[CCWG-ACCT] Decision making versus comply with the law

[Bruce Tonkin]

Hello Anne,


>>  Bruce, these are good points as far as they go, but the 5 enumerated community powers are not about the policy-making process.  That process is separate and distinct from the community powers under disccussio.   In addition, what would be binding in arbitration, as I understand it, would be whether the Board violated the Articles , ByLaws, or its fiduciary duties when making the decision .  

No the binding arbitration is whether the Board operated consistently with the bylaws and articles of association.   The arbitration is not about the Board's fiduciary responsibilities.

The recent legal me from Jones Day confirmed this:

" The question to be determined in the proposed binding arbitration is whether the Board's decision or action violated ICANN's Bylaws or Articles of Incorporation.   Each of the decisions of the Board can be referred to arbitration pursuant to the terms of new Bylaws that ICANN might enact to implement the transition proposals. The fact that each decision of the Board was made consistent with and thus involves "core fiduciary duties" does not make those decisions any less arbitrable."




>>  What we know from experience is that the Directors have a fidciary duty to the corporation itself.  As I understand the legal advice, whether that duty was breached is the narrow inquiry in the scope of binding arbitration in the Sole Designator Model. 

I think the arbitration process is quite separate to whether the legal entity initiating the arbitration is also  recognized as a "member" or "designator".   As I understand it, the CCWG is proposing forming a legal entity that is able to initiate a "community" IRP, and that legal entity can enforce the decision of the arbitration in court.  

It seems to me that you want to make the legal entity that operates on behalf of the community to be able to make a final decision on whether to separate in an IANA separation situation.     I suggest we don't confuse that with trying to also describe the legal entity as a designator or member. 

 Note that the IANA functions could either be split out as a whole to another entity, spilt into multiple parts to different organizations, or perhaps just one part is split off.   There are quite a few permutations.  There are also agreements involved with the regional internet registries for numbering functions, agreements with ISOC/IETF for protocol parameters, and potential some agreement with respect to naming functions.   In those agreements IETF and numbering community will actually have the decision making power with respect to moving the relevant functions to another body.

With respect to the CWG proposal it proposed:

- forming a Separation Cross Community Working Group (SCWG).

- this working group would make a recommendation ranging from "no action required" to the initiation of an RFP and the recommendation for a new IFO, or the divestiture or reorganization of PTI.

- A determination by the ICANN Board to not approve a recommendation by the SCWG that had been supported by a supermajority of the ccNSO and GNSO Councils will need to follow the same supermajority thresholds and consultation procedures as ICANN Board rejection (by a supermajority vote) of a PDP recommendation that is supported by a supermajority of the GNSO.

I had assumed we are not trying to change the process recommended by the CWG on IANA transition.


If you did want to change this process, then one option could be that ICANN has a contract with the community legal entity that gives that legal entity the authority to make certain decisions.   That contract could separately define an arbitration process for that contract in the same way that there is a n arbitration process in the gTLD registry agreements.    This arbitration would be separate from the arbitration process for ICANN's bylaws.



>>  It seems to me that removing the entire Board is very unlikely. It would be extremely disruptive. So, for example, in relation to PTI separation, the Board would have to decide, in the exercise of its fiduciary duty, whether PTI separation would be the best thing for the corporation.  In fact it would be bound to do so.  That is not likely the same inquiry or analysis the Community would be making.  It would be asking a different question, e g is it better for the global public interest if PTI is separated?

Actually the Board would be doing the same analysis in the exercise of its fiduciary duty.

The Board's duty here is clear in the bylaws, it is to  ensure the stable and secure operation of the Internet's domain name system.

If the community felt that the IANA staff were not performing the simple administrative tasks of the IANA function properly - then the Board has a duty to fix this.   If it can't fix the problem, then the Board is actually duty bound to get the function done properly elsewhere.   I can't imagine a situation where the Board and the community would not be completely aligned in fixing the problem.   In fact the community has appointed Board members that are capable of managing such a situation..

Typically in such situations, the Board will ask the CEO to rectify the problem in its core mission.   If the CEO can't to that the Board should remove the CEO.   If the Board can't get an appropriate CEO and fix the problem, then it is perfectly normal to replace the Board with a group of people that can.

You state that removing the Board is "very unlikely"   However this event seems even more unlikely to me.   If the Board can't manage a simple administrative  function like IANA, then it should definitely be removed.    

A far more likely event is that customers raise some issues, and as the issues don't seem to be addressed the community would raise this via letters and our public forums, and the CEO would address the issues.

>>  This question could create a conflict for the Board in the exercise of its duties.

No there is no conflict.   The fundamental duty of the Board is to maintain the secure and stable operation of the DNS.

Regards,
Bruce Tonkin

(not a lawyer)