Foundations, boards, and independence

The Matt Mullenweg and WP Engine saga continues, with WP Engine filing a lawsuit yesterday evening. It's quite a read, and I may pick it apart later, but there's a lot to digest.

If that wasn't enough, Josepha Haden Chomphosy is leaving her role as Executive Director of WordPress, and her employer, Automattic. No doubt, this is a major blow to the WordPress community, and a significant shock to anyone who follows the ecosystem. The implications here feel immense.

Staying current is a near-full time job at this point, so I'm not even going to try, and instead focus on less current topics.

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One of the key arguments made by Matt Mullenweg during his public statements is that he is but one of three board members at the WordPress Foundation (WPF). As the owner of the WordPress trademark and a not-for-profit public charity, in the eyes of US law, the WPF has an obligation to protect that trademark and ultimately has the final "say" in the actions taken to protect it. The argument from Mullenweg goes something like this: if this "scorched earth" approach is not in the public's best interest, the other two board members could intervene. But, who are the other two board members, and where are they?

First, a small history lesson.

Creation of the WordPress Foundation

In 2010, Mullenweg transferred the WordPress trademark to the newly-created WordPress Foundation. Prior to this, Automattic had registered and owned the trademark. The WordPress Foundation, as described at the time, was "the non-profit dedicated to promoting and ensuring access to WordPress and related open source projects in perpetuity."

Structurally, the WPF was formed as a 501(c)3 organization, and specifically a "public charity" which, according to US tax law, requires that the organization "must not be organized or operated for the benefit of private interests."

When initially founded, only Mullenweg and Rose Goldman were named in tax records, as President / Treasurer and Secretary, respectively. Goldman at the time was Mullenweg's Chief of Staff at Automattic, but it's hard to overstate her impact—she was involved in Audrey Capital, Automattic, and the WPF.

Enter Mark Ghosh

In 2014, for the first time in its short history, a formal board of directors was included in WPF's yearly IRS filing. Three names were listed as directors: Mullenweg, Jason Hoffman, and Mark (Madhujit) Ghosh. Goldman transitioned to Chief Financial Officer.

(After leaving Mullenweg's employ in 2018, Goldman was removed as CFO of the WPF the following year.)

Jason Hoffman is that Jason Hoffman, well-known in the tech industry. Notably, on his LinkedIn, Hoffman lists a contractual relationship with Automattic, serving as the "Executive In Residence & Advisor to the CEO" through February 2024. Whether this was a paid relationship or not was perhaps a good question to ask when this initial board was formed. However, as of the 2016 IRS filing, Hoffman was no longer on the board.

The other board member appointed in 2014 is Mark Ghosh. When added to the board, Ghosh had recently sold his website, Weblogs Tools Collection, to Mullenweg via his Audrey Capital company. The purchase price was never announced, so it's unclear how much money changed hands at that point, if any—the purchase could have been funded by equity in Audrey or Automattic.

Ghosh mostly disappeared from the internet after the sale of his site. Outside of a few remnants of the past (About.me, Twitter, Flickr), recent updates only exist on LinkedIn and Facebook pages, the latter of which lists work experience, including "Board of directors at WordPress.org" [sic], notably not mentioning WPF but instead the Mullenweg-owned WordPress.org.

Enter Chele Farley

In 2016, Jason Hoffman left the board of directors and was replaced by Chele Chiavacci Farley. At the time, Farley was relatively unknown—her listed experience was as a partner and managing director of Mistral Capital International.

It's not unusual for companies, including non-profits, to include "outside" board members, ones that are not within its industry, which can be a good gut check on approach. What is a bit unusual is what happened next...

In early 2018, Farley officially started her campaign for United States Senate, running for a seat representing the State of New York. Farley ran as a Republican against the Democratic sitting-Senator Kirsten Gillibrand. Personally, I don't consider Farley's politics to be important to her ability to act as a board member of WPF, but others may feel different.

What I do consider important is that Mullenweg donated to Farley's campaign. Among other political donations in 2018 to both Republican and Democratic candidates, Mullenweg donated $5,400 to Farley's senate campaign. Farley lost her bid for Senate, but ran for the House of Representatives in 2020. Mullenweg donated $5,600 to Farley's house campaign, which she ultimately lost as well.

Outside of her very public campaigns for office, Farley does not have much of an online presence and, in fact, the known domain of Mistral Capital International, mistralcapital.com, is defunct, last working in 2013 according to the Wayback Machine. (While it's possible that the company's new domain is mistral.capital, I suspect that's a different "Mistral Capital" in the pharmaceutical space, where Farley also operates.)

Where is the board?

WPF is not an "open" foundation. While some foundations, especially those in the open source ecosystem, publish minutes or have electable boards of directors, WPF does not disclose any information beyond what is mandated by the IRS (Form 990) and annual reports that provide context about that mandated disclosure.

Now, WPF needn't share its meeting minutes, nor really interact outside of the (likely virtual) boardroom, but for a foundation that oversees an open source project, it feels awkward that only Mullenweg has spoken to the community during the 8 years this board has represented the WPF. Given the very public feud between Mullenweg and WP Engine, with its sole focus, from Mullenweg's side, on the WordPress trademark, which is nominally owned by the WPF... where are Mark Ghosh and Chele Farley in all of this?

What is independence, really?

In my post about investments, I noted the potential for conflicts of interest when one person or company invests in another. The same holds true here: money has exchanged hands—Mullenweg has given money to both Ghosh and Farley—leading to the potential of a conflict of interest.

To be abundantly clear, there is no requirement that non-profits elect independent boards of directors. There is a requirement that a public charity "must not be organized or operated for the benefit of private interests." Given how much the WordPress trademark is benefiting one person—or, certainly, one company—and given that the trademark is, by far and away, the most valuable asset of the WPF, a conflict of interest is a reasonable perception.