[CCWG-ACCT] Notes-Recordings-Transcript links for Legal Subteam Meeting #12 22 April

Alice Jansen alice.jansen at icann.org
Wed Apr 22 19:11:54 UTC 2015

Dear All,

The notes, recordings and transcripts for the Legal Subteam #12  - 22 April will be available here: https://community.icann.org/pages/viewpage.action?pageId=52897282


Legal Subteam - Call # 12 -  22 April 2015

This call is being recorded.

Chat sessions are being archived and follow the ICANN Expected Standards of Behavior:http://www.icann.org/en/news/in-focus/accountability/expected-standards

Legal Subteam Documents:

These high-level notes are designed to help you navigate through content of the call and do not substitute in any way the transcript.

Action: Legal advisors to produce a simple summary chart [Thursday Apr 23, 15:00 UTC]
Action: Leon, draft answers, consolidate discussion points submit to legal sub-group for proof reading and then circulate to CCWG
Action: Legal advisors to review old documents and provide summaries only of information that is not clearly identified in the table.

1. Welcome & roll call

Samantha Eisner and Alice Munyua are on the bridge.

2. Review of draft answers to lawyers questions

Draft memo of April 17, with questions and answers from the legal team

How imp is it for the mechanisms to be binding, rather than  the current arrangement?

When the lawyers see questions such as viability and assume legally enforceable, so clarification is valuable.
Question/comment: could we at some point define our objectives: Removal of singe board member(s)  Recall of whole board.  Change of bylaw.  Approval of or rejection of budget or strategy.  Or any other of the core objectives of the mission.
And present a table showing whether designator / member can execute these requirements.
What might be added to, for example to designators, to make those powers apply.

Lean summary chart, directed to non-lawyers, would be helpful.

Action: lawyers to produce a simple summary chart [Thursday Apr 23, 15:00 UTC]

What is meant by reconsideration under 2a? A process by which a decision of the board is turned back to them to re-think, without any requirement for them to take any specific action.  Number of times something can be sent back, or only once, is another consideration.  Concern with the potential of an endless loop of turning things back.

Comment: Reconsideration is part of a natural process, veto from beginning would be unusual, step by step with reconsideration not an alternative to veto.  Veto as the later action.

Some may seem reconsideration or turn to an independent arbitrator may be enough rather than veto.

Discussion of the style of legal advice:  Can the lawyers produce summary advice first, and longer memo on record:  from general to detail?

wrt Q4.  How will the membership model work for some communities --GAC and ccNSO have been mentioned.  Not comfortable with saying member model is preferred at this time given the outstanding questions.
Response: The member model seems to best fit our requirements
Response: The member model doesn't seem to provide the flexibility needed, may need to look at the other model and consider making precedent as ICANN continues to make new ground in organizational governance.
Response: question asked by counsel.  Answer as is, and add an additional para asking if the designator model can be put in the bylaws and give greater flexibility.

Some input in budget and strategy is sensible, but what is not satisfactory about what the community has now?  And what might be possible to bind the board.

Comment about how best to interact with the independent lawyers:  The notion of preference of the group can only be handled at the CCWG level, not sub-group.  But the sub-group can help guide the lawyers to clarity in their briefing documents. 4 models on the table:  member, designator, all SO/AC as a single member, status quo.  Receive information on the pros and cons on these options and hand this back to the CCWG for discussion.  Lawyer and legal sub-group should be in a position to inform the CCWG of options and ti highlight the tradeoffs that have to be made.

Single member model, SO and AC would join a single body of ICANN and act as member.

Whether members are multiple or single, they should be able to do the same things.  If more implementable from a community standpoint then can look at this.  And believe a single members is possible.  Will provide more precise analysis.

If single member model, can single SO/AC still exercise statutory rights such as examining documents, recalling individual directors?  Questions from the call can be provided.

If a single member model, would the members of the single member structure have to be legal persons?

Action Leon: Draft answers, consolidate discussion points submit to legal sub-group for proof reading and then circulate to CCWG

3. Discussion on Comparison Chart on Governance Models Including Chris Disspain's questions

1. Full Board Recall
2. Individual Director Recall
3. Approve Regular Amendments to the Articles or Bylaws
4. Approve Changes to "Golden" FUNDAMENTAL  Bylaws or Articles Provisions

These are achievable under both models, might be slightly easier under the member model.  Both would need work done on the orgs that select directors, as they recommended to be a legal person, and under member must be a legal person.  And Full Board Recall will require some combined mechanism to ensure the individual directors are recalled together by the sending orgs.

