[CCWG-ACCT] Fiduciary duties and MEM / CMSM

Arun Sukumar arun.sukumar at nludelhi.ac.in
Mon Sep 14 05:51:10 UTC 2015


Hi Jordan,

Would this (important) concern be resolved if the arbitral tribunal
decisions are approved/rejected by a community mechanism? That would -- if
this is where the discussion is indeed headed -- obviate the need for
creating a SMCM-like legal entity. On the other hand, I don't know how the
community will be able to intervene at the stage between a tribunal's
decision and enforcing it in a court of law.

Just a thought..

Arun

On Mon, Sep 14, 2015 at 6:14 AM, Chris Disspain <ceo at auda.org.au> wrote:

> Thanks Jordan. I understand now.
>
> Will investigate and respond in detail but yes, we believe the mechanism
> is indeed viable in a non-membership system.
>
>
> Cheers,
>
>
> Chris
>
> On 14 Sep 2015, at 10:26 , Jordan Carter <jordan at internetnz.net.nz> wrote:
>
> 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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-- 
-
@arunmsukumar <http://www.twitter.com/arunmsukumar>
Senior Fellow, Centre for Communication Governance <http://www.ccgdelhi.org>
National Law University, New Delhi
Ph: +91-9871943272
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