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

Greg Shatan gregshatanipc at gmail.com
Tue Oct 6 03:48:23 UTC 2015


Bruce,

I would like to clarify a few things for purposes of this discussion about
a Board engaging independent counsel.  First  there is  a very significant
difference between individual directors engaging independent counsel and a
Board engaging independent counsel.  Typically, in the first instance, the
director is seeking counsel with some distance and independence from the
Board.  In the second instance, the Board as a body is seeking advice
independent of the corporation's counsel.   The question of whether
individual directors have retained independent counsel is not really
relevant to this discussion about the Board seeking independent legal
advice.

It's also important to note that legal advice arises in an attorney-client
relationship, which can be created by a lawyer giving legal advice as well
as by an intentional act of engaging counsel.  While there may be lawyers
on the ICANN Board, they are not acting in that capacity, they are acting
as directors.  As such, they should not be providing legal advice, and
their thoughts about legal matters should not be considered legal advice.
If  board members are trying to wear both hats, that creates confusion (at
best) because it is unclear when they are acting as directors and when they
are acting as lawyers in an attorney-client relationship.  Being a lawyer
who has sat on some non-profit boards, it's my understanding that the usual
advice is to be extra careful NOT to provide legal advice.  The situation
is also treacherous when directors consult with the lawyers their employer
retains in their "day job" context.  For instance, directors should not be
sharing confidential information about board matters outside the board
room.  This scenario also raises questions about who the "client" is and if
or when an attorney-client relationship arises.  At best, these situations
should be considered legal "kibitizing"* and not legal advice, and the
recipient of the kibitzing should not rely on it as legal advice.  In other
words, none of this is a substitute for actual legal advice from an
attorney engaged for that purpose.  At worst, these situations can cause
quite a bit of mess.

Greg
[CAVEAT:  This email (and all other emails I have sent or will send) do not
constitute legal advice, should not be relied on as such, and do not create
an attorney-client relationship.]

* Kibitzing: Giving casual (and sometimes unrequested) advice as a
bystander.

On Mon, Oct 5, 2015 at 2:27 PM, Bruce Tonkin <
Bruce.Tonkin at melbourneit.com.au> wrote:

> Hello Avri.
>
>
> >>  Maybe someone mentioned it and I missed it, but how many directors
> have retained counsel in our history.
>
> >>  More than 1 or 2?
>
> From my recollection that sounds about right.
>
> I will check with the General Counsel's office to see if they have some
> data.
>
> Regards,
> Bruce Tonkin
>
>
>
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