<html><head><meta http-equiv="Content-Type" content="text/html charset=utf-8"></head><body style="word-wrap: break-word; -webkit-nbsp-mode: space; -webkit-line-break: after-white-space;" class=""><span style="font-family: 'Verdana'; font-size: 13px; color: rgb(102, 102, 102);">Thanks Jordan. I understand now.<div class=""><br class=""></div><div class="">Will investigate and respond in detail but yes, we believe the mechanism is indeed viable in a non-membership system.<br class=""><div apple-content-edited="true" class="">
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<p class="p2">Cheers,</p>
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<p class="p2">Chris</p>
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<br class=""><div><blockquote type="cite" class=""><div class="">On 14 Sep 2015, at 10:26 , Jordan Carter <<a href="mailto:jordan@internetnz.net.nz" class="">jordan@internetnz.net.nz</a>> wrote:</div><br class="Apple-interchange-newline"><div class=""><div dir="ltr" class="">Hi Bruce,<div class=""><br class="">Thanks to you and Chris for your replies. Just want to focus on the fiduciaries bit:</div><div class="gmail_extra"><br class=""><div class="gmail_quote">On 13 September 2015 at 16:02, Bruce Tonkin <span dir="ltr" class=""><<a href="mailto:Bruce.Tonkin@melbourneit.com.au" target="_blank" class="">Bruce.Tonkin@melbourneit.com.au</a>></span> wrote:<br class=""><blockquote class="gmail_quote" style="margin:0 0 0 .8ex;border-left:1px #ccc solid;padding-left:1ex">
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<div class=""><span class=""><p class="MsoNormal"><span style="color:#1f497d" class="">>> </span>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?<span style="color:#1f497d" class=""><u class=""></u><u class=""></u></span></p><p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:#1f497d" class=""><u class=""></u> <u class=""></u></span></p>
</span><p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:#1f497d" class="">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.<u class=""></u><u class=""></u></span></p><p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:#1f497d" class=""><u class=""></u> <br class=""></span></p></div></div></div></blockquote><div class=""><br class=""></div><div class="">My understanding of this issue is as follows. [I too, joyously, am not a lawyer...!]</div><div class=""><br class=""></div><div class="">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. </div><div class=""><br class=""></div><div class="">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.</div><div class=""><br class=""></div><div class="">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.</div><div class=""><br class=""></div><div class="">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.</div><div class=""><br class=""></div><div class="">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.</div><div class=""><br class=""></div><div class=""><br class=""></div><div class="">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.</div><div class=""><br class=""></div><div class=""><br class=""></div><div class="">I hope this is clear, but recognise it is a brief effort at clarity.... </div><div class=""><br class=""></div><div class=""><br class=""></div><div class="">cheers</div><div class="">Jordan</div><div class=""><br class=""></div><div class=""><br class=""></div><div class=""><br class=""></div><div class=""><br class=""></div></div><div class="gmail_signature"><div dir="ltr" class=""><div class=""><div dir="ltr" class=""><div dir="ltr" class=""><div dir="ltr" class=""><br class=""></div></div></div></div></div></div>
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