[Acct-Legal] [CCWG-ACCT] FW: Fwd: XPLANE update - please review

Fri May 8 21:02:27 UTC 2015

Sam,

I think that the points and questions in your email are, by and large, good
ones.  I have two concerns with your numbered issues, the first of which
starts in question 1 but runs throughout.  You talk about a "SO/AC
*becoming* an unincorporated association." I think that is not quite
accurate (although this issue has only recently been clarified, and may
still be in flux).  I think it is more accurate to talk about a "SO/AC
*creating* an unincorporated association."  This is a critical distinction
for the following reasons: (1) creating an unincorporated association (UA)
does not require a change in the form or existence of the SO/AC as created
by the ICANN Bylaws; (2) since the SO/AC will continue to exist, it can act
as it currently does within ICANN processes (e.g., the PDP) without any
significant change to the Bylaws or workings of ICANN; and (3) creating a
UA allows the SO/AC flexibility to decide which "members" of the SO/AC
become "members" of the UA -- it could be as few as two (e.g., the Chair
and Vice Chair) or as many as all members, and this in turn eliminates the
"some of our members won't join a UA [in the US/outside my jurisdiction]"
concern.

The second concern I have is about your statement "We have not highlighted
that members are not expected to consider ICANN’s fiduciary interests, but
to act in their own individual interests."  I'm not sure what you are
relying on to make that statement.  Generically, it may be technically true
that members of a non-profit do not have a fiduciary duty to the
non-profit.  Generically, I don't think it's accurate to say or imply that
members are *expected* "to act in their own individual interests."  I also
think it goes too far to say that members are not expected to "consider"
ICANN's fiduciary interests.  This makes it appear that the base state of a
member of a non-profit is to be greedy and self-centered, with no
consideration of the interests of the corporation, and by extension the
interests of other members and those who rely on the corporation's
activities.  Even if this is true generically, it ignores the essence of
the multistakeholder model, which doesn't work if stakeholders act solely
for their own interests and not for the interests of the whole.  This is
another important reason to make a distinction between "becoming" UAs that
are ICANN members and "creating" UAs that are members of ICANN.  As noted
above, if the SO/ACs merely create UAs, the SO/ACs continue to exist and
act as they currently do as "multistakeholders" under the ICANN Bylaws,
except when specific powers are exercised through the UAs as "members."
 Thus, the concern that the SO/ACs will turn into "members," and thus
starting acting solely in their self-interest is unfounded.  Hopefully,
that's not the intended message -- but I can't help reading it that way
until there's clarification.

Greg

On Fri, May 8, 2015 at 1:04 PM, Samantha Eisner <Samantha.Eisner at icann.org>
wrote:

>  Hi -
>
>  Catching up from some of the emails from the past weekend, I think that
> the proposed comments raised here by the external counsel and conversation
> by Greg (below) highlights an issue that the CCWG could raise to the
> forefront during the public comment period to help identify areas of
> community response.  I apologize if I’m rehashing a discussion that we’ve
> already engaged in, but I don’t recall us really going into much detail on
> this topic.
>
>  There seem to be some areas of disconnect between the proposal that
> we’ve put out for comment and the advice that we’ve received from external
> counsel, particularly around the scope of what groups will become members,
> what happens if some groups become members and some don’t, etc.  We have
> not provided the community much information about the variations, and
> wonder if we shouldn’t do that now.
>
>  The first advice we saw from counsel included discussion that the
> members would be those groups that appoint voting directors to the ICANN
> Board (GNSO, ccNSO, ASO, At-Large Community).  As discussed in the emails
> forwarded below, there is also the potential for a “seven member model”
> (all existing SOs and ACs) become members – so membership status regardless
> of the ability to appoint to the Board.  Much of the CCWG work seems to
> embrace this “seven member model” mechanism.  One of the themes of
> discussions that we’ve heard is that there may be some difficulty in
> certain groups becoming members. As seen from some of the attorney
> comments, if a community mechanism is developed that includes those who are
> not members, then there are limitations on how far that community mechanism
> can go without reliance upon the members to give effect to their decisions
> (which suggests an additional layer of accountability may be needed).
