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

Wed Jan 7 15:37:22 UTC 2015

I think that the potential for capture of the outside member group is the
reason that the accountability system probably needs to be linked to an
independent judicial/arbitral function to resolve disputes.   [Of course
that institution, too, could be captured 
 but at some point we have to end
the “who guards the guardians?” question].  And that, in turn emphasizes why
it is necessary as part of the transition to define the Board’s/ICANN’s
scope of authority.  A judicial/arbitral function can only resolve disputes
and cabin capture/abuse if it has an articulated standard against which to
measure the dispute.  In the absence of such pre-existing guidance the
judiciary/arbiter is simply substituting his/her/its own judgment for the
Board and the Community, which is not a good thing.

Hence the bottom line:  We need a) an outside accountability mechanism
representing the community; b) an independent dispute resolution mechanism;
and c) clearly articulated standards against which to measure and resolve
any dispute

Paul

**NOTE:  OUR NEW ADDRESS -- EFFECTIVE 12/15/14 ***

509 C St. NE

Washington, DC 20002

Paul Rosenzweig

 <mailto:paul.rosenzweigesq at redbranchconsulting.com>
paul.rosenzweig at redbranchconsulting.com 

O: +1 (202) 547-0660

M: +1 (202) 329-9650

Skype: +1 (202) 738-1739 or paul.rosenzweig1066

<http://www.redbranchconsulting.com/index.php?option=com_content&view=articl
e&id=19&Itemid=9> Link to my PGP Key

From: Mathieu Weill [mailto:mathieu.weill at afnic.fr] 
Sent: Wednesday, January 7, 2015 9:04 AM
To: accountability-cross-community at icann.org
Subject: Re: [CCWG-Accountability] Regarding Non-profit and public-benefit
legal structure

Dear Colleagues,

Many thanks for this very valuable discussion. 

While it confirms that our initial orientation towards the ability to,
somehow, oversee the Board, is relevant and worth exploring, the latest
comments (regarding risk of capture) highlight that we should also
anticipate on the accountability of the overseeing mechanism itself. 

If "the community" (through a mechanism yet to be determined) oversees Board
and staff, can we ensure all stakeholders, especially those who are less
familiar with Icann, that "the community", in turn, is accountable (ie has
the relevant independent checks and balances, review and redress mechanisms)
? A significant challenge, but I'm confident our group can address that. 

This aspect might, however, need to be addressed in our definition of WS1,
if there is agreement that is a necessary element for the transition to take
place. 

Best,
Mathieu

Le 07/01/2015 09:07, Dr Eberhard W Lisse a écrit :

I am not interested much in the details, interesting as they are :-)-O, but
would like to pick up on  Bruce's last paragraph, because in my view, the
"membership supervision" is not going to help much as it is prone to
capture, quite the opposite of the accountability we want.

greetings, el

Sent from Dr Lisse's iPad mini

On Jan 7, 2015, at 02:40, Greg Shatan <gregshatanipc at gmail.com
<mailto:gregshatanipc at gmail.com> > wrote:

What Bruce has set forth is close to correct.  However, I can't help but do
a little legal nit-picking. 

"Public benefit corporation" is a term used in California (among other
places) as a term for non-profit corporations generally.  (In New York
State, we use the term "not-for-profit corporation" to mean basically the
same thing as a California "public benefit corporation" (and we use the term
"public benefit corporation" to mean something quite different -- a
quasi-public corporation like the Metropolitan Transport Authority).)
California public benefit corporations are not really "chartered by the
state" (though New York ones like the MTA are chartered by the state).
[Wikipedia isn't always a great source....]

In California, public benefit corporations may be created with or without
members, or may convert from member to non-member and vice versa.  However,
a public benefit corporation with members is still a public benefit
corporation.  

(California also has "mutual benefit corporations" which are non-profit but
never charitable (and are also not tax-exempt).  Mutual benefit corporations
are run for the benefit of their members, and not for the benefit of the
general public.)

The term "member" can also be used to mean people (or organizations) who
aren't really members.  For instance, when you become a "member" of a
museum, you are not becoming a member of the corporation (i.e., what some in
ICANN-land have termed a "statutory member").  These non-statutory
"memberships" are more for marketing purposes and have no governance role.
"Statutory members" on the other hand, have a role in governance (which can
vary markedly depending on the by-laws of the particular corporation.

Hope this helps.

Best regards,

Greg Shatan

(Speaking for myself, and not giving legal advice as I am not a member of
the California Bar)

On Tue, Jan 6, 2015 at 6:54 PM, Bruce Tonkin
<Bruce.Tonkin at melbourneit.com.au <mailto:Bruce.Tonkin at melbourneit.com.au> >
wrote:

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
_______________________________________________
Accountability-Cross-Community mailing list
Accountability-Cross-Community at icann.org
<mailto:Accountability-Cross-Community at icann.org> 
https://mm.icann.org/mailman/listinfo/accountability-cross-community

_______________________________________________
Accountability-Cross-Community mailing list
Accountability-Cross-Community at icann.org
<mailto:Accountability-Cross-Community at icann.org> 
https://mm.icann.org/mailman/listinfo/accountability-cross-community

_______________________________________________
Accountability-Cross-Community mailing list
Accountability-Cross-Community at icann.org
<mailto:Accountability-Cross-Community at icann.org> 
https://mm.icann.org/mailman/listinfo/accountability-cross-community

-- 
*****************************
Mathieu WEILL
AFNIC - directeur général
Tél: +33 1 39 30 83 06
mathieu.weill at afnic.fr <mailto:mathieu.weill at afnic.fr> 
Twitter : @mathieuweill
*****************************
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://mm.icann.org/pipermail/accountability-cross-community/attachments/20150107/d41418e2/attachment.html>