Board Governance and Appointment Policy for the Polkadot Community Foundation.

Call for Community Participation: Appointment of Two Directors to the Polkadot Community Foundation

The Polkadot Community Foundation (the “Foundation” or “PCF”) is undertaking a formal process to appoint two additional Directors (the "DOT Directors") who are nominated by the Polkadot community. This step is intended to further decentralize and democratize the governance structure of the Foundation while maintaining a high standard of legal, fiduciary, and operational accountability.

The PCF plays a role within the Polkadot ecosystem by serving as an off-chain operational and legal entity capable of executing the will of the on-chain community. While Polkadot governance is fundamentally decentralized and on-chain, real-world execution often requires a legally recognized counterparty. The PCF bridges that gap, translating approved referenda into legally binding actions in jurisdictions where traditional legal infrastructure still governs financial agreements, contracts, and risk.

Through the PCF, the network can:

● Enter into enforceable legal agreements on behalf of tokenholder decisions.
● Disburse treasury funds to service providers, on different chains and in fiat, in a compliant manner.
● Conduct Know-Your-Client ("KYC") / Know-Your-Buyer ("KYB") checks, manage cross-jurisdictional legal exposure, and mitigate fiduciary risk.
● Provide legal continuity and real-world accountability for funded public goods.

As the number and complexity of proposals passed by the Polkadot treasury continues to grow, the addition of two (2) new community-aligned Directors is a meaningful step toward strengthening both the effectiveness and transparency of this structure.

Specifically, this initiative aims to:

● Broaden community representation within Foundation governance. Ensuring that PCF’s board includes individuals chosen by and reflective of the broader Polkadot ecosystem enhances the credibility and decentralization of off-chain implementation.
● Strengthen oversight and fiduciary risk management. The Foundation regularly enters into legal agreements across jurisdictions, and with more Directors in place, there is greater ability to responsibly review, deliberate, and oversee these activities with accountability.
● Increase transparency and alignment with DOT tokenholder expectations. Involving community-selected Directors ensures that the PCF remains anchored in the values and priorities of the Polkadot community and avoids siloed or opaque decision-making.
● Support more effective and timely execution of PCF projects
● Ultimately, this process is about strengthening the link between decentralized governance and real-world execution, while holding true to the principles of transparency, public service, and community empowerment that define Polkadot.

Roles and Responsibilities of Appointed Directors

Individuals appointed as Directors of the PCF will be required to attend meetings of the Foundation's Board of Directors, be named in the Foundation's Register of Directors & Officers (which is filed with the Cayman Islands Registrar of Companies) and be granted the same legal standing, rights, and obligations as existing members of the Foundation’s Board of Directors. This appointment carries both significant governance responsibility and legal liability, as Directors are tasked with the oversight and stewardship of an entity that serves as the real-world legal and operational executor of on-chain decisions made by the Polkadot community.
Directors must be capable of exercising independent judgment, acting in good faith, and discharging their duties with diligence and care in accordance with both the Foundation’s governing documents and the applicable statutory and common law obligations under Cayman Islands law.

Practical Expectations

The Director role carries meaningful fiduciary, legal, and strategic responsibilities. Appointed Directors should expect to commit approximately 10–15 hours per month, with flexibility depending on proposal volume and governance activity. Directors must be reasonably available for scheduled meetings, ad hoc reviews of proposals, and time-sensitive legal matters requiring board consent. Candidates should also expect to undergo regular KYC verification by counterparties, particularly when executing treasury-funded agreements, and may be required to provide updated, certified government-issued photo identification and certified English-language (or translated) proof of address in line with regulatory standards. While formal board or corporate governance experience is not required, nominees should demonstrate a strong working knowledge of Web3 technologies, decentralized governance, and the Polkadot ecosystem. Relevant experience may include participation in OpenGov, parachain or public goods initiatives, or broader ecosystem engagement. A commitment to transparency, decentralization, and responsible stewardship is essential, along with sound judgment, professionalism, and the ability to collaborate with fellow Directors, legal advisors, and the wider community.

Their core responsibilities will include, but are not limited to:

● Proposal Review and Oversight
Reviewing and voting on proposals submitted to the PCF for enactment. This includes assessing legal, financial, and operational feasibility, as well as ensuring alignment with the Foundation’s objects and applicable law. Directors must act with prudence and objectivity, particularly where legal agreements or fund disbursements are involved.

