Just over a year ago, Shaanaz Gokool, a woman of colour and CEO at Dying with Dignity, wrote a letter to her board of directors of the Canadian nonprofit. She presented a list of grievances, including pay equity (her predecessor had been paid more despite a narrower range of responsibilities) and ongoing experiences of systemic discrimination that undermined her ability to do her job. The pay equity issue was eventually resolved—but the systemic discrimination issues, which Gokool found to exceed federal and provincial human rights code thresholds — remained. Gokool requested a third-party mediation so that she, and the enterprise, could resolve the issues and move on in a positive way.

Soon after, the head of the Board’s human resources committee requested a meeting – Gokool thought to kick off the long-awaited mediation process. Instead, three board members showed up at her office and said, “You’re fired.” They slid an envelope across the table containing the paperwork, handed her a box for her things and coarsely ushered her out the door which made Gokool feel like she was a military grade threat. When she stopped to comfort a close colleague who, after hearing the news, was sobbing in her office, one of the board members attempted to block Gokool’s path.

“I really believed the organization was going to fulfill its commitment to mediating. I was surprised…it was abrupt…it was very shocking.”–Shaanaz Gokool

A few months later, a new CEO, a white woman, was hired as Gokool’s replacement.

To this day, the board denies any wrongdoing. So much for dignity. Hello trauma for all. 

A year later, Gokool has not been able to find employment in her field.  She believes it’s because she now has reputation as whistle blower, a troublemaker, an untouchable.

The nonprofit, the board clearly failed to treat their living employees with dignity. As for governing with care via a social justice lens or in accordance with their own stated “person-centered code of conduct,” The Dying with Dignity board, even if on safe legal grounds, gets a total fail.

Unfortunately, Gokool’s experience is far from unique. 

Set Up to Fail

There is a profound lesson here for founders. Most startups and their advisors ignore what is now one of the most important steps in the creation of a new enterprise — crafting meaningful and enforceable organizational bylaws.

But guess what? Times are a changing. Social justice is now a global concern. Forget shareholder activism. Today’s stakeholder activism demands your bylaws protect human rights and fight systemic racism — with increasingly loud voices. Failing to listen could sink the reputation of your enterprise along with access to funding, talent, government contracts and customers. And you could well be slapped with a human rights lawsuit.

Need more convincing?

Consider the impact on the Green Party of Canada when they recently hired an Executive Director who had a history of sexual harassment related allegations against him. During his several years on the leadership team of Engineers Without Borders (EWB) (#aidtoo), Prateek Awasthi also participated in IWB executive team efforts to discredit and orchestrate retaliation against whistle blowers. Former EWB employee Chelsey Rhodes broke her nondisclosure agreement in 2019 and created an online space for other victims to connect and come forward. About 90 people expressed support and 35 additional incidents were reported. Aakhil Lakhani, another former EWB employee who was sexually harassed and silenced, also broke their nondisclosure agreement in early 2019 to call out Awasthi’s conduct. Still the Green Party, while under the leadership of Elizabeth May, hired Awashi in May 2020. Several Green Party leaders and staffers protested his hire. Two staffers quit.  Party members threatened to leave.

The Green Party’s Federal Council’s (board) response to the outcry: maintain their position that he had learned from his past mistakes and, well, all that was in the past. 

Those harmed disagree, vehemently. His misconduct still impacted their lives. Many had not yet healed. Chelsey Rhodes, who filed her grievance seven years ago, organized a recent GoFundMe campaign to help Lakhani with their legal costs associated with breaking their silence, an example of feminist solidarity.

All this raises an important question. Who gets to decide when it’s ok to exonerate past behavior? The perp? Or the victims? And how much did anyone learn given the uproar from past victims and the Green Party’s stubborn defence of their hire?

The Green Party’s constitution and bylaws outlines a clear fiduciary duty to advance social justice, but its Federal Council  gets a fail on follow through and implementation. It’s not enough to market progressive intentions, the governing body has to act in alignment with those values and be clear about interpreting them — who will the board protect, the organization or the people the organization serves?

Another social justice organization, Equal Voice, faced similar fallout after firing three women of colour –initially hired to increase diversity then fired for speaking up about oppressive practices. The national nonprofit, which promotes women in politics, later struggled to keep funders, four directors resigned, and even supporters called into question the rationale of organization’s entire mission. Equal Voice bylaws make zero reference to social justice responsibilities although the goal of the nonprofit is to advance equality.

In August, LiisBeth called out the government funded nonprofit incubator Futurepreneur for its bungled response to a complaint of racism levelled against one of its volunteer mentors. Did their conduct follow rules in their bylaws when it comes to social justice issues? Hard to say. Unlike our other examples cited here, their bylaws are not available online via a Google search.   

