[CCWG-ACCT] question on fiduciary duties and their objectivity

[Bruce Tonkin]

Thanks Greg.  That matches my understanding also.

My point is the board already had that right.  We are in effect getting some independent advice from the CCWG legal counsel through this process.

Sent from my iPhone

On 5 Oct 2015, at 9:02 PM, Greg Shatan <gregshatanipc at gmail.com<mailto:gregshatanipc at gmail.com>> wrote:

Bruce,

The reason that a Board would retain counsel independent of the corporation is rather more specific, and not really addressed by your response.  A Board (or a Board committee) would retain independent counsel to receive advice that is independent of the corporation and independent of the counsel retained by the corporation.  This is most typical when the Board (or a committee) is investigating activities or actions of the corporation (as distinct from actions of the Board), but it can and may be invoked any time the Board is concerned about getting advice that is independent of management and its retained counsel, including getting a "second opinion" on advice the Board is receiving from the corporation's counsel.

The corollary to this is that a Board is not required to take the advice of the corporation's counsel at "face value," but can retain its own counsel.

Greg

Greg

On Fri, Oct 2, 2015 at 9:50 PM, Bruce Tonkin <Bruce.Tonkin at melbourneit.com.au<mailto:Bruce.Tonkin at melbourneit.com.au>> wrote:
Hello Greg,


>>  The idea of independent counsel for board members is an interesting one.  It's not uncommon in the corporate governance world, as far as I understand.

My understanding is that Board directors already have that right.

Note that several of our Board members are lawyers (although not in California), and several Board members have access to their own legal counsel through their employment.

I don’t recall in the time I have been on the Board that a Board member has sought independent counsel (which would be paid for by ICANN)  - but I believe that it is available.

Certainly in this process I have spoken directly over lunch, morning tea etc with many of the lawyers involved – participants of the CCWG, members of the CCWG, legal counsel to the CCWG, lawyers on the Board, ICANN’s in-house lawyers, ICANN.s external counsel etc.   I listen to them all, and I read all the posts.

This is my current understanding of the fiduciary responsibility from the Articles of Association:

" In furtherance of the foregoing purposes, and in recognition of the fact that the Internet is an international network of networks, owned by no single nation, individual or organization, the Corporation shall, except as limited by Article 5 hereof, pursue the charitable and public purposes of lessening the burdens of government and promoting the global public interest in the operational stability of the Internet by

(i) coordinating the assignment of Internet technical parameters as needed to maintain universal connectivity on the Internet;

(ii) performing and overseeing functions related to the coordination of the Internet Protocol ("IP") address space;

(iii) performing and overseeing functions related to the coordination of the Internet domain name system ("DNS"), including the development of policies for determining the circumstances under which new top-level domains are added to the DNS root system; (iv) overseeing operation of the authoritative Internet DNS root server system; and

(v) engaging in any other related lawful activity in furtherance of items (i) through (iv).

The Corporation shall operate for the benefit of the Internet community as a whole, carrying out its activities in conformity with relevant principles of international law and applicable international conventions and local law and, to the extent appropriate and consistent with these Articles and its Bylaws, through open and transparent processes that enable competition and open entry in Internet-related markets. To this effect, the Corporation shall cooperate as appropriate with relevant international organizations."


In short hand:  the Board's fiduciary responsibility  is towards the Internet community as a whole, and must promote the global public interest in the operational stability of the Internet.

Most of us on the Board don’t actually need lawyers to tell us how to exercise that responsibility.

I can see that the Board may at times be in conflict with any one SO or AC with respect to that responsibility, but if there is a consensus of SOs and ACs has a view about an action the Board is  taking with respect to the operational stability of the Internet - then I can't imagine a situation where the Board would do something differently.


Regards,
Bruce Tonkin





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