[CCWG-Accountability] Regarding Non-profit and public-benefit legal structure

[Bruce Tonkin]

Hello Phil,


>>   I would envisage the Board having to be compliance with all Corporate Governance Codes specific to Companies Law in the country of incorporation, subject to a community consensus override. But what is its corporate status - not for profit or for profit - as different codes would  apply ? 

The legal status  of ICANN is as specified in its articles of incorporation:

https://www.icann.org/resources/pages/articles-2012-02-25-en

"This Corporation is a non-profit public benefit corporation and is not organized for the private gain of any person. It is organized under the California Non-profit Public Benefit Corporation Law for charitable and public purposes. The Corporation is organized, and will be operated, exclusively for charitable, educational, and scientific purposes within the meaning of § 501 (c)(3) of the Internal Revenue Code of 1986, as amended (the "Code"), or the corresponding provision of any future United States tax code. Any reference in these Articles to the Code shall include the corresponding provisions of any further United States tax code."

Also from:

http://en.wikipedia.org/wiki/Public-benefit_nonprofit_corporation

"A public-benefit non-profit corporation  is a type of non-profit corporation chartered by a state government, and organized primarily or exclusively for social, educational, recreational or charitable purposes by like-minded citizens.  Public-benefit nonprofit corporations are distinct in the law from mutual-benefit nonprofit corporations in that they are organized for the general public benefit, rather than for the interest of its members."

I believe it was deliberately set up as public benefit rather than a member organization - to avoid the situation where the members become limited to say gTLD registries and registrars and hence it ends up operating primarily for the benefit of the domain name registration industry.    

Any move away from a public-benefit corporation to a membership corporation - would need to carefully consider how to ensure that the members are reflective of the broader Internet community and don't become limited to a few members as interest in "ICANN" drops over time.   I.e. a failure scenario of membership organisation is what happens to the membership base over time and how it can be protected from capture.    I have seen some membership based ccTLDs get into problems when their membership becomes dominated by domain name investors for example.

Regards,
Bruce Tonkin