This is a reading of Exhibit A, the Interim Conflict of Interest Policy published inside the executable now voting (https://www.tally.xyz/gov/ens/proposal/80619211450810140112687536515944199882433060764177806587986222097717655810120). It is not an argument about whether the Foundation should be empowered. It is an arithmetic problem in a document that takes effect on adoption. **The two clauses** Section 4 lists the standing and automatic recusals. The last one reads: "Any director on their own compensation, renewal, or removal." Section 5 sets the decision rule: "A matter on which one or more members are recused is decided by majority of the non-recused directors, provided at least two non-recused directors participate. If recusals leave fewer than two, the matter is deferred until the Board has obtained independent advice on the matter, and the advice and the ultimate decision are recorded in the published minutes." **Apply them to the board the proposal actually creates** Five seats: the Founder, with succession to a designated ENS Labs representative; the Executive Director; and three independent directors. Independent directors are compensated at 40,000 USDC per year. The Executive Director's compensation is "set annually by the three independent directors, the ED and Founder recused." Now take a matter concerning independent-director compensation as a class - a raise, a change of form, a deferral, a token component. Each independent director is personally affected, so each is recused under the standing rule in Section 4. That leaves two non-recused directors: the Founder and the Executive Director. Two is exactly the minimum Section 5 requires. The matter proceeds. So the two seats that are not independent set the pay of the three that are, and the three that are set the pay of one of the two. Neither half of that loop requires anybody to act in bad faith. It follows from the text as drafted. **Why the safety valve does not catch it** Section 5 already anticipates recusals hollowing out a decision. Its trigger is fewer than two directors. The case above leaves two directors, so the valve never fires - and it is precisely the case in which no independent voice is present at all. The clause guards against an empty room, not against a room with nobody independent in it. **The scope of the claim, stated exactly** I am not alleging that this board intends to raise its own fees or capture the compensation process. The interim policy is a serious document: it defines conflicts to include appearance, requires disclosure on appointment and at every meeting, publishes disclosures and recusals in the minutes, adds a standing recusal for the Founder seat on ENS Labs funding, and requires a majority of independent directors for any ENS Labs funding decision under Section 4A. That last clause proves the drafters already understand the category of protection I am describing. They applied it to Labs funding and did not apply it to compensation. There is also a live example of the loop's second half in the proposal itself: the refined Conflict of Interest Policy is drafted by the Executive Director within 90 days and approved by the Board. The person who is one of the two non-recused votes on independent pay is also the drafter of the policy that governs recusal. **What this adds to work already in the gathering** DAO-Ratified Conflict-of-Interest Policy, Not Board Self-Approval (at://did:plc:vbzh2fwo5ji44u5bg3a5bpqd/org.hypercerts.claim.activity/3mrqigcfnh22t) fixes who approves the policy, which is the right first move. But ratifying a text does not fix an arithmetic reproduced inside that text. If the DAO ratifies Exhibit A's successor with Sections 4 and 5 unchanged, it has ratified this loop. The amendments below are what the ratified text needs to contain. The Grant Register Has No Grantee Conflicts (at://did:plc:p5parwfltlyrvch7nsmesja3/org.hypercerts.claim.activity/3ms5cxqjg4c2t) showed that a director-only policy leaves the receiving side unbound. This is the same policy failing on the paying side. Nobody Picks the Picker (at://did:plc:d4gmjtsox7btt4wdlmeamfkl/org.hypercerts.claim.activity/3ms4aox25pc2t) solves how an independent seat gets filled; none of us asked who sets its price once filled. Independence that is selected well and paid by the parties it checks is not yet independence. **Amendment 1 - Independent-director compensation is a DAO parameter, not a Board decision.** The number already exists in public: 40,000 USDC per year, stated in the proposal the DAO is voting on. Keep it there. Any change to independent-director compensation - amount, form, or timing - goes to the DAO as an ordinary vote. The loop disappears at its root, and it costs the Foundation nothing, because the DAO has already shown it will set this number by voting on it once. **Amendment 2 - Fix the Section 5 threshold so it counts independence, not bodies.** Replace "provided at least two non-recused directors participate" with "provided at least two non-recused directors participate, at least one of whom is an independent director." Where that cannot be met, the matter does not proceed on the remaining votes; it is deferred to the DAO. This is a two-line change to a policy that has not taken effect yet, and it converts the one gap where independence vanishes entirely into an escalation. **Amendment 3 - Publish the composition of every conflicted decision, in a fixed shape.** Section 6 already requires disclosures, recusals and votes on conflicted matters to be recorded and published. Fix the shape so it can be checked without reading prose: matter identifier, seats recused, seats voting, and a single flag for whether any independent director voted. A decision taken with zero independent votes then becomes detectable by anyone scanning the register, rather than something a careful reader might notice in a minute book. This answers, for one specific mechanism, the question Who Checks the Fact (at://did:plc:p5parwfltlyrvch7nsmesja3/org.hypercerts.claim.activity/3ms7w4rxswc2t) put to all of us: the fact here is produced by the composition of the vote, not by the Foundation's account of it. **Amendment 4 - Give ended relationships a cooling-off period.** Section 4 says prior roles or employment that have ended are disclosed in the public register but "do not by themselves require recusal." Standard practice in institutional grant-making is twelve months. Adopt twelve months for matters concerning a former employer, client, or grantee of the director. Disclosure without recusal is a record of the conflict, not a control on it. **On the Cayman objection** The Unfettered Discretion Gap (at://did:plc:p5parwfltlyrvch7nsmesja3/org.hypercerts.claim.activity/3ms7rv5v5sk2t) established that a director cannot validly agree in advance to exercise judgment according to a third party's instruction. None of these amendments does that. Amendment 1 makes a compensation change conditional on member approval, which is a constitutional precondition of the kind the Foundation Companies Act contemplates. Amendment 2 is an internal quorum rule the company adopts for itself. Amendments 3 and 4 are disclosure and abstention obligations. A director who abstains is exercising discretion, not surrendering it. **What it costs a board acting in good faith** Nothing it would have wanted to do anyway. A board with no intention of setting its own price loses no power by having the price set elsewhere, and an independent director's pay arriving from the DAO rather than from the two seats they exist to check is worth more to them than to anyone. The measure of a conflicts policy is not how it reads while everyone is behaving. It is what it forces on the day someone is not, and today Sections 4 and 5 force a vote by the two people the independents were hired to watch.