> However, one of the things that our proposal is not very good at to date is
> identifying some questions around these variations, which might help
> provide us some information on to proceed further in reaching a consensus
> recommendation, as well as provide us additional information through which
> we can make our stress testing more meaningful and robust across a set of
> variables.
>
>  Some issues that may be helpful to flag for the community during the
> public comment period and therefore put out for comment sooner rather than
> later include:
>
>    1. For those currently working within the SO/AC structure, do you see
>    any concerns or challenges to your SO/AC becoming an unincorporated
>    association?  What do you need to understand in order to evaluate that?
>    What do you need to understand prior to agreeing to become a “member” of
>    ICANN.
>    2. Does the community mechanism as envisioned include the correct
>    inputs into these decisions?  Are there participants outside of the
>    existing SO/AC structures that should be included here from the outset?
>    Given ICANN's mission, and relationship with respective operational
>    communities and all stakeholders globally, how does one ensure that those
>    not part of an SO/AC yet potentially impacted by an action, have a voice or
>    opportunity to be aware of a decision, and heard?
>    3. How should future SO/AC structures that could be created fit into
>    the membership model?  For example, if we go to the “seven member model”,
>    does this mean that if a new AC is formed in the future, that AC should
>    then be entitled to membership?  Does this create incentive for groups
>    wishing to have more impact on the ICANN multistakeholder model to form an
>    AC?  What considerations do we need to build in today to assess how many
>    “seats at the table” the new AC would have within the community mechanism?
>    4. If there are ACs/SOs that are not able to become members
>    (regardless of reason), we need to identify the areas where the community
>    mechanisms would rely upon the formal members in order to exercise the
>    community’s will, so there is an understanding of what other levels of
>    accountability may follow.
>    5. Whether or not all ACs/SOs become members, we have not highlighted
>    what it means to become a member – that members might not just have the
>    community empowerment rights that we are designing, but might each retain
>    individual rights as well, rights that they will hold without impairment by
>    other members or parts of the community.  We have not highlighted that
>    members are not expected to consider ICANN’s fiduciary interests, but to
>    act in their own individual interests.  In my opinion, this will help
>    provide information for community inputs on the proposed mechanism.
>
>
>  Thanks for your consideration.
>
>  Sam
>
>   From: "ccwg-accountability5 at icann.org" <ccwg-accountability5 at icann.org>
> Reply-To: "ccwg-accountability5 at icann.org" <ccwg-accountability5 at icann.org
> >
> Date: Saturday, May 2, 2015 at 11:38 PM
> To: "ccwg-accountability5 at icann.org" <ccwg-accountability5 at icann.org>
> Subject: Re: [Acct-Legal] Fwd: XPLANE update - please review
>
>   Greg and CCWG Legal Sub-team,
>
>
>
> Thanks for the note Greg, and we agree with your analysis, but also think
> the issue can be simplified for discussion and resolved in principle
> without significant amendment to the draft Report that will go out for
> public comment.  In addition, for this analysis we can leave the Nominating
> Committee to the side, as their role is limited to selecting (and removing)
> Directors, and do not otherwise exercise any of the community powers.
>
>
>
> From our prior discussions with CCWG, we have assumed that for various
> reasons the GAC (and perhaps other SOs and ACs) did not want to form
> unincorporated associations, which as we’ve stated precludes them from
> becoming “Members” of ICANN (Members must be legal persons).  Nonetheless,
> we understood that the CCWG still wanted the GAC and others to have an
> influential role, and believed that the community group mechanism
> articulated in 2.6.1.1 and 2.6.1.2 was designed to give effect to this
> goal, but without making those ACs Members.
>
>
>
> Basically, the issue turns on whether three ACs – the GAC, the SSAC, and
> the RSSAC – should become Members (which entails becoming unincorporated
> associations) or should function as part of the community group but not as
> ICANN Members.  Either approach is legally viable and enforceable.
>
>
>
> In summary:
>
> 1.       We have confirmed that ICANN can have classes of Members that do
> not have the right to select Directors (conversely, no right to remove
> their individual director either).  This applies to the GAC, RSSAC and SSAC.
>
> 2.       If desired, ICANN could have 7 Member Entities – GNSO, CCNSO,
> ASO, GAC, At-Large AC, SSAC, and RSSAC.
