GOVERNANCE OF COLLECTIVE MANAGEMENT ORGANISATIONS
Part 5 of 13 Reasons Why Kenyan Music Creators Need a New CMO Legal Framework
The General Meeting plays a critically important role in the governance structure of Collective Management Organisations.
The general meeting of a CMO should be held regularly and should be properly regulated. Most of the recommendations included in this section are standard clauses found in laws regulating the governance of companies or civil associations in Kenya and around the world.
The rules on the operation and running of the general meeting should be clearly mentioned in a CMO’s Statute, and naturally follow the applicable laws of Kenya.
INTERNAL SUPERVISION OF COLLECTIVE MANAGEMENT ORGANISATIONS
Internal supervision plays an important role in the governance structure of Collective Management Organisations.
Proper internal supervision of the CMO management and operations by an independent supervisory body is an essential element of effective and transparent collective rights management.
Members of the supervisory body should be appointed by the CMO in the general meeting and normally represent the Rightsholders whose rights are being managed.
It may, however, sometimes be advisable, insofar as it serves the interests of the Rightsholders better, to appoint as members of the CMO’s decision-making and/or advisory bodies individuals that do not directly represent Rightsholders, but have commercial or legal experience that is valuable for the proper functioning of such body, so long as representatives of Rightsholders make up more than a simple majority of decision-making bodies, unless subject to specific applicable rules or government regulations.
A CMO’s Statute should ensure a fair and balanced representation of its different categories of members on the board.
The requirements, established in the Statute, to apply to become a member of the Board, shall be clear, objective and not arbitrary.
The General Meeting may elect board members for their commercial, legal and other relevant experience, subject to any limitations provided by law.
AVOIDANCE OF CONFLICT OF INTREST IN COLLECTIVE MANAGEMENT ORGANISATIONS
Avoidance of Conflict of Interest policies & regulations play an important role in the governance structure of Collective Management Organisations.
A well-functioning CMO should take steps to avoid conflicts of interest and ensure the integrity of the board and the management of the CMO. These measures and procedures should preferably be included in internal rules, which should be reviewed regularly.
| 1. A CMO should have in place internal rules to avoid conflict of interest and, when such conflicts cannot be avoided, to identify, manage and monitor conflicts of interest which might prevent board members from discharging their responsibilities. |
2. These rules should include at least an annual individual statement of actual or potential conflicts of interest by each person managing the CMO, by each member of the board or by the respective proxies they might appoint.
3. A CMO should be governed independently and transparently, based on an appropriate legal structure, focusing on Licensees and intermediaries on behalf of the Rightsholders it represents, and distributing remuneration to them.