● Operational and Strategic Advisement
Advising on matters of general operations, resource allocation, and strategic direction of the PCF. Directors are expected to engage in decision-making that reflects both the long-term interests, success and sustainability of the Foundation and the expectations of the Polkadot ecosystem.

● Governance Communication
Participating in external communications with the Polkadot community and other stakeholders, particularly in relation to governance updates, proposal outcomes, and strategic initiatives. Directors should be prepared to operate transparently and maintain a high standard of accountability in a decentralized and public-facing environment.

● Risk and Compliance Review
Contributing to the identification and evaluation of legal, financial, and operational risks—especially in relation to treasury-funded agreements or engagements with third-party service providers. This includes confirming that compliance protocols such as KYB/KYC and anti-money laundering ("AML") checks are executed properly and that the Foundation remains in good standing with all applicable regulatory requirements.

Directors appointed to a Cayman Islands foundation company, such as the PCF, are entrusted with overseeing the activities and operations of the Foundation in accordance with its constitutional documents, applicable Cayman Islands law (including the provisions of the Companies Act, (as amended)) and certain common law principles. Under Cayman Islands law, it is possible a Director may also be designated as a senior managing official and, in some contexts, treated as a beneficial owner of the Foundation for purposes such as AML compliance and beneficial ownership reporting. While the Cayman Islands offers a flexible and favorable legal framework for blockchain and decentralized governance structures, directorship within such an entity carries with it material legal, fiduciary, operational, and reputational responsibilities and risks.

Fiduciary Duties, Non-Fiduciary Duties and Statutory Duties

Directors owe a range of duties to the Foundation, both under statute and at common law. These include, but are not limited to:

● responsibility for ensuring that the corporate registers of the company are kept in the appropriate location (at its registered office) and maintained in good order;
● responsibility for ensuring that the company complies with all reporting requirements under the Companies Act (as amended);
● responsibility for ensuring that proper books of account are maintained as are necessary to give a true and fair view of the state of the company's affairs and to explain its transactions;
● responsibility for ensuring that the company complies with the requirement to maintain a registered office in the Cayman Islands, which shall be at its secretary's business address;
● a duty to act in the best interests of the company;
● a duty to exercise their powers for the purposes for which they are conferred;
● a duty of trusteeship of the company's assets;
● a duty to avoid conflicts of interest and of duty;
● a duty to disclose personal interest in contracts involving the company;
● a duty not to make secret profits from the directors' office; and
● a duty to act with skill, care and diligence.

Breach of any of the above duties may expose directors to personal liability, including the risk of damages or disqualification from acting in a directorial capacity.

Legal and Contractual Liability

While the PCF exists as a separate legal entity, directors may become legally implicated in matters where:

● The Foundation enters into cross-jurisdictional legal agreements and disputes arise.
● Directors are found to have authorized transactions outside the Foundation’s objects or in violation of applicable law.
● Directors are found to have breached their fiduciary duties.
● Negligence or misrepresentation is alleged by third parties engaging with the PCF (e.g., service providers, grant recipients, or counterparties).

Importantly, directors can be named personally in lawsuits, especially in foreign jurisdictions where counterparties may seek broader liability coverage.

Regulatory and Compliance Exposure

Despite the Cayman Islands being a low-regulation jurisdiction relative to many others, Cayman Islands foundation companies are subject to important compliance requirements, including:

● AML and KYC due diligence processes for all counterparties.
● Filing and governance requirements under the Companies Act (as amended), including maintaining proper registers and fulfilling annual reporting obligations.
● Potential application of international tax information exchange regimes (e.g., FATCA, CRS), particularly where directors are tax residents of countries participating in such frameworks.

Directors bear ultimate responsibility for ensuring the Foundation adheres to these requirements, and failure to do so may result in fines, reputational damage, or in extreme cases, regulatory sanction.

Personal Liability and Risk Mitigation

Although directors are not liable for the Foundation’s debts or obligations in the ordinary course, they may incur personal liability in scenarios involving:

● Gross negligence or willful misconduct;
● Participation in fraudulent or ultra vires (beyond scope) acts;
● Authorizing payments in contravention of legal duties;
● Failing to properly supervise legal, financial, or compliance-related matters.

