I'm no expert but I have run several small guilds in the past.
Rank and Authority have always been a touchy subject.
I have found that responsibility and function are a much better way of defining a guild structure. I come from a military background myself and have recently retired.
If the guild functions can be broken down and agreed upon, it is simply the nomination or volunteering of members to fill the roles that remain.
Just a few ideas are:
Council - you have already identified a need for a council to appoint and control
Recruiting - members who are familiar with the guild and its members and have a good understanding of how the game functions would make excellent recruiters
Finance - members appointed to snapping up bargains and reselling for guild profit
Social - In game events with prizes and benefits
Resources - Storage and distrubution of guild accumulated items to eligible members
Raid/DP - Planning and Coordination of guild raid/dp events
ClassMasters - Considered the senior 'Class' member/advisor for each specific class within the guild
Finally, and most importantly, defining the roles and responsibilities for all of the agreed positions is essential. This will ensure that appointed members know exactly what is expeted of them and also what others should expect from them.
I hope this helps to get members thinking about better ways to strcture the guild.
Mortasha :0)