Introduction

LONAP is a not-for profit company, limited by guarantee. It is owned entirely by its Members and exists only to support the best interest of its Members in the activity of Internet Interconnection. Our customers choose to become owners ("Members" and "the Membership") at the time they connect, in order to take an equal and active part in running the company by exercising their right to vote.

People at LONAP make decisions all of the time. Key decisions relating to day-to-day business are made by the LONAP staff members; decisions relating to strategy are made by the elected Board of Directors at regular Board meetings; and overarching policy is decided at open meetings of our entire Membership. The smooth functioning of the company, your company, relies upon all of those decisions being taken in the best interests of the Membership. This document explains LONAP's decision making process, which is used to help the LONAP team and Membership continue to manage the company prudently in the best interests of the Membership. It will do so by explaining who is responsible for decision making, and to whom they are accountable for those decisions.

Key Individuals and Teams

LONAP has a Board of Directors ("the Board"), who each have a fiduciary duty to the Company and to the Members, and other duties imposed by law and by the constitution of the Company. Those duties are defined within the Articles of Association of the Company ("the Articles"), a document which can only be changed via a process contained within the Articles, that requires approval by vote at the Annual General Meeting of Members. The Articles also sets out the procedure that Members use to appoint the Board. The Board appoints a Chairman from amongst itself, whom has additional responsibilities as described in the Articles.

LONAP staff members are individuals who receive a salary from LONAP, or otherwise hold a service contract with LONAP in order to perform some various duties. Directors who are elected and then sign a service contract are not treated as LONAP staff members in this document.

No LONAP staff member shall be eligible to stand for election to the LONAP Board. An individual will generally refrain from standing for election to the LONAP Board if they have served on the board for eight or more consecutive years (this is not prohibited in the Articles, and if a Board candidate is exceeding this maximum, they will explain why this is recommended in a written election statement to Members.)

The Board shall appoint a Managing Director, who may not be an individual from amongst their group. The Managing Director will be an executive charged with managing day to day operations at LONAP. The Board will provide a service contract and job description to the Managing Director. The Managing Director will be a full voting Director of the Company and joins Board Meetings.

The Managing Director can employ individuals with key skills that support the work of LONAP, in order to help it achieve the strategic goals and objectives, and in accordance with the annual budget approved by the Board. Anyone employed by LONAP (directly or indirectly) will have an employment contract or a service contract with LONAP, signed by the Managing Director.

Making and Communicating Decisions

The Board is responsible for key decisions regarding the strategy of the organisation. These include all decisions relating to the product strategy (including but not limited to: datacentre partners, pricing, and positioning). The Board strategy will be communicated from time to time to the Managing Director via written instruction from the Chairman, or minutes of the Board meetings. Such communication is confidential to the Board and LONAP staff.

The Managing Director is responsible for day-to-day decisions relating to LONAP operations. The Managing Director will write and maintain an Activity Plan that describes how the strategy will be implemented. The Activity Plan will describe twelve months of activities. Each time the Activity Plan is updated (approximately every twelve months) the Managing Director will present it to the Board for ratification. A new Activity Plan shall not come in to force until approved by a resolution of the Board at a Board Meeting.

The Managing Director will also maintain a detailed budget that accounts for anticipated incomes and expenditures according to the needs of the Activity Plan. The Board will appoint an elected Director to act as liaison for this topic ("Finance Director") and the Board as a whole will approve the budget. The Managing Director is responsible for tracking the actual revenue & spend against the Budget and reporting/explaining any variances. The Managing Director shall not bind the company in any contract or employment with an annual value of more than £30,000 without approval of the Board.

Once the Activity Plan and Budget is approved, the Managing Director will set objectives to all LONAP staff which make clear how these individuals will contribute to the organisation.

Work that is included in the Budget and below the threshold of any financial controls in company policy, and written in an approved Activity Plan will be undertaken without further reference to the Board by the Managing Director, but it is expected that the Managing Director and the management team will demonstrate progress to the Board or Membership at appropriate meetings.