To mitigate these risks, directors are protected by:

● Directors & Officers (D&O) Insurance covering all Directors of the PCF: This provides financial protection against personal liability arising from decisions made in the course of fulfilling their fiduciary duties.
● Robust Legal Counsel: Directors have access to Cayman-based legal advice, particularly in connection with entering into agreements, interpreting the Foundation’s scope of authority, and managing cross-border legal risk.
● Collective Expertise & Decision-Making: The PCF Board comprises five Directors, two community-nominated DOT Directors and three fiduciary professionals with deep experience in Cayman governance, AML/CTF compliance, and cross-border contracting. Directors act as a board, not as individuals: proposals are reviewed and decided collectively, with deliberations and votes recorded in the minutes. DOT Directors are not expected to operate alone; they may benefit from the knowledge of their fellow Directors and, where appropriate, on advice from approved legal, accounting, and compliance advisors. This shared process materially reduces execution risk and supports consistent, defensible decisions.

Reputational Exposure

Given the PCF’s high-visibility role in executing on-chain governance outcomes into real-world enforceable actions, directors are inherently exposed to public and reputational risk. This includes:

● Scrutiny by the wider Polkadot community over funding decisions, implementation of referenda, or perceived delays.
● Community sentiment where directors are seen as overly risk-averse, or alternatively, as acting without sufficient legal review.
● Association with decisions taken by the Foundation even if not made individually by the director, especially in decentralized and transparent governance environments.

As a result, directors must exercise not only legal prudence, but also sound communications and community engagement judgment.

Annual Compensation

Each appointed Director of the PCF will receive a fixed annual compensation of $35,000 USD, disbursed in equal monthly installments of $2,916.67 USD. This compensation reflects the seriousness and complexity of the role, which includes significant fiduciary obligations, governance oversight, and risk exposure under Cayman Islands law. Directors are expected to actively participate in the review, approval, and execution of on-chain governance decisions, and to assume personal legal responsibility for the decisions made in their capacity as fiduciaries of the Foundation. The compensation is intended to recognize both the time commitment and the personal liability risk undertaken by each Director in service of the broader Polkadot ecosystem.

Onboarding Legal Costs

To support the smooth and legally compliant onboarding of new Directors, the Foundation has allocated a one-time legal budget of $7,500 USD per Director. This budget will cover all required legal and administrative processes, including:

● Preparation and execution of formal appointment documents
● Review and signing of Director Services Agreements ("DSA")
● Completion of due diligence, KYC, and background checks
● Registration of the Director with the Cayman Islands Registrar of Companies

This allocation ensures that each new Director is appointed in accordance with the Foundation’s governing documents and applicable Cayman Islands laws, while safeguarding the Foundation’s legal integrity and compliance posture.

Term, Renewal, and Termination

Directors will be appointed for an initial one-year term, with the opportunity for renewal in accordance with the Foundation’s Articles of Association and subject to the ongoing needs and governance objectives of the PCF, and in alignment with community expectations.

A Director may resign at any time with thirty (30) days’ written notice. The Foundation may also terminate a Director’s appointment for cause in accordance with the Foundation's constitutional documents, including but not limited to:

● Failure to meet legal or fiduciary obligations
● Violation of the Director Services Agreement
● Inability or unwillingness to perform core duties
● Reputational risk or breach of Foundation policies

Under the Foundation’s Articles of Association and Bylaws, the DOT tokenholders have certain powers, exercisable by Tokenholder Vote (as defined in the Foundation’s Articles of Association), to remove directors, provided that the Foundation is not left without at least one director.
In the event of termination or resignation, compensation will be pro-rated to reflect time served. Any unspent onboarding legal allocation will be returned to the Foundation's treasury.

Appointment Procedure

The appointment process will consist of the following steps:

**Public Nominations **

1. Community Open Nomination Process

To uphold the principles of transparency, community inclusion, and decentralized governance that are foundational to the Polkadot ecosystem, the Polkadot Community Foundation (the "Foundation" or "PCF") will initiate a formal public nomination process to identify and shortlist candidates for appointment as Directors.

This process will begin with this on-chain referendum on Polkadot OpenGov, inviting broad participation from DOT holders and community members. The purpose of this on-chain referendum is to align the community around this process and maximize awareness to crowdsource nominations, foster open dialogue about expectations for the role, and ensure that the eventual appointees reflect the values, interests, and diversity of the Polkadot community.