Underlying all these cases is a problem of governance, namely, out of touch and/or ignored bylaws. And that leaves enterprises purporting to advance social justice doing the exact opposite – casting out whistle blowers as troublemakers instead of embracing them as solutionaries to advance their cause.

Why Entrepreneurs Need To Get Their Bylaws Together

I work with hundreds of entrepreneurs and founders. Few understand or appreciate the importance and role of bylaws.

Bylaws are essentially your house rules — backed by the rule of law. They are the heart of your organization. They tell investors, stakeholders, customers and employees how you really show up in the world. They lay out what you see as your duty of care and the quality of fiduciary conduct you expect from directors.

They are more powerful than any website mission or diversity and inclusion statement. And they work to align staff conduct policies (which are often more progressive) with director conduct expectations.

But too often, bylaws are bare bones, written in haste and deliberately kept short. Lawyers routinely advise founders to do so because bylaws are harder to change later due to the consensus building required. Deferring the development of contemplative bylaws saves a startup time and money. And many will argue that badass bylaws, ones that demand accountability beyond minimum legal requirements, will make it harder to entice directors to join your board.

But template bylaws and laisse-faire attitudes towards them reflect classic patriarchal standpoints.They protect directors, not enterprise stakeholders.They focus fiduciary duty on money, power and efficiency. In recent years, more progressive organizations have amended their bylaws to follow the ESG (Environmental, Social and Governance) standards, which gives a nod to the environment (do no harm) and corporate social responsibility (CSR), which is primarily about giving back to a community, not doing what is just in your organization.

And it doesn’t go nearly far enough in throwing off the shackles of systemic oppression.

Why Bylaws Need a Feminist Frame

It’s time to move past governing like a patriarch to governing like a feminist. And this means reconsidering how power is distributed, centering the concept of care, and articulating a commitment to social justice.

Yes, this applies also to enterprises with a founder/director of one. Un-incorporated sole proprietors would also do well to consider these issues.

The first step? Acknowledge that we live in a white supremacist, patriarchal, colonial and neo-liberal capitalist society, hence, so are the bylaws such a society spawns. Accept that it’s no longer acceptable to perpetuate these and other oppressions fueling inequality. And move, embracing guidelines for better conduct.

The next step is to boldly commit to change and consider the following:

1. Centre care and healing as a key fiduciary responsibility: Add an expectation of care and dignified treatment of all stakeholders, especially survivors of oppressive treatment as a result of your enterprise’s actions. Duties should also include working to help those unintentionally harmed by hosting a healing circle, funding trauma counselling and sponsoring meaningful anti-oppression training.
2. Make clear your committment to advance social justice: Incorporate a commitment to meet or exceed  Employment Standards, pay equity and the Human Rights Act. Most bylaws say something general about following the laws of the jurisdiction.  But making compliance explicit sends a clear message.
3. Offer the Right to Be Heard: Update language regarding the right to file grievances, request independent third-party mediation, and survivor support — especially when the grievance relates to a harassment or human rights issue. Consider appointing an independent ombudsperson.
4. Clarify and restrict the use of nondisclosure agreements: Sometimes these are appropriate and serve all parties. But when it comes to rights violations, silencing someone from talking about trauma experienced under your watch is akin to cutting out their tongue. It also forestalls healing for all. There is no plainer way to say this: Stop this practice. Work to offer healing to all parties involved, even after a formal relationship is severed.
5. Reconsider the distribution of power: Boards are beginning to ensure diverse representation, but should also consider diversity of roles. Too often boards operate like aloof Kings and Queens in the Game of Thrones. Sure, they source input from staff who have lived experience running the day to day, but afford them little formal power to see their concerns addressed or ideas adopted. Establish voting seats for key staff, beneficiaries and/or customers. Diversity of roles incorporating lived experience along with distributed power will strengthen your organization’s ability to make wise decisions on tricky issues.
6. Make your bylaws accessible and transparent:  Post them on your company’s website. Make it clear what your company expects of its directors. Articulate them in clear accessible language. Invite stakeholders to review bylaws and comment before ratifying. By the same token, stakeholders — clients, partners, allies, beneficiaries and staffers — need to know board bylaws and play a part in holding directors accountable. Never seen them? Ask for them.
7. Own your good, bad and ugly: If you as the founder or board makes a mistake, don’t hide. Come clean. Tell people.  Explain how you are working to fix it. And share what you learned. Futurepreneur gets points on this one.
8. Adopt zero tolerance: Make it clear: Your enterprise will not accept any board candidate with a confirmed history of sexism, racism or human rights violations. Period. Do your homework. Many bylaws openly “cancel out” directors with bankruptcy declaration histories (an indicator of being a poor money manager). Enterprises who work with vulnerable populations require police checks. A socially progressive startup should not tolerate a record of misconduct on human rights issues.
9. Extend duty of care to include next generations: Consider including the Indigenous “Seventh Generation Principle” in board decision making to acknowledge that what we do today impacts future generations. This principle is often thought of in context of our relationship to mother earth. But it also applies to the relationship between the sexes and entire peoples – Indigenous, BIPOC, and migrant communities — for the benefit of future generations. Include a “reach out” principle, making it a fiduciary duty to forge meaningful connections with those harmed by our collective past. Chamber of Commerce member?. Sign up and support the Women’s/Black/LGBTQIA Chamber of Commerce as well, and articulate board support for aligned activism (such as Black Lives Matter or TheLEAP).

