Author(s):@nelson Implementer(s): Pocket Network Foundation (PNF) Category: Governance Upgrade Related:PIP-26
Summary
This proposal is a related follow-up proposal to PIP-26: Foundation for the Future. This proposal proposes replacing Nelson Ryan as a director of the Pocket Foundation for a company owned solely by him.
Motivation
This change is motivated by the simplicity of tax and employment considerations for both Nelson and the foundation. Given the international nature of the foundation, the directors taking their roles via companies they solely own simplifies operations for both parties.
Both Dermot and Jack have already joined the board via companies solely owned by them.
FAQ
Why didn’t you use a company before now?
I haven’t received any compensation from the foundation for my appointment in April 2020 until now. As a result, questions around tax and employment haven’t been an issue up until this point.
Why didn’t you include this in PIP-26?
Since I’m already a director of the foundation, and the proposal contained many parts, it slipped our minds to explicitly obtain DAO approval for this change.
Why do you need DAO approval?
Although the company is solely owned by me, it is legally a different entity, and I can only substitute myself for the company through formal director appointments and removals, which require DAO approval.
Implementation
Remove Nelson Ryan as director of PNF
Appoint Glacier Research Pty Ltd (Company solely owned by Nelson)
Given the simple administrative nature of this change, the fact that it is a fast-follow to PIP-26 which received the support that it did, and the 7 likes without any comments, we see this as an uncontroversial proposal that is safe to now put to a vote.
Question for you @nelson. Would it be that this only applies to single member (solely owned) LLCs? If not, it seems there is a risk that the responsibilites could be delegated. That’s not in the spirit of things here. So assuming that is made clear, I’d be all for this. But I would not be for it if responsibility could flow to other members / directors / shareholders / owners / etc of the entity being used.
Hi Steve, as it is an Australian Company, it’s not a US-defined “LLC”, but yes, it is a single-member Limited Liability company with myself as the sole director and beneficial owner. Agreed on directors delegating that responsibility not being in the spirit of what we are trying to achieve here. One way we can address this is by putting a clause in the director agreements with PNF that all director changes or changes of control must be disclosed.
Does this business that Nelson owns provide any services to other customers. If so I would definitely say no to this. Liabilities of his company could fall on pokt assets if his company was sued
Hi @Bfishgambo, just to clarify, before proposing this change, it was reviewed by Dermot, given his extensive legal background. We also discussed this with the secretary of the foundation Silverside who are comfortable with this change and sees no risks to having corporate directors on the foundation. Corporate directors are very common and provide simplicity for tax and employment considerations for both the foundation and myself, given the international nature of all of the directors.
Well to be fair I think having Dermot review his friends legal contract with the dao is a conflict. That being said I understand the tax burden and complexity so it makes sense on that basis. But I don’t think directors should be compensated in anything but locked up pokt. This would keep incentives aligned. One of the biggest problems with rchain in my opinion was the compensation model for directors. Especially because many of them were friends prior to the creation of the dao. So it makes me really nervous that you guys are now both paid directors in light of your friendship. It just reduces oversight. I think if you both need compensated in fiat then one of you should step down
Dermot and I have worked together in the past and are friends. We have also worked with a lot of the Pocket community over the years. I’d also like to think we are both friends with a lot of the Pocket community and have shown our integrity and commitment to Pocket.
We are directors of the foundation, which comes with a fiduciary duty to act in the best interest of the foundation which is a legal entity. Neither Dermot, Jack or I have anything to gain from putting the foundation at risk, we all take our reputations seriously.
I understand ,and you guys have done nothing wrong. But my experiences with daos lends me think it is not a good idea to have such close friends be directors. You guys are creating policies and voting lock step. It would be really hard to go against both of you. That being said the biggest concern is how you both are compensated. If you were compensated with vested pokt I would be totally ok with this.