An Association Without Members? A Legal Perspective
In this article for Boardroom, Giulia Mauri and Andréa Petemba, from our partners at Kadrant, look at the new shape that associations could take in the future, from a legal and ‘community’ perspective.
With the global pandemic and the rise of social media, we have seen a change in the way associations work and interact with their members and their stakeholders: many seminars are now webinars, events are organized in a hybrid way and contacts with stakeholders are more and more likely to take place virtually kept.
This new way of working allows associations to explore new horizons and, through a strong presence on online platforms to involve, in their respective activities, not only their members but also, stakeholders which are interested in their activities and wish to actively support, participate and interact with other likeminded people.
This observation raises an interesting question: what if we were to rethink a new model for associations where, instead of an exclusive group of ‘members’ with specific rights, there is a community that shares a common interest in the purpose of the association and participate in its overall activities? And if associations move from a community of members to an online community of interested stakeholders what would this change from a legal point of view? Would this even be legally possible?
To answer these questions, it might be useful to go back to the basics. What is an association? How does it work?
The role of members in associations
From a legal point of view, an association is a group of stakeholders who wish to work together to reach a common not-for-profit goal and purpose. Those stakeholders are the members of the association.
An association is a democratic entity where members elect their representatives, the directors, to manage the association on their behalf. If the trust between the members and the directors is broken, the members have the right to remove directors. They approve the budget and the financial statements of the association, therefore further balancing the powers of the directors and deciding whether a certain budget is considered appropriate for the functioning of the association and finally whether that budget has been well spent and whether the financial statements may be approved.
The participation of members in the life of an association is necessary to guarantee that the association functions in a democratic way.
However, there are situations where one could question whether members are indeed truly interested in having and exercising the democratic rights described above. Indeed, many directors have been confronted with cases where members participate in seminars and events, but when it comes to exercising their rights, electing directors, approving budgets and financial statements, or voting on amendments to the articles of association, they are quite passive and simply not interested in participating in the organization’s corporate governance.
Towards new association models
Some stakeholders may not particularly wish to become members of an association: they’d rather be informed of the initiatives taken by it, participate in the activities organized and interact with peers and other like-minded individuals and organizations.
Could one, therefore, imagine associations which do not have members, but instead have a strong online presence, for example, an online platform made available to all individuals, groups or other organizations which share the same interests?
The creation, management and development of an online community seem to be pretty much aligned with the purpose of any association: to put together a group of people who share a common purpose and who take different actions to promote that purpose (organization of events, lobbying, conducting research, etc.). Indeed, the concept of a strong online community is in line with the pursuit of the purpose of an association: individuals, groups or organizations would interact with each other, participate in the activities of the association and contribute to the pursuit of these activities with a view to reaching the goal for which the association was created.
In this scenario, there would be no categories of members with specific rights given to them, anyone interested in the activities of an association could participate, regardless of the fact that they are members or not. This model could promote increased participation by the community and interaction amongst stakeholders.
However, what would be the legal framework of such community engagement from a legal point of view? Can an association without members, an entity that is purely driven by an online community, be still legally defined as an “association”? If so, who would then elect directors, monitor the economic performances of the association and decide whether or not the activities taken by the directors are indeed aligned with the purposes of the association? Would directors be still independent when they are exposed to constant judgment by participants to an online community who share their thoughts without having any real involvement in the governance of the association and therefore no duty towards the association and its directors?
Increasing participation and promoting interaction amongst stakeholders can certainly improve the performances of associations and that those goals may certainly be reached by a targeted use of online platforms and/or a well-managed presence on social media.
However, members are a fundamental element of any association. Being a member brings a sense of belonging to a community, not just an online, virtual community, but one that has control over the activities of the relevant association and has a say as to the appointment of the people who are meant to manage such association. Being a member entails benefits, but also obligations: a community totally detached from any duty could be counterproductive as the directors would then not be judged based on facts (for example their management of the association) but purely on the basis of the very emotional criteria that often animate social networks.
However, there is definitely a balance to be found between the rights given to the members and the possibility for other interested third parties who want to actively be engaged in the association to participate in its activities through other means.
Opening up any association to the participation of non-members requires that such participation be always balanced with the participation of, and the advantages granted to, the members. This is a delicate balance to reach and to manage.