Still need more convincing?

At the recent Social Values conference, Stephen Nairne, Chief Investment Officer of Raven Indigenous Capital Partners, an Indigenous-led and owned financial intermediary, told the audience this: “Your enterprise will be called to account. We have to learn how to heal it when breached and potentially even reorganize to maintain their core purpose under radically changed circumstances.”

Or put another way, if you are not taking stakeholder activism seriously, rethinking your bylaws, or taking care in crafting new ones, you are screwing your investors, stakeholders, and community. Not to mention the future.

Be the change?  Fuck that. Get out there and lead the change.

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Contributor’s Bio: pk mutch (she/her) is a white, cis top end Gen X serial entrepreneur, feminist, street journalist, consultant and educator who lives in Toronto and enjoys getting from place to place by bike. pk mutch is also the founder and publisher of LiisBeth Media and Eve-Volution Inc. 

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LiisBeth Media is a womxn-led and owned indie enterprise which is surveillance free, ad free and supported by reader donations. If you found this article of value, please consider a $10 one time donation. Help us continue to amplify feminist voices and ideas in times when these voices are needed.

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Related Readings

https://www.liisbeth.com/bridge-over-tricky-waters-love-business-and-good-governance/

 

https://www.liisbeth.com/lead-fall-behind/

 

 

The post How to Govern Like a Feminist appeared first on LiisBeth.

Patti Pokorchak launched SageData Solutions with her romantic partner in 1991. “I got the first sale,” Pokorchak, now 61 years old, recalls. “We were co-founders in every way except legally. I had a romantic ideal that we would be together forever.” Today, the business is thriving, but the romance fizzled, leaving Pokorchak with no financial stake in the enterprise she helped start. “We talked about this being our retirement,” she recalls, sipping chamomile tea in the kitchen of a home overlooking a ravine in Toronto’s west end. The normally bubbly Pokorchak, now a business coach, laments, “The scary part is having given up a major part of my high-earning potential years to put sweat equity into something that did not pay off. I made a lot less than other comparable MBAs. I’ll never get that time back, or the energy to do it again.” Pokorchak sighs and says, “I was naïve.”

Understand the Need for Strong Governance

Pokorchak’s story illustrates a sad truth about start-ups and their founders. Almost half of start-ups don’t make it past five years. While co-founder romantic couples may be guided by trust more than other partnerships, Vanessa Grant, a corporate governance lawyer at Gowling WLG’s Toronto office, says they need to draw up proper contracts, just like everyone else. “This is a business relationship,” she insists. “It’s not about ‘I love you’ or ‘I don’t love you.’ Never confuse business with emotion.”

There is often more at stake when romantic partners become business partners, says Grant. “You need to realize nothing is permanent. Your business will change, your lives will change, and your priorities will change.” The disability of a partner and different visions for the business can upset stable partnerships. Given that close to 50 per cent of marriages fail, divorce may pose the greatest threat to a couple’s business relationship.

While some couples want to leave a legacy for future generations, fewer than 10 per cent of family businesses survive into the third generation. “The moment it goes beyond two people having fun in the basement, you have to think about succession,” says family enterprise advisor Paul Pittman in his chipper British accent. “A great business marriage is typically two sides of a coin. One person is the front like sales; the other is the back, the brakes, the Steady Eddy that says, ‘Hold on, have you thought about…?’ But if one gets distracted or taken out of the business, the risk is the end of the business. You’ve lost one of two fundamental cogs.”

Clearly, creating a sound governance model can help protect both partners and the business. Yet too few work on that planning. Even when couple-led start-ups survive into second-generation family businesses, governance models can be spotty. Says Paul MacDonald, executive director of the Canadian Association of Family Enterprises (CAFE): “Very few family enterprises have formal succession plans, advisory boards, etc.”

