Note on Use of “Legal”
In this paper, “legally established”, “legally autonomous”, and “legal organization” refer to an organization that is recognized by the government of a country in a global region as a company or non-profit organization, which is not legally associated with any other organization (like AgGateway Global Network). The organization would be subject to taxation, reporting, etc. as specified by the jurisdiction in which it was established.
Background on Legal Autonomy
North American Experience
One key organizing principle of AgGateway North America (AGW-NA) in 2005 was industry-segment autonomy. At the time, and continuing to the present, industry segments operated in AGW-NA through industry councils. The concept of autonomy was therefore applied to councils. The main idea was that each industry segment should have the authority to determine its own priorities, organize and fund its own projects, and establish its own processes provided that all were consistent with AGW-NA’s mission. Council autonomy has worked well for AGW-NA, its value having been reconfirmed from time to time over the years.
Autonomy on a Global Scale
Several years ago a number of companies with global operations asked Rod Conner to develop a plan to help them leverage their North American connectivity investments in other global regions. Rod enlisted the help of Jim Wilson and the two of them quickly agreed that autonomy would be a key organizing principle in establishing regional AgGateway-like organizations. After all, their experience led them to conclude that if they were perceived to be pushing an American agenda, their message would be rejected. Consequently when Rod and Jim went to Europe, they were careful to avoid any suggestion of how a European organization should be formed, what’s its name should be, what its priorities should be, or how it should operate. They assumed that regional AgGateway-like organizations would be legally established in their region, have their own bank accounts, and have their own Board of Directors.
European Experience and Beyond
After a lengthy process, AgGateway Europe was established as a U.K. Private Company Limited by Guarantee. The choice of a U.K. company was driven by two factors: 1) the availability of legal resources at no cost; and 2) relatively little setup bureaucracy. There was no debate among Europeans as to the name “AgGateway Europe”, and there was consensus that the organization should borrow liberally from AgGateway North America’s policies, procedures, etc.
Meanwhile, Rod and Jim set out to lay the foundation for legally establishing AgGateway Latin America using the same basic formula. Rod and Jim’s Initial discussions with agriculture leaders in Australia, New Zealand, and Japan touched on legal autonomy as well.
Reconsidering Legal Autonomy
Observations on Legal Autonomy
Rod and Jim made a few observations over the couple years working to legally establish AgGateway-like organizations in various regions. Those observations include:
- Using the name “AgGateway” along with a regional indication (e.g., “Europe) seemed to be a given among regional organizers.
- The legal efforts of establishing an organization are substantial, dilute resources, and dampen enthusiasm for just getting work done.
- There are no apparent benefits of legal autonomy for regional organizations. (AgGateway North America may be an exception, but it is not the focus of this paper.)
- Rod and Jim’s concern about perceptions of pushing an American agenda seemed unjustified. In other words, nobody seemed to care about the national origin of any particular name, standard, practice, etc.
AgGateway North America’s Experience
AgGateway North America was established in 2005 as a United States 501(c)(6) organization known simply as “AgGateway”. This was several years before AgGateway Global Network was established (also as a 501(c)(6)) and Rod and Jim began their globalization effort. It has worked well and there is no apparent reason to consider changing.
AgGateway Europe’s Experience
AgGateway Europe’s (AGW-EUR) establishment was addressed earlier in this piece. Since establishing the organization, it has been difficult to work through the legal technicalities of establishing legal ownership comprised of member companies. Creating a bank account is not straightforward since it is a U.K. company and the Managing Director is Dutch and works in The Netherlands. As of June 2017, AGW-EUR faces a couple of options in the near future:
- Sort things out under the current structure
- Dissolve the organization as a U.K. company and reform it as a Dutch Stichting, a German organization, or something else.
- Dissolve the organization and reform it as an AgGateway Global Network chapter. This concept is addressed later in this piece.
In September 2017, the AgGateway Europe Executive Committee decided to recommend option 3 to the AgGateway Europe Steering Committee.
AgGateway Latin America’s Experience
Early in the development of AgGateway Latin America (AGW-LATAM) Rod and Jim concluded that legally establishing the organization would be a challenge. It was clear to Rod and Jim that AGW-LATAM would need to be based in Brazil for a number of reasons, which are not relevant to this piece. There are two primary challenges:
- Brazilian companies and global companies with Brazilian operations would be reluctant to participate in the legal establishment of an AGW-LATAM without compelling project underway.
- Establishing a legal organization in Brazil is very complicated and can take a long time.
AgGateway Japan’s (Asia) Experience
Agriculture leaders in Japan quickly recognized the value of establishing an AgGateway Japan (AGW-JPN). Some of the bigger Japanese companies (e.g., Sumitomo and Mitsubishi) suggest careful consideration of the scope, pointing out benefits of an Asia. The challenge is that an AgGateway Asia that is legally a Japanese organization, has only Japanese members, and has only Japanese leadership would likely not be easily accepted in China. As of September 2017, AGW-JPN is working through their options.
AgGateway Australasia’s Experience
As of September 2017, AgGateway Australasia has not explored legal organization options. They will likely begin considering such options in late July.
AgGateway Global Network Structure and Funding
Before addressing the final topic—_An Alternative to Legal Autonomy_—it is important to understand AgGateway Global Network’s (AGN) structure and funding.
AGN performs three primary functions:
- Facilitate the establishment of AgGateways in new regions.
- Facilitate processes among AgGateways to promote implementation consistency across regions.
- Help coordinate activities across regional AgGateway
Performing these functions requires funding for staff compensation, travel (often international), technical resources, and legal/professional services. Initially this funding was provided by companies contributing funds directly to AGN. Over the course of the startup period, direct contributions have transitioned to funding provided by regional AgGateways. For example, in 2017, AGW-NA and AGW-EUR each budgeted $40,000 to fund AGN.
An obvious pair of questions for stakeholders interested in establishing an AgGateway in a region are: 1) Would a newly formed AgGateway need to pay AGN $40,000 to get started? 2) If so, what would the timing of that payment be? Unfortunately the answer to those questions is not straightforward. As the previous discussion would suggest, AGW-NA and AGW-EUR are the only two AgGateways that have been formally established as of September 2017. Each AgGateway would be expected to contribute funds to support AGN. The AGN budget and the expected contribution by each AgGateway would be set by the AGN Board of Directors (BoD). The AGN BoD is, as of September 2017, composed of four representatives from each regional AgGateway, that being AGW-NA and AGW-EUR. Any newly established AgGateway would name four directors to the BoD and then the new BoD (with now twelve members) would reconsider the BoD composition rules. (e.g, Perhaps the BoD should be composed of three representatives from each AgGateway rather than four). Whatever the BoD decided would be effect until the next AgGateway was formed and its directors named. (Technically the BoD can reconsider the composition rules at any time.)
An Alternative to Legal Autonomy
Rod and Jim’s observations and the challenges faced in Europe, Latin America, and Japan led them to reconsider the emphasis on legal autonomy. They reached the following conclusions:
- Each AgGateway retains the right to establish itself legally in a region.
- AGN should offer an option for an AgGateway to be formed in a region as an AGN chapter.
Services AGN would perform for an AGN chapter may include, but not be limited to:
- Website hosting
- Wiki administrative support
- Email lists
- Webinar production support
Process for Establishing an AgGateway
- Introduce concept
- Develop interest
- Identify potential projects
- Determine commitment
- Identify leader (president, managing director, etc.)
- Raise funds
- Establish chapter and launch projects