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I am not an ICANN Board Member. I am not a lawyer. I am not a California
law expert.<br><br>
But I "hope" that the answer is "it depends". I
would like to think that the risk of being sued and the potential
liabilities (and the chances of losing!) would be weighed against the
ICANN Mission, Core Values and its Articles of Incorporation which
includes the phrase "The Corporation shall operate for the benefit
of the Internet community as a whole".<br><br>
Alan<br><br>
At 10/01/2015 08:40 PM, Steve DelBianco wrote:<br><br>
<blockquote type=cite class=cite cite="">Thanks for the larger context
around that bylaws provision, Bruce. But if we are considering
whether the bylaws refer to ‘ICANN’ as the corporation or the
<u>community</u>, see ICANN’s own Management Operating Principles (2008
<a href="https://www.icann.org/en/system/files/files/acct-trans-frameworks-principles-10jan08-en.pdf">
link</a>, p. 5):<br><br>
<dl>
<dd>"The third and perhaps most critical point of tension is between
the accountability to the participating community to perform functions in
keeping with the expectations of the community and the corporate and
legal responsibilities of the Board to meet its fiduciary obligations.
The ultimate legal accountability of the organization lies with the
Board, not with the individuals and entities that make up the ICANN
community.” <br><br>
</dl><br>
So, when the Board is confronting a community consensus to take an action
that could put the corporation at risk of a lawsuit how do you bellieve
a board member is obliged to react?<br><br>
From: Robin Gross
<<a href="mailto:robin@ipjustice.org">robin@ipjustice.org</a>><br>
Date: Saturday, January 10, 2015 at 8:10 PM<br>
To: Bruce Tonkin
<<a href="mailto:Bruce.Tonkin@melbourneit.com.au">
Bruce.Tonkin@melbourneit.com.au</a>><br>
Cc:
"<a href="mailto:accountability-cross-community@icann.org">
accountability-cross-community@icann.org</a>"
<<a href="mailto:accountability-cross-community@icann.org">
accountability-cross-community@icann.org</a>><br>
Subject: Re: [CCWG-Accountability] Regarding role of Board
directors<br><br>
Thanks for the info, Bruce. It is worth pointing out that
regardless of how those bylaws are interpreted, under California law,
nonprofit board members owe a legal duty of loyalty to the corporation
and there isn't anything that this working group can do change California
corporations law and the legal duty of loyalty each board member owes to
the corporation (as a corporation, yes, not staff). This is where a
tension comes in for trying to do public governance via a private
corporation - the two concepts weren't "built" for the other,
so there are gaps and some issues as a result. I think this is an
issue our group should explore.<br><br>
Best,<br>
Robin<br><br>
<br>
On Jan 10, 2015, at 4:43 PM, Bruce Tonkin wrote:<br><br>
<dl>
<dd>Hello Steve,<br>
<dl>
<dl>
<dd>ICANN Bylaws Article 6 Section 7 defines the duty of directors to
ICANN the Corporation: <br><br>
<dd>Directors shall serve as individuals who have the duty to act in what
they reasonably believe are the best interests of ICANN and not as
representatives of the entity that selected them, their employers, or any
other organizations or constituencies.<br>
<br>
</dl>
</dl>
<dd>I have often heard you refer to that specific clause in the bylaws
over the past year.<br>
<dd>I think it is worth understanding it a little more. I
personally believe that the intent of putting this clause in the bylaws
is that several Board members are appointed to the Board from a specific
stakeholder group, and this makes it clear that Board members need to act
on behalf of all stakeholders not just the stakeholder group that
appointed them. So from my perspective it is a higher level
of accountability than simply being accountable to the group that
appointed them. We certainly make that clear as new directors
join the Board.<br>
<dd>The clause does not mean that somehow a Board director is now
accountable to the staff in the organization rather than the "ICANN
community".<br>
<dd>For those appointed to the Board by the nominating committee - I
think it is already clear to them that they represent stakeholders as a
whole, as they go through a rigorous interview process in front of the
whole nominating committee.<br>
<dd>In my experience as Board director, Boards in general operate on
behalf of their stakeholders - these stakeholders could be the general
public, shareholders, or members. Under its articles of
incorporation, ICANN is structured to act on behalf of the global
public interest - i.e. the general public. <br>
<dd>In addition to acting on behalf of stakeholders, a board is also
accountable to govern an organization in accordance with the
law. This to me is the "corporate" obligation that
you often refer. This includes ensuring that the organization
can meet its financial commitments, ensure the staff have a safe
workplace, ensure there are financial controls to stop fraud, ensure the
organization complies with any contracts it has entered into
etc. Directors of ICANN can be held personally liable under
law if they are negligent.<br>
<dd>After the ATRT1 review, a set of governance guidelines were
established to make this clearer:<br>
<dd>
<a href="https://www.icann.org/resources/pages/guidelines-2012-05-15-en">
https://www.icann.org/resources/pages/guidelines-2012-05-15-en</a><br>
<dd>From the section on the role of directors:<br>
<dd>"The fundamental responsibility of Directors (as defined below)
is to exercise their business judgment to act in what they reasonably
believe to be the best interests of ICANN and in the global public
interest, taking account of the interests of the Internet community as a
whole rather than any individual group or interest" <br>
<dd>"It is the duty of the Board to oversee management's performance
to ensure that ICANN operates in an effective, efficient and ethical
manner. The Board will also be responsible for overseeing the development
of ICANN's short, medium and long-term strategic plans, ensuring that
they will result in sustainable outcomes, and taking account of the
critical interdependencies of financial, human, natural, manufactured,
social and intellectual capitals."<br>
<dd>"Some of the Board's key responsibilities are to ensure that
ICANN's ethics are managed effectively, that ICANN as a whole (as well as
individual Board and staff members) operates pursuant to the highest
ethical standards, that ICANN complies with applicable laws, and that
ICANN considers adherence to best practices in all areas of
operation."<br>
<dd>The bylaws could certainly be enhanced to incorporate the notion in
the Governance Guidelines that Board directors are accountable to the
Internet community as a whole. <br>
<dd>Regards,<br>
<dd>Bruce Tonkin<br>
<dd>_______________________________________________<br>
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</dl><br><br>
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