Start By Aligning Your Values

Chia Chia Sun and Gardiner Smith, established executives in other companies, had been romantic partners for four years before funding Damiva, a women’s health company that manufactures all-natural products for menopausal health. When I met up with them on a warm spring day in the bright Yorkville office of their investors, Smith explained why so few couples work on establishing proper governance. “The untold part of the story is there isn’t a lot of resources for corporate governance in small- or mid-sized companies,” he says. In the absence of formal governance processes, Smith adds that it is important to be aligned with your partner on a personal set of drivers and values. “Without this, you just have constant conflict.”

Sun and Smith are both financially aggressive and like to compete at the highest level, but Smith says other values shape their business plans. “Money as a game and a goal in and unto itself doesn’t hold much interest for us. It’s got to be driven by some values more fundamental than that,” he says. For example, Sun agonized for months about whether to use taboo-breaking marketing to sell Mae, their female vaginal lubricant. On the one hand, it expressed what she believed was needed to promote women’s health but she worried about the impact the risk-taking campaign might have on the bottom line. Smith finally advised Sun to let her principles guide her. “Let’s just get it out there and what will happen with the money will happen,” he said. It worked. Mae is now stocked by national pharmacy chains. And the cheeky packaging Sun agonized over? It went like this: “Feeling drier than a British comedy? Honey, you are not alone. Pick me up, take me home and get ready to feel like a teenager again, but with better judgement.”

Write Down Governance Practices—NOW!

Even before a couple establishes a formal model, Grant advises them to start documenting procedures from day one. “Write it down and write it down now,” she says. “Even before you get to the shareholders’ agreement, write down what each of you expect in a business relationship, and check to make sure those goals are consistent. Set up clear expectations, decision-making structures, and how the business relationship will terminate. Then once you have established the business relationship, revisit your governance structure, including shareholder agreements, on a regular basis.” She warns against being penny-smart and pound-foolish—it is far more complicated and expensive to untangle separate interests later, particularly if the relationship becomes acrimonious. The formality of documentation is good protection, she insists: “If you have set up the relationship on a business footing and are clear about what happens in various scenarios, then the chances that third-party investors will oust you are lower because you have demonstrated a level of business maturity.”

In 2011, stay-at-home mom Tracy Rossetti launched MyBabbo, a Toronto firm that creates photo books and digital albums—as well as online memorial sites—for bereaved grieving families. What had started as a way to help her family grieve the loss of her father-in-law (“Babbo” is dad in Italian) had grown by 2015 and was big enough for her husband, Mirco, to leave his senior marketing role at Nestle Canada and join the enterprise. As a way of kickstarting their business relationship and developing a shared business vision, the Rossettis wrote out 12 Guiding Principles, which are rooted in their shared Christian faith. For example, principle one is “Know Your Why” while two is “Be Rooted in LOVE.” When there’s no time to consult, the principles help them make decisions that adhere to the company’s vision. For example, after Mirco formed an alliance with a grief counsellor, he decided to buy the counsellor’s books and include them in the MyBabbo package provided to funeral homes—without raising their prices. This was an expense of thousands of dollars and increased inventory costs. Tracy later asked Mirco, “Are you sure? Should we ask funeral homes if they want it?” Mirco told her, “It’s the right thing to do.” Tracy agreed. “You’re right,” she said, “It’s only money,” which reflects MyBabbo’s seventh principle: “Give Back.”

After establishing foundation elements such as their guiding principles and a solid business plan, Tracy and Mirco are now in the process of incorporating MyBabbo. Their plan is to split shares evenly.

While it seems intuitive to go 50/50 in a couple-run start-up, not all businesses do so—nor should they. Rather, couples should consider who made the initial investment of time and money and who shoulders more responsibility. When Damiva incorporated, Sun and Smith did not take equal stakes in the company. Sun is the CEO (cheekily referred to as “the woman on top at Damiva”) and has “substantially more” shares than Smith, who is the president. “Ultimately we are business people, so we looked at the investment of money and time,” says Sun. “I hold a lot of responsibility for vision, financial return, and future opportunity.” A key step in establishing Damiva’s corporate governance was acknowledging who took the lead in the business. Smith adds, “When it’s 50/50, I think there is very little room for compromise; you can’t split the baby. If the relationship ends, one person has to buy the other out, or you shut down the business and distribute the proceeds.” But Smith insists he wouldn’t even accept equal shares. “It’s not right.”

