice more useful information to understand the situation (in a broader context) is missing. Apparently pieces that you don’t know or have missed it in the massive amount of communication (and no one made you aware). But since you, we ,are looking for understanding, let me add these. (Briefly now; in much more detail later.)

The audit having taken place, and the remarks in the report, are correct. I think that is is important to realize that legal report, that is at the base of the audit, could have been significantly better. It has been pointed at that the author of the legal statement could have had better information about some of the important processes in TDF. Some fundamental questions made to the statement, related to topics that ended in the audit, could have been looked at prior to the audit. From the audit itself, it seems more information could have been (pro-actively) shared with the auditor. Internal, I would say it is useful to make the discussion around place/role of (members that are working for) ecosystem companies not needlessly complicated, by avoiding to pick only part of the legal advise. As already mentioned in other comments: offerings to resolve at least one of the issues, at that time did not lead to action. For these reasons it looks to me that a ‘less troublesome picture’ of ecosystem companies and a much better audit for TDF could have been possible.
I can understand trustees will be interested to learn more of this; hence more later.

So short: I do agree that taking care for CoI’s and arm-length principle are important (and not new) but need to add that these are really not the (only) problems.

Cheers,
Cor

#21

Italo: Thanks for your work analysing the background to the issues TDF is facing and which I know the board will discuss next week. I agree with your analysis in relation to those issues.

However, I came to a different conclusion to you in relation to the decision to intervene against the Trustees’ decision in the Membership Committee vote. I did this for multiple reasons:

  • The reaction against Cor seems very personal, Neither personal dislike or affinity should play a role in this decision. Whether or not we agree with the approach he took to countering arguments by one of the directors in the last and current Board is not relevant to a decision to frustrate the choices of the Trustees about who should serve on the MC.
  • The issue of a conflict of interest, of the need for arm’s length dealing, is most likely addressed in the new MC by Cor’s detachment from the companies involved in the issue. I do not find the probability it is still disqualifying to be great enough to justify making up a special procedure to void the MC election.
  • In each of TDF’s bodies there is a need for each elected member to decide when and how to participate based on the matter at hand and the situation involved. I have every confidence the new MC will make good decisions in this regard and see no need to intervene in advance.
  • The Statutes lay out a mechanism for dealing with a situation where a member of the MC is not a suitable person to serve, in § 12 (3). It does not involve the Board denying the election of the individual and I believe if there is a case for Cor to answer it should be dealt with via that mechanism.

I recognise that other directors may disagree (and I do not accuse them of “serving interests that are neither TDF’s nor LibreOffice’s” for doing so) but I believe the appropriate solution to disagreement is discussion and mutual compromise to create consensus. That’s why I proposed referring the decision to the process in §12(3) of the statutes so that the Trustees can decide.

In conclusion, I believe the Board’s decision to have been made in error and without due process, which is why I voted against it, and will propose at Monday’s board meeting to reverse the decision (as the Board has done to so many other questionable decisions), confirm the MC election result as it shgould have done and then refer the matter to the Trustees.

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#22

Hi @ohallot , Olivier,
I don’t want to deny posts of e.g. Eyal 11 18, Michael 14, Thorsten 20 and others. I even think that in various aspects these are even more interesting than mine. But pls allow me to be so selfish to ask if you can be so kind to translate my not too long comment, also in serving your language community.
Thanks!
Cor

#23

Oh, similar kind request to @jfn (JeanFrancois) and @Italo of course.

#24

Hi Italo,

It would be really appreciated if you could cite case numbers and more ideally link the judgement to which you’re referring; I am not a lawyer but I spent some time this morning looking through the database to try to find this with no luck.

The board changed the statutes and added the lines you cite about representation after the decision you express concern about were made as Thorsten linked which has a case number there:

The German Federal Court of Justice decided (in judgement of 15 April 2021, case number III ZR 139/20

and is readable in translation with some work from the original German here.

Thanks.

#25

supremecourt.pdf (256.0 KB)
supremecourt-english.pdf (45.8 KB)

The case number is exactly that one, i.e. III ZR 139/20, and according to my understanding does not leave any room to interpretation. I have uploaded the original judgement and the English translation of the most relevant contents (the length of the original German text has been reduced by omitting all the references to other laws, which were not needed to understand the issue of excess of power of representation.

