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<div>Well stated<br>
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Philip S. Corwin, Founding Principal
<div>Virtualaw LLC</div>
<div>1155 F Street, NW</div>
<div>Suite 1050</div>
<div>Washington, DC 20004</div>
<div>202-559-8597/Direct</div>
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<div>202-255-6172/Cell</div>
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<div>Twitter: @VLawDC</div>
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<div>"Luck is the residue of design" -- Branch Rickey</div>
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<div>Sent from my iPad</div>
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On Sep 13, 2015, at 8:27 PM, Jordan Carter <<a href="mailto:jordan@internetnz.net.nz">jordan@internetnz.net.nz</a>> wrote:<br>
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<div dir="ltr">Hi Bruce,
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Thanks to you and Chris for your replies. Just want to focus on the fiduciaries bit:</div>
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<div class="gmail_quote">On 13 September 2015 at 16:02, Bruce Tonkin <span dir="ltr">
<<a href="mailto:Bruce.Tonkin@melbourneit.com.au" target="_blank">Bruce.Tonkin@melbourneit.com.au</a>></span> wrote:<br>
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<p class="MsoNormal"><span style="color:#1f497d">>> </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"><u></u><u></u></span></p>
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<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:#1f497d">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></u><u></u></span></p>
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<div>My understanding of this issue is as follows. [I too, joyously, am not a lawyer...!]</div>
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<div>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>
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<div>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>
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<div>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>
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<div>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>
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<div>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>
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<div>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>
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<div>I hope this is clear, but recognise it is a brief effort at clarity.... </div>
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<div>cheers</div>
<div>Jordan</div>
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