[council] Meeting with Board - ethics policy question

[Rosette, Kristina]

All,

All comments, suggestions, and revisions welcome!

K

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QUESTION FROM BOARD:  As we work to develop ethics guidelines, what are your top 3 concerns and proposals to address them (within the confines of the multistakeholder, voluntary participation model)?

PROPOSED RESPONSE:

1.  Two threshold points.  (1)  As an initial matter, the relevance of "within the confines of the multistakeholder, voluntary participation model" is unclear.  (2) In addition, ICANN has an opportunity to adopt a "gold standard" ethics policy.  Whether we like it or not, the fact of the matter is that the absence of one provides a basis for challenging BoD decisions, the multi-stakeholder model and/or ICANN's viability to those who seek to do so.

2.  The general view among GNSO Councilors is that the need for a stronger conflict of interest policy and an anti-revolving door policy is far greater at the level of ICANN Officers and Directors than it is at the level of GNSO volunteers.

3.  Concern 1 is that the current conflicts of interest policy is too narrow.

[Background:  Not to be read at meeting, but just fyi:

Article VI, Section 6 of the ICANN bylaws states that:

The Board, through the Board Governance Committee, shall require a statement from each Director not less frequently than once a year setting forth all business and other affiliations that relate in any way to the business and other affiliations of ICANN. Each Director shall be responsible for disclosing to ICANN any matter that could reasonably be considered to make such Director an "interested director" within the meaning of Section 5233 of the California Nonprofit Public Benefit Corporation Law ("CNPBCL"). In addition, each Director shall disclose to ICANN any relationship or other factor that could reasonably be considered to cause the Director to be considered to be an "interested person" within the meaning of Section 5227 of the CNPBCL. The Board shall adopt policies specifically addressing Director, Officer, and Supporting Organization conflicts of interest. No Director shall vote on any matter in which he or she has a material and direct financial interest that would be affected by the outcome of the vote.

Section 5233 is limited to self-dealing transactions, which are defined as "a transaction to which the corporation is a party and in which one or more of its directors has a material financial interest" and does not qualify for certain statutorily defined exemptions.  http://codes.lp.findlaw.com/cacode/CORP/1/1/d2/2/2/3/s5233  Section 5227 defines interested persons as "either: (1)Any person currently being compensated by the corporation for services rendered to it within the previous 12 months, whether as a full- or part-time employee, independent contractor, or otherwise, excluding any reasonable compensation paid to a director as director; or (2)Any brother, sister, ancestor, descendant, spouse, brother-in-law, sister-in-law, son-in-law, daughter-in-law, mother-in-law, or father-in-law of any such person."]

The current conflicts of interest policy does not impose an obligation on a Director to avoid conflicts that may not create a material financial interest but create an appearance of impropriety, would not be triggered by a close personal relationship that would not be encompassed by the statutorily defined relationships, and allows a Director to fully participate in discussions of votes on topics on which she/he would be otherwise prohibited from voting.  A revised CoI policy should resolve these deficiencies.

4.  Concern 2 is that there is no anti-revolving door policy.  The absence of one can cast doubt on the integrity of decisions by the BoD and the resulting policy and implementation decisions.  Similarly, the absence of an anti-revolving door policy allows a former Officer or Director to "cash in" on their experience as an Officer or Director in a way that creates an appearance of impropriety.   A new anti-revolving door policy should address these deficiencies.

5.  Concern 3 is a broader interest in considering possibly more robust ethics policies across the board -- for example, including a meaningful conflict of interest policy for employees, instituting penalties for a volunteer's failure to disclose material information in SOIs, and a GNSO equivalent of Article VI, Section 4 of the ICANN bylaws.  We would welcome your feedback on these ideas as well as any others that you think should be included.

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