Minutes:2018-03-27

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Minutes from 2018-03-27

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March 27, 2018

Location: Online

Board of Trustees present: Christophe Henner (Chair), María Sefidari (Vice Chair), Esra'a Al Shafei, Kelly Battles, James Heilman, Dariusz Jemielniak, Raju Narisetti, Nataliia Tymkiv, Alice Wiegand

Board of Trustees absent: Jimmy Wales

Non-Board members present: Katherine Maher (Executive Director), Eileen Hershenov (Secretary, General Counsel), Jaime Villagomez (Treasurer, Chief Financial Officer), Chuck Roslof (Legal Counsel)

Slides: [[<tvar name="1">:File:2018-03-27 Board Meeting Slide Deck.pdf]]

The meeting was called to order at 9:03 AM PDT. Christophe, María, Esra'a, Kelly, James, Dariusz, Raju, Nataliia, and Alice were present. The Secretary confirmed the presence of a quorum. The Executive Director welcomed everyone and reviewed the agenda.

Operational Updates

Jaime presented an overview of the Foundation's revenue and finances for the fiscal year to-date (July 2017 through February 2018):

• The Foundation's revenue is 32% over plan so far, and has exceeded the full year target.
• There has been a 21% year-over-year increase in the Foundation's cash and investment reserves.
• The Foundation has continued to reduce its budget variance, primarily because more budgeted hiring and travel occurred later in the fiscal year than budgeted.
• Additional hiring for work on the Foundation's programs has further improved the Foundation's programmatic expense ratio.

There was discussion concerning the Foundation's ability to hire for currently open positions in addition to new positions proposed in the draft Annual Plan for the upcoming fiscal year.  Jaime and Katherine explained the way the Foundation plans to approach new hires, how it is improving recruiting capacity, and the focus on hiring manager accountability. Work has been done, and will continue, to identify and address any bottlenecks in the process.

In response to a trustee's question about how the Foundation's reserves are managed, Jaime provided a brief overview of the [[Wikimedia Foundation Investment Policy</tvar>|Foundation's current investment policy]]. Kelly added that the Audit Committee has been reviewing that policy and would soon be sending the Board a proposed amendment to update the policy.

Katherine provided an update on Wikimania 2018.  After careful consideration and investigation of the water crisis, the conference will go forward in Cape Town. The conference venue has been moved to a local hotel to help ensure reliable access to water.  Katherine will follow up with more information via emails to the Board, Foundation staff and contractors, and Wikimanians.

Katherine reported that she has hired someone for the Chief of Staff position, to start April 9, and that a job description for the Chief of Community Engagement position would be posted soon.

Annual IRS Form 990

Jaime noted that the Form 990 is required to be filed annually with the United States Internal Revenue Service. It contains information about the Foundation's governance, management, and other required disclosures, including revenue, grants, compensation, and functional expenses. Form 990s are publicly available, and the Foundation also publishes it on its website.

Jaime reported that the Audit Committee had reviewed the fiscal year 2016-2017 Form 990, and went over key disclosures with the Board. He reviewed the compensation disclosures for the Foundation's officers and key employees (as defined by the IRS). Compensation paid to some former employees are included in this Form 990, because, although it covers the fiscal year running from July 2016 through June 2017, it must included reported compensation for the entire 2016 calendar year. That results in reporting of compensation paid to certain former employees who received compensation at some point in calendar year 2016, as well as severance payments for other former employees. Katherine and Eileen provided information about the Foundation's severance policies and practices.

Jaime presented a comparison of fiscal year 2015-2016 and fiscal year 2016-2017 expenses, which showed an increase in the percentage of programmatic expenses.

Annual Plan

Katherine presented an overview of the Foundation's draft Annual Plan for fiscal year 2018-2019, to be published on Meta-Wiki later in the week. Katherine explained that fiscal year 2018-2019 would be "year 0" for making progress against the Wikimedia 2030 strategic direction. During the fiscal year, the Foundation would develop a 3 to 5 year strategic plan for the future. Katherine outlined the structural changes from previous annual plans, including defining all programs in terms of resources, outputs, and outcomes; and organizing programs around three goals:

1. Knowledge Equity—growing and identifying gaps in content and creators;
2. Knowledge as a Service—reaching more people with knowledge that is useful to them;
3. Foundational Strength—evolving our systems and structures.

The Annual Plan clusters programs based on three Foundation goals, rather than by department. Katherine wants the Foundation to move away from thinking of programs as things led by individual departments. This approach can lead to siloing, with  significant challenges going unaddressed if there is no single department that is clearly responsible for them. Instead, departments should have a shared understanding of the Foundation's common purpose and goals, accompanied by a means and structure for owning projects and being accountable for work.

Katherine explained how programs have been sequenced in the Annual Plan based on priority and dependencies. Year 0-A programs are generally deemed higher priority than Year 0-B programs; however certain Year 0-B programs may be fully resourced first if they have fewer dependencies with greater likelihood of success (such as not needing to hire additional people before starting on them). The Foundation is introducing this more dynamic resourcing approach to avoid limiting its ability to deliver on programmatic work due to hiring or other bottlenecks.

Katherine also provided an overview of the programs that fall outside the three Annual Plan goals but are important to maintaining the Foundation's essential operations, or are ongoing and funded from existing resources. Many of these programs are led by the Community Engagement department, which Katherine explained would be devoting 20% of its time to evolving its structure and program responsibilities to align with the movement strategic plan.

Katherine noted that the target revenue is 21.4% higher than the previous target for FY 17–18, though actual revenue could be lower or higher depending on the effect of recent changes to U.S. tax law. She and Jaime presented a commensurate increase in budgeted program expenses,much of it in personnel. This is in line with the Board's direction for growth, as discussed in the November 2017 Board meeting.  Taking a cue from the Foundation's practice this year of reallocating budget underrun to fund opportunities across the Foundation, Katherine explained that the Annual Plan includes a US$1.5 million Opportunity Fund to fund new opportunities or challenges as they arose. This provides the ability to move funds into important priority work as it develops.

A trustee asked about whether cross-departmental programs that started in the current fiscal year would continue into next year. Katherine explained that some of them, such as Community Health, are in the Annual Plan, while others, such as Brand, will be contingency programs. The trustee emphasized the importance of being able to explain how this Annual Plan is structured differently from past ones.

A trustee asked about the Foundation's contribution to the Wikimedia Endowment. Katherine responded that the budget includes a planned US$5 million contribution to the endowment; and that the Foundation's planned annual expected commitment will be a discussion item on the agenda for the upcoming April Board meeting.

Jaime and Katherine responded to a question about employee turnover and retention, saying that the Foundation's turnover rate is relatively low (at least by Silicon Valley standards). At the same time, there is a focus on ensuring that the Foundation is a good place for an employee to come from. Appropriate turnover is to be expected and the Foundation benefits both from sending its alumnae out to other jobs and from hiring new talent.

Trustee Recruiting

Nataliia updated the Board on the status of the process of recruiting new trustees to fill the seats to be vacated by Alice and Kelly in July. Kelly and Jaime have been working on finding a trustee with relevant financial expertise to fill Kelly's seat. The Board Governance Committee and Katherine have been developing a job description for the trustee to fill Alice's seat, with the goal of completing it by the end of March.

Nataliia said the Board would discuss recruiting more at the April meeting, and that she expected the new trustees would be able to join the Board at Wikimania.