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<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial","sans-serif";color:black">I would add that state attorneys general are generally empowered to enforce against directors violations of the bylaws that breach their fiduciary duties or cause
the corporation to use its assets outside its charitable purposes. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial","sans-serif";color:black"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial","sans-serif";color:black">I would also add that if bylaws violate the corporate law or the corporation’s own Articles of Incorporation, the board’s duty is to follow the statute or the Articles,
not the bylaws.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial","sans-serif";color:black"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial","sans-serif";color:black">Rosemary<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial","sans-serif";color:black"><o:p> </o:p></span></p>
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<p class="MsoNormal"><b><span style="font-size:10.0pt;font-family:"Tahoma","sans-serif"">From:</span></b><span style="font-size:10.0pt;font-family:"Tahoma","sans-serif""> accountability-cross-community-bounces@icann.org [mailto:accountability-cross-community-bounces@icann.org]
<b>On Behalf Of </b>Holly Gregory<br>
<b>Sent:</b> Tuesday, June 23, 2015 4:19 AM<br>
<b>To:</b> Chris Disspain; Malcolm Hutty<br>
<b>Cc:</b> accountability-cross-community@icann.org<br>
<b>Subject:</b> Re: [CCWG-ACCT] Townhall meeting follow-up<o:p></o:p></span></p>
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<p class="MsoNormal"><o:p> </o:p></p>
<p class="08896adb-c2fb-4148-844c-9246cce7fcdc">Chris, that is an accurate clarification. <br>
<br>
<br>
<br>
Sent with Good (<a href="http://www.good.com">www.good.com</a>)<strong><o:p></o:p></strong></p>
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<p class="MsoNormal" style="margin-bottom:12.0pt"><b><span style="font-size:10.0pt;font-family:"Tahoma","sans-serif"">From:</span></b><span style="font-size:10.0pt;font-family:"Tahoma","sans-serif"">
<a href="mailto:accountability-cross-community-bounces@icann.org">accountability-cross-community-bounces@icann.org</a> on behalf of Chris Disspain<br>
<b>Sent:</b> Tuesday, June 23, 2015 06:14:45 AM<br>
<b>To:</b> Malcolm Hutty<br>
<b>Cc:</b> <a href="mailto:accountability-cross-community@icann.org">accountability-cross-community@icann.org</a><br>
<b>Subject:</b> Re: [CCWG-ACCT] Townhall meeting follow-up</span><o:p></o:p></p>
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<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Verdana","sans-serif";color:#666666">Malcolm,
<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Verdana","sans-serif";color:#666666"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Verdana","sans-serif";color:#666666">We have been told that the Board of an<br>
organisation with no members has a fiduciary duty to the company that<br>
takes precedence over the Bylaws: if the Board decides that it is in the<br>
best interests of the corporation to defy the bylaws, then defying them<br>
is their legal duty.<o:p></o:p></span></p>
</blockquote>
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<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Verdana","sans-serif";color:#666666"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Verdana","sans-serif";color:#666666">With respect I think that is too simplistic a statement to describe what is a more complicated situation. One of the 3 legs of fiduciary duty of charitable
corporation like ICANN is the duty of obedience. </span><span style="font-size:10.0pt;font-family:"Verdana","sans-serif";color:#222222;background:white">The duty of obedience is the duty to remain faithful to and pursue the goals of the organization. In practice,
the duty of obedience requires the decision maker to follow the governing documents of the organisation and laws applicable to the organisation. Bylaws are governing documents. </span><span style="font-size:10.0pt;font-family:"Verdana","sans-serif";color:#666666"><o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Verdana","sans-serif";color:#222222;background:white">It would be correct to say that where there are no members or designators there is a challenge in enforcing where the </span><span style="font-size:10.0pt;font-family:"Verdana","sans-serif";color:#222222">Board
does NOT follow but it is incorrect to say that the Board can legally ignore its by-laws.</span><span style="font-size:10.0pt;font-family:"Verdana","sans-serif";color:#666666"><o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Verdana","sans-serif";color:#666666"><o:p> </o:p></span></p>
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<p class="p1"><span style="font-size:10.0pt;font-family:"Verdana","sans-serif";color:#666666"><o:p> </o:p></span></p>
<p class="p2"><span style="color:#666666">Cheers,<o:p></o:p></span></p>
<p class="p3"><span style="color:#666666"><o:p> </o:p></span></p>
<p class="p2"><span style="color:#666666">Chris<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Verdana","sans-serif";color:#666666"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Verdana","sans-serif";color:#666666">On 23 Jun 2015, at 20:01 , Farzanh <<a href="mailto:farzaneh.badii@gmail.com">farzaneh.badii@gmail.com</a>> wrote:<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Verdana","sans-serif";color:#666666"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Verdana","sans-serif";color:#666666">Thanks Malcolm, I can't agree more ! I have been battling with serious existentialist questions since there has been a shift to a soft approach to accountability.
