[CCWG-ACCT] Fiduciary duties and MEM / CMSM

Jordan Carter jordan at internetnz.net.nz
Mon Sep 14 00:26:05 UTC 2015


Hi Bruce,

Thanks to you and Chris for your replies. Just want to focus on the
fiduciaries bit:

On 13 September 2015 at 16:02, Bruce Tonkin <Bruce.Tonkin at melbourneit.com.au
> wrote:

>
>
>
> >>  Relatedly - has the board analysed whether the model is viable
> without a membership approach given the obligations directors hold
> (fiduciary obligations) in a non-membership system?
>
>
>
> I don’t understand the question.    From my understanding Directors of a
> board have the same fiduciary obligations regardless of where it is
> membership or non-membership organization.    The arbitration model I think
> could apply to either type of organization as well.
>
>
>

My understanding of this issue is as follows. [I too, joyously, am not a
lawyer...!]

The fiduciary obligations of the Board to the organisation etc have been
well discussed. In particular, they create some issues in terms of ensuring
that accountability mechanisms without a member leave the Board as the
final decision-maker.

That is why for instance ICANN has long opposed binding arbitration -
having an external decision-maker who could bind the Board could be
incompatible with those obligations and place the Board in an impossible
position. Same with the various community powers that have been proposed -
in the current situation, they could erode the ability of those obligations.

In creating the Community Mechanism as Single Member, this problem was
resolved. The fiduciary duties directors face in a membership-based
organisation are subtly but significantly different. Because the
"membership body" is one with various rights, there are no conflicts
between its ability to make decisions and the Board operating with
integrity in response to them.

This difference is implicit in many of the Board's suggestions about how to
change the community powers etc in the feedback lodged at the end of last
week, and in how the MEM would operate.

It is not surprising it's important, because it goes to the heart of who
has final authority in the ICANN system - the Board, as it does today &
would under the Board's proposed alternative, or the community organised
through the CMSM, as it would under the CCWG's proposal.


To me this is a core difference in approach we should tease out carefully
and accurately. It is why on the call with the Board on 3 Sept, I tried to
be clear that the issue goes well beyond the ability to "enforce the powers
in Court". It is this shift in fiduciary responsibility that is an
important difference.


I hope this is clear, but recognise it is a brief effort at clarity....


cheers
Jordan
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