During this period, the community will be invited to:

· Submit nominations for individuals believed to be qualified to serve as a Director of the PCF. Self-nominations are welcome and encouraged. Please use this Nomination Form. You can view all submitted nominations – here.
· Provide reasoned endorsements or statements of support for nominees, particularly those highlighting the nominee’s background in governance, legal or operational experience, contributions to the Polkadot ecosystem, and ability to act with independence and accountability.
· Ask questions or provide commentary on the nomination process, proposed qualifications, and expectations for Directors, in the interest of shared understanding and procedural integrity.

To be considered for shortlisting, nominees should ideally demonstrate:

· A clear alignment with the mission and governance philosophy of Polkadot, including support for decentralization, transparency, and public goods funding.
· A readiness to fulfill legal and fiduciary responsibilities, including undergoing full Know-Your-Customer ("KYC") procedures, signing a formal Director Services Agreement ("DSA"), and being formally registered under Cayman Islands Registrar of Companies.
· The ability to represent the broader interests of the community and provide oversight on behalf of the network.

At the conclusion of the nomination window, the Foundation will assess all valid submissions and community feedback to identify the top five (5) nominees. This assessment will be based on public support (e.g. endorsements or recognitions expressed in the thread) and the perceived suitability of each candidate to uphold the duties and legal responsibilities of a PCF Director.

These five individuals will then proceed to the next phase, which includes a community signaling referendum conducted on Polkadot OpenGov. Should any shortlisted nominee be unwilling or unavailable to serve as a Director of the PCF, including failure to complete KYC verification, execute the Director Services Agreement (DSA), or provide a full biography, the next most-supported nominee may be considered in their place.

This community-grounded process ensures that appointments to the PCF board are not only legally compliant and operationally sound, but also reflective of the will and trust of the DOT tokenholder base, preserving the legitimacy and long-term accountability of the Foundation in its service to the network.

2. On-Chain Referendum on OpenGov

Following the public nomination and shortlisting process, the PCF will initiate a series of on-chain referenda via Polkadot OpenGov to democratically determine the community’s preferred candidates for appointment as Directors.

This signaling process will take the form of five separate referenda, each submitted under the "Small Tipper" track with a nominal request of 1 DOT. All DOT received through this mechanism will be returned to the Treasury. Each referendum will present one of the five (5) shortlisted nominees from the public nomination phase, accompanied by:

· A verified biography
· A summary of their relevant experience
· A personal statement of intent
· Confirmation of their willingness to complete the legal onboarding requirements, including full KYC and execution of a Director Services Agreement.

The purpose of the referendum is to provide a clear, transparent signal from DOT holders regarding which individuals the community deems best suited to represent it’s interests on the Foundation's board. This approach preserves Polkadot’s principle of tokenholder-led governance while recognizing the need for legal compliance and fiduciary oversight in the off-chain execution of DAO outcomes.

The referendum will remain open for voting for a reasonable period, as defined by OpenGov parameters to allow for broad participation and deliberation.

At the conclusion of the referendum:

· The two (2) nominees receiving the highest level of support as measured by on-chain vote weight will be formally contacted by the Foundation and invited to begin the legal onboarding process.
· Should a top nominee be unwilling or unable to fulfill the necessary legal requirements (KYC, DSA, or public biography), or voluntarily withdraw from consideration, the next highest-ranked nominee will be approached in their place.

It is important to note that while this referendum is non-binding in legal terms, the Foundation is fully committed to honoring the outcome in good faith, barring any disqualifying legal issues or procedural barriers. This commitment ensures that the selection process remains grounded in community legitimacy, accountability, and decentralization, while also safeguarding the operational and legal integrity of the Foundation.

By combining open nominations with an on-chain referendum, the PCF aims to ensure that the appointment of Directors remains both legally sound and democratically legitimate, upholding the spirit and intent of Polkadot’s governance model.

3. Final Onboarding and Legal Appointment Process

Upon the conclusion of the on-chain signaling referendum, the two (2) nominees receiving the highest level of support as determined by the OpenGov voting process will be formally invited by the PCF to proceed with the final onboarding process required for directorship.

