CMO-Member FINANCIAL Relationship proposals for kenya creative sector

THIS POLICY PROPOSAL IS ABOUT PARTICULAR MONEY, GOVERNANCE & Financial management ISSUES CONCERNING THE CMO MEMBER RELATIONSHIP

Part 9 of 13 Reasons why Kenyan Music Creators need a new CMO legal framework

Due to the financial relationship between CMOs and their members we need a legal framework that explicitly regulates the financial relationship including distribution rules, deductions and any other money related relationship. Financial Mismanagement is a Crime. Lack of Financial Management Regulations anchored in Law is even a bigger Crime.

In this ninth installment of our 13 part series on Why Kenyan Music Creatives Need a New CMO Legal Framework we discuss the most important subject and that is the relationship between CMOs and their members. They have a financial relationship. In light of of the fact that CMOs in Kenya have an ugly disappointing financial history we believe its time to legislate a framework to govern this financial relationship. Actors, Visual Artists, Writers, Authors, Publishers, Producers & Performers are all affected. As we work on building compliance systems for users we equally must legislate protective measures for the vulnerable members of the CMOs. CMOs are private companies that must operate under financial transparency obligations guiding their leadership. This is how we fix the financial health of CMOs.

FINANCIAL AND ADMINISTRATIVE INFORMATION TO MEMBERS

We believe that given the role of CMOs in ensuring timely and efficient Distribution of remuneration to their Rightsholders, a CMO is expected to provide its members with information about its financial results in an accurate, transparent and timely manner. This information should include, without being limited to, its:

Gross Rights Revenue broken down between the main collection sectors like Public Performance : radio, tv, pubs, saloons, matatu etc. ;

Operating Expenses broken down between the main collection sectors eg we spent Ksh1000 hiring agents to collect Ksh 100,000 ;

The social and cultural deductions it has made; and detailed and justifiable programs developed after participation with members

The amount of Distributions made.

The statements which a CMO provides to each Rightsholder should allow such Rightsholder to verify the sources of the amounts due in respect of each of their his/her works.

LEGISLATIVE PROPOSALS

1. A CMO should notify its Members and Rightsholders electronically via email and Short Message Text (SMS) that its Annual Report, including its income statement and accurate information about its collections, Operating Expenses, and deductions, is available for download from its website or via other reasonable means at least 30 days before an AGM.  

2.  A CMO should provide a Rightsholder with a list of the members of the board and the rights category each of them represents. A CMO should also make available information regarding the total amount of remuneration and other benefits paid to the members of the board and its management team.  

3.  A CMO should electronically make available information to each Rightsholder to whom it has attributed Rights Revenue or made payments in the period to which the information relates and who is entitled to a Distribution. Such information should include:  
a. A statement of monies attributed to such Rightsholder, including information on Operating Expenses and deductions and the amounts subsequently paid to the rightsholder.  

b. A breakdown of Rights Revenue per main category of rights managed and per type of use.  

c. A distinction between Rights Revenue earned nationally and Rights Revenue received on the basis of Representation Agreements; and    

d. Information regarding any amounts attributed to the Rightsholder which are outstanding for the period concerned.  

e. The CMO should make available the Distribution rules to its Rightsholders, if possible, by electronic means.  

NOTIFICATION OF CHANGES IN THE CMO STATUTE & OTHER PARTINENT RULES

A CMO should notify its Members and Rightsholders about changes in its Statute and about other pertinent changes that may affect their respective Members’ rights and/or obligations.

The Current approaches by Kenyan CMOs need more member participation and transparency. Issues such as elections of directors and amendments to the constitution are delicate matters that must be governed by legislation.

CMOs are political in nature. Their directors are usually elected after long heated and at times choreographed elections that leave members divided. Technology can help with this. MCSK which claims to have 15000 members must be in the forefront of embracing digital technology to govern its voting & governance systems.

We also need to move from regional appointments to rights holder based competent appointments. Producers for instance can hire a top tier consulting firm as a consultant to represent their business development interests in the board. The boards must have a blend of creative and business development talents.

LEGISLATIVE PROPOSALS

A CMO should notify its Members and Rightsholders, electronically, about important changes in its regulations on representation in governing bodies, participation at meetings, voting rights and other governance issues.

Prior to the approval of the Statute by the General Meeting, CMO Members should be notified of possible amendments to the Statute, with reasonable notice in order to evaluate them appropriately, if possible. Technology should aid these processes.

black rotary telephone on white surface

CMO CONTACT INFORMATION

It is essential for effective communication between a CMO and its Rightsholders and Members that comprehensive contact information be both available and kept up to date.

LEGISLATIVE PROPOSALS

  A CMO should:  

(a) make available to each Member and Rightsholder it represents its up to date contact information, including; postal address(es), email address(es), telephone and any other mode of communication; and  

(b) indicate the office hours and days of the week during which the CMO may be contacted  

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