The English translation is based on my translation to Italian of the original German text (which of course was more convenient for my full understanding of the original German text), so there may be some small inaccuracies. What I did was to translate the entire German original, read it carefully, and once understood the contents get rid of what I considered redundant. No one else participated in the translation process or tried to influence my understanding and the resulting opinion, and the draft of the post to Board-Discuss, which was originally written in Italian for accuracy, read by my wife to check if it could be understood by someone completely unaware of the topic, machine translated into English and double-checked by myself to avoid the typical machine translation errors.

To better understand the issues related to the power of representation in not for profit foundations, I have also read several documents which explain the topic under different point of views. This is a list of the documents, which can be easily found on the internet in PDF format:

Deloitte - The Effective Not for Profit Board
Edward L. Glaeser - The Governance of Not for Profit Firms
VVAA - Governance Challenges for Not for Profit Organisations
Weil - Guide to Not for Profit Governance 2024
Wolfgang Reinhard - Representation of Power and Power of Representation

They are all interesting, but the last one provides a historical perspective on the development of the concept, which helped me in understanding the issue and shaping my opinion.

#26

Hi Simon,

I respect your opinion, but I continue to think that Cor Nouws candidacy was a completely irresponsible act, based on the fact that he was aware of the results of the 2023 audit on 2022 balance sheet, he knew that there would be an audit in 2024 on 2023 balance sheet, he knew that the authorities have not yet taken any action in relation to the 2023 audit but can take it at any time, he knew that he was involved in some of the issues spotted by the 2023 audit and that he will be involved in some of the issues which will be spotted by 2024 audit because of his position as a TDF Director and his former Conflict of Interest, and that by being elected he could sit on the other side of the table as TDF MC is overseeing TDF BoD’s actions. Even in Italy, which is not known to be respectful of laws, the concept that you cannot sit on both sides of the table during an investigation is respected. Silvio Berlusconi was banned from the Italian Parliament until the Italian Supreme Court decided that he was not guilty of the charges he was accused of. I find this incredibly simple to understand, and I am amazed that the BoD decision continues to be analysed under different points of view. In this case the Conflict of Interest, the potential abstention, and any other possible solutions to the issue do not apply. I repeat, while you are investigated, you cannot sit on the side of who controls the investigation.

#27

You keep repeating that, without responding to the clear rationale comments that show that there is no logic connection of the items you mention in your argument.

#28
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#29

As Italo said during the session at LibOCon, the board made a lot of mistakes around this decision.
Will the next one will be not retracting the decision and repecting and following the foundations rules?

#30

Please avoid putting words that I have never pronounced in my mouth. And please remember that I spoke in front of many TDF Trustees, that either have a very poor memory or will perfectly recall what I said, as I said it three times.

What I said is that the two PREVIOUS BOARDS - those you were a member of, and you were also responsible for most of the wrong decisions, either because you voted for the wrong decision or you tried to derail the right decision - have made an incredibly large number of mistakes in relation to the issue of “excess of power of representation”.

What you have just written confirms my choice of not talking with you after our short talk at the conference. You want to convince me of things I know based on legal documents, in addition to my understandings based on what I could read on board-discuss and other chat/email sources during the two previous board terms.

If you want me to believe - as people in Rome say to describe this kind of situations - that Jesus Christ died because in Jerusalem it was too cold to spend the night under the stars completely naked, well, you are talking to the wrong person.

I could comment further, but I hope that TDF Trustees - reading your misleading statements - start to get a better picture. In the next couple of days I will publish some additional food for thought, but I think that the message I am replying to provide enough of it.

#31

Who said during the community meeting that he’s not speaking the truth 80% of the time?

#32

If you have never done marketing, maybe you don’t know what Italo was speaking about:

I hope you’re not insulting Italo either in his marketing role or his board role, which, if you didn’t noticed yet, implement very different postures and responsibilities.

#34

I was fortunate to have my father as an example of righteousness. My 48-year career as a teacher, manager and professional speaks for me, as does what I have done within the project since I joined in 2004. Those who think they can embarrass me with sleazy wordplay are only qualifying themselves for embarrassing nothingness.

Obviously, this ends any kind of relationship at any level. Not even a letter of apology can make up for what has been written.

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