This onboarding phase ensures that all legal, regulatory, and governance obligations are fulfilled prior to the official appointment. Each nominee must complete the following steps in full, without exception:

Identity Verification (KYC)

Each nominee must undergo and complete a comprehensive Know-Your-Customer ("KYC") screening in accordance with the requirements of the PCF’s registered office provider in the Cayman Islands and applicable Cayman Islands law.

This includes:

· Submission of certified government-issued photo identification and certified English-language (or translated) proof of address
· Background checks as required under anti-money laundering ("AML") obligations
· Confirmation of tax residency and related disclosures, if applicable

This step ensures that all Directors are verified, legally compliant, and eligible to be registered under the Cayman Islands Registrar of Companies.

**Execution of Director Services Agreement **

Each nominee must execute a Director Services Agreement ("DSA"), which outlines the legal terms of their appointment, including:

· Fiduciary duties and obligations under Cayman Islands law
· Scope of responsibilities and authority as a Director of the PCF
· Compensation structure and term of appointment
· Confidentiality, conflict of interest, and indemnity provisions
· Termination clauses and standards of conduct

The DSA serves as the binding contractual agreement between the Director and the Foundation and ensures clarity and legal protection for all parties.

Submission of a Formal Biography

All incoming Directors must provide a comprehensive, publicly shareable biography, including:

· Relevant professional experience
· Prior involvement in governance, blockchain ecosystems, or public service
· Any affiliations that may be relevant to the role or require disclosure under conflict-of-interest guidelines

This biography will be made available to the community to promote transparency and trust, and to reinforce the principle of community oversight in Foundation governance.

Only upon successful completion of all three onboarding steps will the candidate be formally appointed as a Director of the PCF and the appointment will be filed with the Cayman Islands Registrar of Companies.

Should a nominee fail or refuse to complete any part of the onboarding process, such as declining KYC, refusing to sign the DSA, or not submitting the required biography they will be considered ineligible, and the PCF will extend an invitation to the next highest-ranked nominee as determined by the signaling referendum.

This final onboarding phase serves as the legal gateway to formal directorship and is essential to ensuring that appointees are both legally qualified and aligned with the standards of accountability, transparency, and fiduciary integrity expected of the Foundation’s leadership.

4. Contact and Community Engagement

The PCF encourages all members of the Polkadot ecosystem to actively participate in this important process. We welcome inquiries, nominations, constructive feedback, and expressions of interest from stakeholders across the network, including tokenholders, contributors, developers, parachain teams, governance delegates, and other ecosystem participants.

The PCF is committed to ensuring that this appointment process remains open, transparent, and aligned with the community-driven ethos that underpins Polkadot governance. We recognize that the effective execution of on-chain decisions in the real world depends not only on legal structures and fiduciary frameworks, but also on ongoing dialogue and mutual trust with the community we serve.

For any private correspondence, clarification requests, or to submit materials related to nominations, please contact the Foundation directly at info@polkadotcommunity.foundation

The Foundation team is available to answer questions about:

· The nomination and selection process
· Director responsibilities and legal requirements
· KYC, onboarding procedures, and DSA execution
· The signaling referendum timeline
· Any general inquiries regarding PCF’s role in governance and proposal execution

We look forward to working closely with the Polkadot community throughout this process to identify and on board two qualified, community-aligned Directors. These individuals will play a vital role in supporting the next phase of the Foundation’s mission—bridging decentralized, tokenholder-driven governance with real-world execution and accountability.

Together, we can strengthen the governance infrastructure of the network and ensure that Polkadot remains a leading example of legally sound, operationally effective, and community-driven decentralized coordination.

Compatibility with other Referenda

We are aware of at least one other referendum regarding PCF directors—number 1737, which can be viewed here: https://polkadot.polkassembly.io/referenda/1737

In accordance with the PCF’s Bylaws, if 1737 is approved then it will be treated as valid instructions from the community. If this referenda is subsequently approved, it will be interpreted as valid superseding instructions. For any redundant or conflicting instructions between the two referenda, the wording of this proposal shall be valid while the wording of 1737 shall be deprecated.

Such redundant or conflicting instructions include:

· Nomination process
· Candidate requirements
· Role responsibilities
· Removal process

This Referendum is posted by Autonomous Projects as administrators of the Polkadot Community Foundation.