We certainly need to emphasize how the new model can give us effective and enforceable mechanisms! enforcement mechanisms can also be deterrent mechanism ! The farther we r from enforcement mechanisms the less deterred are the decision makers to make decisions
against the community wishes ! <br>
<br>
<br>
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Verdana","sans-serif";color:#666666">On Jun 22, 2015, at 6:43 PM, Malcolm Hutty <<a href="mailto:malcolm@linx.net">malcolm@linx.net</a>> wrote:<br>
<br>
<br>
<br>
<br>
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Verdana","sans-serif";color:#666666">On 22/06/2015 17:52, Seun Ojedeji wrote:<br>
- Enforceability solutions other than membership:<br>
Considering the complications relating to the various membership models<br>
that has been suggested, there is obvious need to consider what is<br>
achievable within the current structure and i think everything is<br>
achievable except enforceability. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Verdana","sans-serif";color:#666666"><br>
I completely agree with David McAuley's reply on this point.<br>
<br>
Unfortunately, if you achieve "everything except enforceability", you<br>
achieve nothing more than a clarification of your request. You do not<br>
achieve accountability, only a clear statement of what you would like<br>
ICANN to do. The decision rests elsewhere.<br>
<br>
<br>
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Verdana","sans-serif";color:#666666">So it seem to me that we will already have some enforceability without<br>
actually requiring membership since an organisation board is required to<br>
obey/comply with its bylaw. So if the bylaw says; before you can do xyz,<br>
it needs to go through abc process, why would the board not follow/obey<br>
those direction as defined in the bylaw?<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Verdana","sans-serif";color:#666666"><br>
There are many reasons why things go wrong in this world. But I do not<br>
want to suggest anything you may find fanciful or improbable or, worse,<br>
that could be interpreted as attacking our honourable current Board members.<br>
<br>
So for now, let's just say that the Board might believe they were<br>
following the bylaws even if they were not. It is possible to err.<br>
<br>
Beyond that though, is the problem Becky identified earlier: it seems<br>
you are mistaken when you say that an organisation's board is required<br>
to obey/comply with its bylaws. We have been told that the Board of an<br>
organisation with no members has a fiduciary duty to the company that<br>
takes precedence over the Bylaws: if the Board decides that it is in the<br>
best interests of the corporation to defy the bylaws, then defying them<br>
is their legal duty. Only by creating a membership (whether through<br>
Empowered SOs, UAs, Open Membership, or some other approach) can we<br>
raise up the bylaws to something the Board must honour in the way you<br>
assume they already must.<br>
<br>
Incidentally, I don't blame you at all for not realising this: I didn't<br>
either, and was quite surprised to be told it. But the legal advice<br>
being what it is, we must act accordingly.<br>
<br>
<br>
-- <br>
Malcolm Hutty | tel: +44 20 7645 3523<br>
Head of Public Affairs | Read the LINX Public Affairs blog<br>
London Internet Exchange | <a href="https://urldefense.proofpoint.com/v2/url?u=http-3A__publicaffairs.linx.net_&d=AwMFAg&c=Od00qP2XTg0tXf_H69-T2w&r=1-1w8mU_eFprE2Nn9QnYf01XIV88MOwkXwHYEbF2Y_8&m=FK7b8kVkEMK2_MPHl9hkBB7An6cxn_MT87wTkCBHb7A&s=HKkuAJD_EoWIurwvGKRqFN2KzTLHIgIiahmB-XGCSkE&e=">
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<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Verdana","sans-serif";color:#666666"><o:p> </o:p></span></p>
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<p class="08896adb-c2fb-4148-844c-9246cce7fcdc"> <o:p></o:p></p>
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