Get Advisors On Board

David Smith, an advisor to family enterprises, says that establishing an advisory team can help couples develop a solid governance model. “High-level best practices in the early days are to put an advisory system in place, whether formal or not,” he says. He cautions against leaning too heavily on advisors who may be dependent on the business, such as lawyers or accountants, because their personal stake may colour their advice. A diversity of inputs in very important “to encourage a wider angle view,” says Smith.

Damiva recently established a formal board of directors. Prior to this, it retained advisors under consulting contracts. Its formal board now includes the CEO (Sun), the president (Smith), and a director who represents their investor group. The board’s mandate is to approve major expenditures, new hires, and executive terminations. Says Sun: “If you are going to bring in savvy, good investors, they are going to want a board of directors to protect their interests. And we didn’t want just any investors.” Smith concurs: “Health care is not a corner store. It is a globally competitive business.”

Even before establishing a formal board, Damiva created an arbitration clause to resolve disagreements about job performance. It was initially put in place to protect Smith as the minority shareholder. But now that Smith could potentially side with the third director to oust Sun, the provision protects her too. The assessment of “performance” can be subjective of course. “I don’t want to say we are disadvantaged as female CEOs, but we are in a unique position so we have to carve out these roles and pioneer in a way that a male CEO doesn’t need to.”

At MyBabbo, there is no formal board of directors as of yet. Instead, they have relied on a group of friends who bring marketing, operations, legal, and related perspectives. “We wanted to ensure a good representation,” says Mirco. The diverse advice validated their decision to adopt a business-to-business model with funeral homes (rather than a business-to-consumer model that might cover every life stage) to take advantage of an untapped market. Their advisory meetings were often casual dinners around their dining room table. Says Tracy: “We paid them with meatballs and good will.” Five years into their business, the Rossettis are now developing a more formal advisory process.

Define Distinct Roles

When a partnership spans both business and personal life, roles can get complicated. As marriages don’t have job descriptions, resentments often arise over how to divvy up housework, parenting, and financial contributions. Clarity takes on heightened importance when partners are negotiating more than whose turn it is to take out the trash.

Andrée Carpentier and Jordan Boesch, high school sweethearts who married in July 2013 after eight years of dating, didn’t wait nearly as long to enter into a business partnership. Four months after marrying, they took a tech accelerator program in Silicon Valley and shortly after launched 7shifts, a company that develops employee-scheduling technology. They started their company with a third co-founder, Johannes Lindenbaum.

Speaking from her office in Saskatoon, Carpentier recalls that mixing romance and business initially appeared risky. “One investor said he hadn’t seen many couples work well as business partners, but the only ones he saw who were successful had distinct responsibilities that didn’t overlap,” she says. The couple followed that advice. “Having clear distinctions in roles and decision-making helps us tremendously.”

Boesch takes responsibility for developing products while Carpentier oversees operations. That helped guide them through an early disagreement about industry specialization. Says Carpentier: “Jordan wanted to focus on the restaurant industry. I had a constant fear that we were missing out on a large market segment because 60 per cent of our clients at the time were not in the restaurant business. Jordan’s assessment was that the market was too saturated with generalist software. As concerned as I was, I respected his decision and agreed to just give it a whirl.”

It was the right call. Today, more than 90 per cent of 7shifts’ clients are restaurants, including major chains such as Boston Pizza, Burger King, and Booster Juice. 7shifts has expanded its roster of clients from 100 establishments in 2013 to more than 1,600 today. Over the past year, revenue has tripled and the company now employs a team of 14.

Delineation of roles is a best practice for the Damiva and MyBabbo couples as well. At MyBabbo, Mirco takes care of strategic planning, finance, and the inventory side of the business. Tracy leads sales, marketing, and their team of 15. Sun and Smith came from different silos in corporate America so they found it easy to divide and conquer, plus neither wanted the other to be constantly looking over their shoulder. “No senior businessperson would want to be micromanaged,” says Smith. “That would be extremely upsetting.”

Govern to Achieve Work-Life Balance

Since launching a start-up can be an all-consuming endeavour, the trickiest governance practice for co-founder couples is how to govern the balance between their work and romantic relationship. No one understands this more than Sun: “We work on extremely sensitive and taboo topics related to peri- and post-menopausal health. As our first suite of products is in the sexual health arena, we also delve deeply into relationship and intimacy topics in our daily conversations. So sometimes it seems that even our pillow talk is about work.”

What is Grant’s lawyerly advice on this topic? “Don’t lose sight of the fact that you still love your business partner. It’s important to maintain a relationship outside of business. Have fun. And you can have more fun after you deal with the governance stuff.”

For more information on good governance practices, visit The Canadian Coalition for Good Governance or The Institute on Governance.

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