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<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:#1F497D;mso-fareast-language:EN-US">Dear Kavouss<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:#1F497D;mso-fareast-language:EN-US"><o:p> </o:p></span></p>
<p class="MsoNormal"><span lang="EN-US" style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:#1F497D;mso-fareast-language:EN-US">Are you adressing me or my question?<o:p></o:p></span></p>
<p class="MsoNormal"><span lang="EN-US" style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:#1F497D;mso-fareast-language:EN-US"><o:p> </o:p></span></p>
<p class="MsoNormal"><span lang="EN-US" style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:#1F497D;mso-fareast-language:EN-US">Best<o:p></o:p></span></p>
<p class="MsoNormal"><span lang="EN-US" style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:#1F497D;mso-fareast-language:EN-US"><o:p> </o:p></span></p>
<p class="MsoNormal"><span lang="EN-US" style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:#1F497D;mso-fareast-language:EN-US">Jorge
<o:p></o:p></span></p>
<p class="MsoNormal"><span lang="EN-US" style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:#1F497D;mso-fareast-language:EN-US"><o:p> </o:p></span></p>
<p class="MsoNormal"><b><span lang="DE" style="font-size:11.0pt;font-family:"Calibri",sans-serif">Von:</span></b><span lang="DE" style="font-size:11.0pt;font-family:"Calibri",sans-serif"> Kavouss Arasteh [mailto:kavouss.arasteh@gmail.com]
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<b>Gesendet:</b> Freitag, 2. Oktober 2015 12:08<br>
<b>An:</b> Cancio Jorge BAKOM <Jorge.Cancio@bakom.admin.ch>; Seun Ojedeji <seun.ojedeji@gmail.com><br>
<b>Cc:</b> Mathieu Weill <Mathieu.Weill@afnic.fr>; accountability-cross-community@icann.org; Thomas Rickert <thomas@rickert.net><br>
<b>Betreff:</b> Re: [CCWG-ACCT] question on fiduciary duties and their objectivity<o:p></o:p></span></p>
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<p class="MsoNormal">Dear Seue<o:p></o:p></p>
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<p class="MsoNormal">Unfortunately, dispute Resolution was a general term used and does it in no way replace IRP.Pls read my eralier message in this regard<o:p></o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal">BR<o:p></o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal">Kavouss <o:p></o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal">2015-10-02 11:43 GMT+02:00 <<a href="mailto:Jorge.Cancio@bakom.admin.ch" target="_blank">Jorge.Cancio@bakom.admin.ch</a>>:<o:p></o:p></p>
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<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span lang="EN-US">Hi Mathieu,</span><o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span lang="EN-US"> </span><o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span lang="EN-US">After reviewing the legal memo you just sent and what it says about fiduciary duties, I feel that the question I’m presenting is not tackled in that Memo and
that we still would largely benefit right now from a better understanding of the question I was proposing.</span><o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span lang="EN-US"> </span><o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span lang="EN-US">I’ve tried to specify the question a bit more, and it would look as follows:</span><o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span lang="EN-US"> </span><o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span lang="EN-US">Is there any means under Californian Law that would allow to subject the exercise of fiduciary duties to objective and controllable standards? For example, could
the following or similar means be acceptable and usable under Californian law:</span><o:p></o:p></p>
<p style="margin-left:36.0pt"><span lang="EN-US" style="font-family:Symbol">·</span><span lang="EN-US" style="font-size:7.0pt">
</span><span lang="EN-US">concretizing these fiduciary duties in the Bylaws;</span><o:p></o:p></p>
<p style="margin-left:36.0pt"><span lang="EN-US" style="font-family:Symbol">·</span><span lang="EN-US" style="font-size:7.0pt">
</span><span lang="EN-US">subjecting their correct interpretation to arbitration;</span><o:p></o:p></p>
<p style="margin-left:36.0pt"><span lang="EN-US" style="font-family:Symbol">·</span><span lang="EN-US" style="font-size:7.0pt">
</span><span lang="EN-US">imposing special requirements on the rationale needed to be provided if they are used to override community decisions;</span><o:p></o:p></p>
<p style="margin-left:36.0pt"><span lang="EN-US" style="font-family:Symbol">·</span><span lang="EN-US" style="font-size:7.0pt">
</span><span lang="EN-US">imposing extra-supermajorities in the Board in order to being able to invoke such duties?</span><o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span lang="EN-US"> </span><o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span lang="EN-US">The underlying idea is IMHO very relevant to our present discussions on the Model, especially for those of us who are not experts in Californian Corporate Law:
i.e. is there a legal means to subject those fiduciary duties to specific and objective standards and/or third-party control? If there are, could we use those means (if they exist) to develop our model? If they do not exist, or are too limited, this might
speak for a membership structure.</span><o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span lang="EN-US"> </span><o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span lang="EN-US">Please let me know if you can proceed with this.</span><o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span lang="EN-US"> </span><o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto">Regards<o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"> <o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;margin-bottom:12.0pt">Jorge<o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span style="color:#1F497D"> </span><o:p></o:p></p>
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<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><b><span lang="DE">Von:</span></b><span lang="DE"> Mathieu Weill [mailto:<a href="mailto:mathieu.weill@afnic.fr" target="_blank">mathieu.weill@afnic.fr</a>]
<br>
<b>Gesendet:</b> Freitag, 2. Oktober 2015 11:06<br>
<b>An:</b> Cancio Jorge BAKOM <<a href="mailto:Jorge.Cancio@bakom.admin.ch" target="_blank">Jorge.Cancio@bakom.admin.ch</a>>;