Being Accountable for our Decisions

Accountability means that the entire LONAP staff and Board can explain why any decision they made is in the best interests of the Membership. Ultimately, the Board are accountable to Members, and will report on key Board activities and decisions at the Annual General Meeting. The Managing Director is accountable for decisions to the Board, via line management and appraisal meetings with the Chairman; the Managing Directors appraisal shall be conducted by the Chairman plus one other Board Member. Any other team members will report to and be accountable to the Managing Director who will hold appraisals. All of these such meetings should occur at a frequency agreed by the Managing Director but at least once in a calendar year.

All Directors of LONAP, including the Managing Director, will register non-LONAP interests with the Board at their first Board Meeting, and announce any changes at the next meeting. These declarations will be minuted. Interests include Directorships of other companies, any companies in which the Directors hold a significant material interest, and organisations paying the Director any fee, income or incentive which relate to the field of telecoms and internet infrastructure. Directors with an interest in an organisation that is the subject of a discussion at a Board Meeting shall recuse themselves from the relevant parts of the Board meeting, except when specifically invited to remain by the Chairman (or Vice Chairman in the event that the Chairman is in conflict) for the discussion. Directors who hold significant interests in telecom and internet infrastructure companies will also report this to Members at Board elections and communicate changes to this list of interests via written communications to members.

Winding up process for LONAP Limited

If the quarterly income or costs of the company vary adversely from the budget by more than 15% for two consecutive quarters, the Directors shall meet within fourteen days to examine the company's financial state including Profit and Loss and Balance Sheet.

If the results of this examination are that the company cannot continue with the current budget, then a revised budget must be agreed upon and implemented.

If it is determined that a revised budget will not allow the company to continue to provide its services, then a General Meeting must be called. The purpose of the general meeting of the company is to pass resolutions:

• for voluntary winding up; and
• appointing one or more liquidators of the company.

Once the Company has been wound up, the liquidators will distribute an equal share of the asset pool to each member of the Company as recorded in the Register of Members on the day of the General Meeting.

Voting Methodology

A poll taking place online will use a reputable third party platform. The poll will be set up and run by the poll administration team and supervised by the poll supervision team.

The poll administration team:

• Will consist of the Managing Director and between one and three members of the permanent staff.
• Will prepare the setup of the poll in line with these guidelines.
• Will accept, validate, and enter proxy votes on behalf of the Chairman.
• Will close and verify the results of the poll and deliver these results to the Chair of the meeting.

The poll supervision team:

• Will consist of at least one and preferably two members of the Board of Directors, excluding the Managing Director.
• May not include any Director who has a vested interest in any matter being voted on (such as being up for re-election)
• Will verify the settings of the poll prior to its start.
• Will monitor (in person or via screen-share) the entry of proxy votes into the voting system.

Proxy votes will be submitted to elections@lonap.net (as well as copied to the company secretary) and this address will be delivered to the poll administration and supervision teams and nobody else. The instructions of these proxy votes may not be revealed to any other person, neither within LONAP nor otherwise.

Remuneration

LONAP Directors and team members are remunerated for their work in accordance with their employment contract or schedule of rates in a service contract. LONAP Board Members have a duty to ensure that team members are paid according to that schedule. LONAP Board Members are paid a day rate for work that they carry out for LONAP. The total time spent (and therefore remunerated) should not exceed eight days for a Director, ten days for the Financial Director, and sixteen days for the Chairman per year without prior reference to, and agreement by the Board.

The Board are responsible for ensuring that the Managing Director and LONAP staff member remuneration is both appropriate for their work and performance, and competitive in the market.

It is the intention of the Board that members of staff are paid a bonus in addition to their salary based on specific, measurable, achievable, and relevant personal targets that are able to be delivered in the current financial period. For the Managing Director, these targets are set in the Activity Plan for the financial year, while for other members of staff their personal targets are agreed between them and the MD at the start of the financial year.

The measures of success for the Managing Director shall be determined by the LONAP Board in advance and included in the financial year's Activity Plan. The determination on whether these targets have been met is made by the LONAP Board (or a subcommittee to whom they have delegated this responsibility) at the end of the financial year.

The maximum bonuses paid may not exceed the financial year's budget approved by the Board.

Document Management

This document is maintained by the Chairman and can be revised by a simple majority of the Board at a Board meeting. Where a conflict exists between the contents of any LONAP constitutional document, the Articles always take precedence.

Last updated April 2024