>
> o   All 7 Members would share the right to exercise the Community Powers
> over (a) Budget, (b) Strategic Plan, (c) changes to Fundamental Bylaws, (d)
> changes to bylaws, and (e) recalling the full Board.  These decisions would
> be coordinated through the community group, with Members exercising their
> influence as articulated in Section 2.6.1.2 of the Report (with the
> weighted votes).
>
> o   Four members – GNSO, CCNSO, ASO, and At-large AC – have the right to
> select Directors and recall their selected Directors.
>
> 3.       Nos. 1 and 2 above assumes that *all* the AC’s are willing to
> become unincorporated associations, including the GAC.
>
> 4.       If the assumption stated in No. 3 is not true for one or more of
> the seven GACs, then we can still have those Community Powers exercised
> through the 29 vote community group as proposed by CCWG in this report.
> However, there will need to be an additional step for implementation
> purposes, which will put the decision of the community group to the voting
> Members.  This may necessitate a contract between the Members and the
> community group, which would require the community group to create an
> unincorporated association, or we may be able to achieve it through
> covenants in the bylaws.  To counsel, this is a second-tier implementation
> detail, and we have allowed for this in our comments to the draft Report *(another
> copy of which is attached here for convenience)*.    If the public
> decides it’s too much to have Members and it would be better to give up
> full approval/veto rights over the budget and plan, and IANA Function
> review and recommendations, then this issue becomes moot (we could achieve
> the remaining community powers with Designators).
>
>
>
> Happy to discuss further on Sunday if a call is necessary.
>
>
>
> Cheers,
>
> Josh
>
>
>
> *JOSHUA* *HOFHEIMER*
>
> Sidley Austin LLP
> +1.213.896.6061 (LA direct)
> +1.650.565.7561 (PA direct)
> +1.323.708.2405 (cell)
> jhofheimer at sidley.com
> www.sidley.com
>
> [image: http://www.sidley.com/files/upload/signatures/SA-autosig.png]
> <http://www.sidley.com/> *SIDLEY AUSTIN LLP*
>
>
>
>
>
> *From:*ccwg-accountability5-bounces at icann.org [
> mailto:ccwg-accountability5-bounces at icann.org
> <ccwg-accountability5-bounces at icann.org>] *On Behalf Of *List for the
> work of CCWG-Accountability Legal SubTeam
> *Sent:* Saturday, May 02, 2015 10:01 PM
> *To:* ccwg-accountability5 at icann.org
> *Subject:* [Acct-Legal] Fwd: XPLANE update - please review
>
>
>
> Copying this to the rest of the Legal Sub Team.
>
>
>
> Greg
>
> ---------- Forwarded message ----------
> From: *Greg Shatan* <gregshatanipc at gmail.com>
> Date: Sun, May 3, 2015 at 12:25 AM
> Subject: Re: XPLANE update - please review
> To: "Gregory, Holly" <holly.gregory at sidley.com>
> Cc: "Rosemary E. Fei" <rfei at adlercolvin.com>, Adam Peake <
> adam.peake at icann.org>, "Hofheimer, Joshua T." <jhofheimer at sidley.com>,
> Leon Sanchez <leonfelipe at sanchez.mx>, Sidley ICANN CCWG <
> sidleyicannccwg at sidley.com>, ICANN-Adler <ICANN at adlercolvin.com>
>
>   I think there is some confusion -- or at least, disconnection -- across
> the board here.  The XPLANE slides really need to align with the draft
> proposal.  I have not yet tried to do that -- I've been out today and need
> to pack and get ready for an early flight tomorrow.  I should be able to
> look at this more carefully on the flight (NY - San Diego, so I'll have
> some time....).  I'm not sure how to align this with everyone else's
> schedule and our publication schedule.
>
>
>
> I think confusion centers on the different current and proposed community
> groupings -- their composition and what their powers, and how they relate
> to each other.
>
>
>
> There are 3 groupings at play:
>
>
>
> 1.  The "Current Selectors": the 5 organizations that currently choose
> Board Members.
>
> 2.  The proposed Members or Designators.
>
> 3.  The "Empowered Community" (shown on each XPlane slide).
>
>
>
> The problem is that we have not figured out the connection between these 3
> groupings, because the composition of these 3 groupings is inconsistent.