5. Approve Strategic Plan
6. Approve Budget

Member and designator are different .  Under corporate law, the members have powers to reserve powers to themselves in the bylaws, and these could be reserved.

With designator there is less clarity, they cannot reserve certain powers to themselves, cannot reserve these powers in a truly binding manner.
The designators do not have standing to bring a suit against the company for a violation of fiduciary duties, the members do have this.
If member model not acceptable, the could look to create contracts between the designate and the company, where the company agreed to defer certain decisions to the designators for their approval.  But, that contact cannot abdicate the board's fiduciary duties, can't go too far or the contract would not be enforceable.

Reconsideration and independent review panels.  Can look at mechanisms to strengthen this, but ultimately, decisions on budget and strategic plan will be reserved for the board, but the blocking powers are reserved for the members.

If want these two powers, robust and simple. Must use member model.  If want reconsideration rights that expire then can look at the designator model.  But working against the legal norm when introducing contracts. A problem with contractual relationships: if under a contract it forced the organization to something beyond their fiduciary duty, then the director would be personally liable for breach of their fiduciary duties.

Legal advisors note that they are pushing the designator model to the limits.  If want truly enforceable model for the last two powers, then should go with membership.

Comment: sufficient to have the first four in place.  For the last two rely on the goodwill, of the board, or they get removed.  The threat says listen to the community or we remove those not willing to listen to the community.

Some contract for the designators as the SO/AC to remove their members, but what about the NomCom?  Can the rest of the community remove the NomCom appointees?

NomCom organized as representatives of the SO/AC and constituencies.   Legal advisors need to look at how the NomCom is organized, but that more implementation issue that needs to be worked through (under both models).

Contact to allow the collective of designators to remove their director together.  Or some clause in the bylaws where on a vote of no confidence in the board, then they agree to act to remove their Directors.

The bylaws also need to be valid.  If the bylaws said the community must approve the budget, then that abdicates fiduciary responsibilities and so not valid.

5/6 powers would push contracts to the limit.  What would full board recall contract look like, and would that push things to the limit.
Contracts are valid.  A contract among the members, or a contract for Directors as a condition on being a director to submit a commitment to resign in the event of a vote of no confidence.

These contracts OK.  Less certain when writing contracts which are is essentially at odds with the requirements of the law.

If NomCom were as today, then would need a committee that was comprised of designators or and unincorporated association, and enter into the same arrangement with the SO/AC.  Suggesting redoing much of the bylaws, then the structure of the NomCom be revisited as well.

Easier to sort out issues of budget etc. on this side.  IRP: having the IRP act as a reviewer of board decisions after the fact also has fiduciary issues,

The NomCom is made of ICANN constituencies, and these constituencies would also be designators in their own right.  How does that work?

Legal advisors: Pre-service resignation commitment is likely the easiest way to implement full board recall.  And in a community vote, the voters needn't be the designators or members, but could be separately defined.

Action: Legal advisors will review old documents and provide summaries only of information that is not clearly identified in the table.

Pre-service resignation letter, can it refer to some specific action of the community which might give the means to remove some individual NomCom members.

A.  can draft the letter in more detail and trigger a particular director's letter would be triggered.  But picking off single NomCom directors might seem to be second guessing the NomCom and threaten the independence of the NomCom.

4. Review on WP2 document  (not addressed)
5. Discussion with lawyers  (not addressed)
Action Items

Action: Legal advisors to produce a simple summary chart [Thursday Apr 23, 15:00 UTC]
Action: Leon, draft answers, consolidate discussion points submit to legal sub-group for proof reading and then circulate to CCWG
Action: Legal advisors to review old documents and provide summaries only of information that is not clearly identified in the table.

Documents Presented

  *   Draft Answers to questions on 17-Apr .pdf<https://community.icann.org/download/attachments/52897282/Draft%20Answers%20to%20questions%20on%2017-Apr%20.pdf?version=1&modificationDate=1429722493199&api=v2>
  *   Legal Assessment_ Governance Chart (1).pdf<https://community.icann.org/download/attachments/52897282/Legal%20Assessment_%20%20Governance%20Chart%20%281%29.pdf?version=1&modificationDate=1429722509644&api=v2>
  *   Legal Assessment_ Governance Chart.pdf<https://community.icann.org/download/attachments/52897282/Legal%20Assessment_%20%20Governance%20Chart%20%281%29.pdf?version=1&modificationDate=1429722509644&api=v2>

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