<a href="mailto:accountability-cross-community@icann.org" target="_blank">accountability-cross-community@icann.org</a><br>
<b>Cc:</b> <a href="mailto:leonfelipe@sanchez.mx" target="_blank">leonfelipe@sanchez.mx</a>;
<a href="mailto:thomas@rickert.net" target="_blank">thomas@rickert.net</a><br>
<b>Betreff:</b> Re: question on fiduciary duties and their objectivity</span><o:p></o:p></p>
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<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span lang="EN-US"> </span><o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;margin-bottom:12.0pt"><span lang="EN-US">Dear Jorge,
<br>
<br>
You are rightly pointing out one of the key areas where a shared understanding of the concept and consequences has not been achieved so far. $<br>
<br>
Our 2nd report highlighted this issue for further investigation during WS2, but I note that some comments mentioned that this should not be clarified as part of WS1. The exact wording of our work item was :</span><o:p></o:p></p>
<blockquote style="margin-top:5.0pt;margin-bottom:5.0pt">
<p style="margin-left:72.0pt"><span lang="EN-US">o</span><span lang="EN-US" style="font-size:7.0pt">
</span><span lang="EN-US">Clarifying understanding of the fiduciary duties of Board Directors and related expectations concerning Director behavior for the Board.</span><o:p></o:p></p>
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<p class="MsoNormal" style="mso-margin-top-alt:auto;margin-bottom:12.0pt"><br>
Past work on the topic include several mentions in legal memos. Most notable is on page 4 of one of the initial memos from our Counsel dated 12 april (<a href="https://community.icann.org/download/attachments/52890082/Combined%20CCWG%20Cover%20Memo%20and%20Templates.pdf?version=3&modificationDate=1428797461000&api=v2" target="_blank">https://community.icann.org/download/attachments/52890082/Combined%20CCWG%20Cover%20Memo%20and%20Templates.pdf?version=3&modificationDate=1428797461000&api=v2</a>)
which addresses the balance between accountability and decision making authority.
<br>
<br>
If we were to pursue this at this stage, we probably should flesh out some questions to direct work from our Counsel. What would be the type of questions you would raise Jorge ? (or others) ?
<br>
<br>
Best<br>
Mathieu<br>
<o:p></o:p></p>
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<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto">Le 01/10/2015 10:41,
<a href="mailto:Jorge.Cancio@bakom.admin.ch" target="_blank">Jorge.Cancio@bakom.admin.ch</a> a écrit :<o:p></o:p></p>
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<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span lang="EN-US">Dear all,</span><o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span lang="EN-US"> </span><o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span lang="EN-US">During the debates we had on the last conference call I put forward a question which I feel could be important to better understand under Californian corporate
law.</span><o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span lang="EN-US"> </span><o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span lang="EN-US">This is whether there are any means to subject the exercise of “fiduciary duties” (by the Board) to objective standards.</span><o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span lang="EN-US"> </span><o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span lang="EN-US">As I have understood the discussion so far, the membership model allows the member to override “fiduciary duties” of the Board. However the member itself has
no fiduciary duties vis-à-vis the organization.</span><o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span lang="EN-US"> </span><o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span lang="EN-US">On the other hand, fiduciary duties are apparently a useful tool within corporate law, as it imposes a duty to care for the welfare of the whole of the organization.</span><o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span lang="EN-US"> </span><o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span lang="EN-US">The argument which is made by some, as far as I understand it, is that there is however a problem in the exercise of “fiduciary duties” as it would provide the
Board with an “arbitrary” power, e.g. to override community decisions (in exercise of community powers) without being bound to any objective standards.</span><o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span lang="EN-US"> </span><o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span lang="EN-US">Considering all this, my question (to the Lawyers, if this is certified as a question to them) would be: is there any means under Californian Law (or other US
jurisdictions…) that would allow to subject the exercise of fiduciary duties to objective standards? (e.g. be it through concretizing these duties in the Bylaws, subjecting them to arbitration, imposing special requirements on the rationale needed to be provided
if they are used to override community decisions, or, for instance, imposing extra-supermajorities in the Board in order to being able to invoke such duties?)
</span><o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span lang="EN-US"> </span><o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span lang="EN-US">Hope this helps,</span><o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span lang="EN-US"> </span><o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span lang="EN-US">Regards</span><o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span lang="EN-US"> </span><o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span lang="EN-US">Jorge
</span><o:p></o:p></p>
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<p class="MsoNormal" style="mso-margin-top-alt:auto;margin-bottom:12.0pt"><o:p> </o:p></p>
<pre>-- <o:p></o:p></pre>
<pre>*****************************<o:p></o:p></pre>
<pre>Mathieu WEILL<o:p></o:p></pre>
<pre>AFNIC - directeur général<o:p></o:p></pre>
<pre>Tél: <a href="tel:%2B33%201%2039%2030%2083%2006" target="_blank">+33 1 39 30 83 06</a><o:p></o:p></pre>
<pre><a href="mailto:mathieu.weill@afnic.fr" target="_blank">mathieu.weill@afnic.fr</a><o:p></o:p></pre>
<pre>Twitter : @mathieuweill<o:p></o:p></pre>
<pre>*****************************<o:p></o:p></pre>
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