>
>
>
> The "Current Selectors" are:
>
>
>
> GNSO: 2 board seats
>
> ccNSO: 2 board seats
>
> ASO: 2 board seats
>
> ALAC: 1 board seat
>
> NomCom: 8 board seats*
>
> GAC, RSSAC, SSAC: 0 Board seats (each has one non-voting liaison)
>
> ----
>
> *NomCom composition: GNSO (7), ALAC (5), ccNSO (1), ASO (1), IAB (for
> IETF) (1), GAC, RSSAC, SSAC (each 1 non-voting liaison)
>
>
>
>
>
> If we follow directly from the "Current Selectors" the "Members" or
> "Designators" of ICANN would be the GNSO, the ccNSO, the ASO, ALAC. and the
> NomCom. The GAC, RSSAC and SSAC would not be Members or Designators
> (whether directly or through voting membership on the NomCom), because they
> have no voting role in choosing Directors.
>
>
>
> This does not align with our ongoing discussion of who the Members or
> Designators would be.  Instead, we have discussed having Members or
> Designators that align with all 8 of these groups (although only 5 can
> choose Directors).
>
>
>
> This in turn does not align with the "Empowered Community" that we seem to
> think should control the 5 community powers.  That would be the 7 groups
> shown on the Xplane slides, which excludes the NomCom, and gives seats (or
> at least "weights") to these 7 groups in a manner that does not relate to
> their power to appoint Directors.  Specifically, the GNSO, ccNSO, ASO, ALAC
> and GAC are given equal weight, the RSSAC and SSAC are given lesser weight,
> and the NomCom is disregarded.
>
>
>
> We have not contemplated the linkage between "Current Selectors"; the
> organizations with the *right to appoint board members* (GNSO/ccNSO/ASO/ALAC/NomCom)
> and the *Empowered Community* (GNSO/ccNSO/ASO/ALAC/GAC/RSSAC/SSAC).  If
> the Current Selectors are the Members/Designators, how does the Empowered
> Community have the rights we want to give it?  If the Empowered Community
> are the Members/Designators, how do we deal with the fact that 3
> Members/Designators have no right to appoint Directors, while the group
> that can appoint 8 Directors (i.e., the NomCom) is not a Member or
> Designator?  Would this be dealt with by an agreement among the 7 (or maybe
> 8) organizations (or more precisely, UAs aligned with these organizations)?
>
>
>
> This needs to be figured out, and quickly....
>
>
>
> Aside from this, there are more specific problems with the slides.  Slide
> 4 is particularly troublesome -- the right to remove individual directors
> should not be a right of the "Empowered Community." Instead it is a right
> that belongs to the GNSO, ccNSO, ASO and ALAC (but only as to each
> organization's own appointments), plus the unsolved case of the NomCom.
> The "Who Can Initiate A Petition" and "Things Required to Initiate"
> sections seems particularly off-target.
>
>
>
> Some of the slides have decision thresholds to "approve," while others
> have thresholds to "reject," making them confusing -- this is particularly
> true of the Bylaw and Fundamental Bylaw slides.  These rights appear to
> work in opposite ways -- Bylaws will be changed unless 75% vote to reject,
> while Fundamental Bylaws will not be changed unless 83% vote to accept.
> Maybe this is what we intended, but it looks odd when expressed this way.
>
>
>
> On Slide 1, the title refers to "Strategy Operating Plans" -- obviously
> there is no such thing.  ICANN has a Strategic Plan updated every 5 years,
> a 5 Year Operating Plan updated annually, and an annual Operating Plan and
> Budget derived from the 5 Year Operating Plan.  These should be referred to
> accurately.
>
>
>
> Greg
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
> On Sat, May 2, 2015 at 9:10 PM, Gregory, Holly <holly.gregory at sidley.com>
> wrote:
>
> Hi Adam, perhaps we should plan on a quick call for the Legal Subteam to
> clarify to us what the intent is. We found the draft proposal and the
> slides somewhat confused in the earlier draft and tried to clarify but
> apparently without success.
>
>
>
> Sent with Good (www.good.com
> <https://urldefense.proofpoint.com/v2/url?u=http-3A__www.good.com&d=AwMFaQ&c=Od00qP2XTg0tXf_H69-T2w&r=PyftdYkqjEDMIx5o_kyQ1bCTTkOV655ea67oiCGUI9M&m=CY6emrtO8YpL6GG9tlEQXWKZPzHhsu5uPNwcHDbVb4s&s=ojBeRqT8de6WaHMScv7SsYv8dLO79QtzxPBzAGFtdb0&e=>
> )
>
>
>  ------------------------------
>
> *From:* Rosemary E. Fei
> *Sent:* Saturday, May 02, 2015 06:33:03 PM
> *To:* 'Adam Peake'; Gregory, Holly; Hofheimer, Joshua T.
> *Cc:* Leon Sanchez; Greg Shatan; Sidley ICANN CCWG; ICANN-Adler
> *Subject:* RE: XPLANE update - please review
>
> Dear Adam, we will review.
>
> However, I'm not available for the next several hours, and I believe most
> if not all legal counsel team members are similarly engaged at this point
> in the weekend, so I'm not sure how quickly this review can be accomplished.
>
> More importantly, I'm unclear what the current member reference model is,
> since we thought it involved the two groups (a broader community, including
> both member and non-member groups, and a smaller membership group)
> described in our prior edits  I'm not sure how to review the slides based
> on a model I'm not familiar with.  Perhaps there's just a misunderstanding
> about what the two groups can do, and how the broader community/larger
> group can influence decisions, as opposed to the rights of the smaller
> member group.  We sent our revisions to the CCWG Draft Proposal a little
> while ago which attempted to clarify this, so we hope the concerns will be
> resolved by that.
>
> Rosemary
>
> -----Original Message-----
> From: Adam Peake [mailto:adam.peake at icann.org <adam.peake at icann.org>]
> Sent: Saturday, May 02, 2015 4:22 PM
> To: Holly Gregory; Rosemary E. Fei; Joshua Hofheimer
> Cc: Leon Sanchez; Greg Shatan
> Subject: XPLANE update - please review
>
> Dear Rosemary, Holly, Josh:
>
> Attached is an update from XPLANE of the presentation they gave on the
> CCWG call last Thursday (IRP not included, they are taking your comments
> onboard).
>
> Could you please review in light of the current member reference model,
> not the A/B approach of the last memo.  This is urgent please, we lost a
> bit of time while XPLANE looked at the approach described in your memo
>
> Leon is having a few email problems at the moment and he's not sure if he
> can find a connection robust enough to handle these large PDF files, but
> he will send a note as soon as he's able to confirm this request.  I am
> also cc¹ing Greg for consistency.
>
> All comments on how the graphics usefully represent the "empowered
> community" and the powers and mechanisms much appreciated.  Individual
> board removal/board recall is lacking.
>
> Jordan, Thomas and others have proposed a few changes.  These include:
>
> Slide "The Community Mechanism: SO/AC Membership Model" there is no (c) in
> how does it work.  The text under "Influence in the Community Mechanism"
> change to "the votes come from ICANNs SOs, ACs and the NomCom. Each SO and
> AC has a number of votes in the community mechanism, deciding on the
> powers established for the community".
>
> Slide power 1 should be "Reconsider/Reject Budget, or Strategic /
> Operating Plans"
>
> Slide power 3 (fundamental bylaws) should be 75%.
>
> Slide power 5  (board recall) should show a petition of 3 SO and AC and at
> least one of each.  Notion of quorum matters in the sense that every vote
> counts.
>
> And a comment on the IRP (but this before you updates on these slides
> which are very clear), but they were:  on IRP Slide 7 does the binding
> nature need to be modified to mention fiduciary responsibilities?
>
> Leon will write soon.
>
> Best,
>
> Adam
>
> Adam Peake
> ICANN
>
>
>
>
>
> ****************************************************************************************************
> This e-mail is sent by a law firm and may contain information that is
> privileged or confidential.
> If you are not the intended recipient, please delete the e-mail and any
> attachments and notify us
> immediately.
>
>
> ****************************************************************************************************
>
>
>
>
>
> _______________________________________________
> Accountability-Cross-Community mailing list
> Accountability-Cross-Community at icann.org
> https://mm.icann.org/mailman/listinfo/accountability-cross-community
>
>
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://mm.icann.org/pipermail/ccwg-accountability5/attachments/20150508/d7c5537a/attachment-0001.html>