[CCWG-Accountability] Regarding role of Board directors

[Alan Greenberg]

I am not an ICANN Board Member. I am not a 
lawyer. I am not a California law expert.

But I "hope" that the answer is "it depends".  I 
would like to think that the risk of being sued 
and the potential liabilities (and the chances of 
losing!) would be weighed against the ICANN 
Mission, Core Values and its Articles of 
Incorporation which includes the phrase "The 
Corporation shall operate for the benefit of the 
Internet community as a whole".

Alan

At 10/01/2015 08:40 PM, Steve DelBianco wrote:

>Thanks for the larger context around that bylaws 
>provision, Bruce.  But if we are considering 
>whether the bylaws refer to ‘ICANN’ as the 
>corporation or the community, see ICANN’s own 
>Management Operating Principles (2008 
><https://www.icann.org/en/system/files/files/acct-trans-frameworks-principles-10jan08-en.pdf>link, 
>p. 5):
>
>"The third and perhaps most critical point of 
>tension is between the accountability to the 
>participating community to perform functions in 
>keeping with the expectations of the community 
>and the corporate and legal responsibilities of 
>the Board to meet its fiduciary obligations. The 
>ultimate legal accountability of the 
>organization lies with the Board, not with the 
>individuals and entities that make up the ICANN community.”
>
>
>So, when the Board is confronting a community 
>consensus to take an action that could put the 
>corporation at risk of a lawsuit 
 how do you 
>bellieve a board member is obliged to react?
>
>From: Robin Gross <<mailto:robin at ipjustice.org>robin at ipjustice.org>
>Date: Saturday, January 10, 2015 at 8:10 PM
>To: Bruce Tonkin 
><<mailto:Bruce.Tonkin at melbourneit.com.au>Bruce.Tonkin at melbourneit.com.au>
>Cc: 
>"<mailto:accountability-cross-community at icann.org>accountability-cross-community at icann.org" 
><<mailto:accountability-cross-community at icann.org>accountability-cross-community at icann.org>
>Subject: Re: [CCWG-Accountability] Regarding role of Board directors
>
>Thanks for the info, Bruce.  It is worth 
>pointing out that regardless of how those bylaws 
>are interpreted, under California law, nonprofit 
>board members owe a legal duty of loyalty to the 
>corporation and there isn't anything that this 
>working group can do change California 
>corporations law and the legal duty of loyalty 
>each board member owes to the corporation (as a 
>corporation, yes, not staff).  This is where a 
>tension comes in for trying to do public 
>governance via a private corporation - the two 
>concepts weren't "built" for the other, so there 
>are gaps and some issues as a result.  I think 
>this is an issue our group should explore.
>
>Best,
>Robin
>
>
>On Jan 10, 2015, at 4:43 PM, Bruce Tonkin wrote:
>
>Hello  Steve,
>ICANN Bylaws Article 6 Section 7 defines the 
>duty of directors to ICANN the Corporation:
>
>Directors shall serve as individuals who have 
>the duty to act in what they reasonably believe 
>are the best interests of ICANN and not as 
>representatives of the entity that selected 
>them, their employers, or any other organizations or constituencies.
>
>I have often heard you refer to that specific 
>clause in the bylaws over the past year.
>I think it is worth understanding it a little 
>more.   I personally believe that the intent of 
>putting this clause in the bylaws is that 
>several Board members are appointed to the Board 
>from a specific stakeholder group, and this 
>makes it clear that Board members need to act on 
>behalf of all stakeholders not just the 
>stakeholder group that appointed them.   So from 
>my perspective it is a higher level of 
>accountability than simply being accountable to 
>the group that appointed them.   We certainly 
>make that clear as new directors join the Board.
>The clause does not mean that somehow a Board 
>director  is now accountable to the staff in the 
>organization rather than the "ICANN community".
>For those appointed to the Board by the 
>nominating committee - I think it is already 
>clear to them that they represent stakeholders 
>as a whole, as they go through a rigorous 
>interview process in front of the whole nominating committee.
>In my experience as Board director, Boards in 
>general operate on behalf of their stakeholders 
>- these stakeholders could be the general 
>public, shareholders, or members.  Under its 
>articles of incorporation,  ICANN is structured 
>to act on behalf of the global public interest - i.e. the general public.
>In addition to acting on behalf of stakeholders, 
>a board is also accountable to govern an 
>organization in accordance with the law.   This 
>to me is the "corporate" obligation that you 
>often refer.   This includes ensuring that the 
>organization can meet its financial commitments, 
>ensure the staff have a safe workplace, ensure 
>there are financial controls to stop fraud, 
>ensure the organization complies with any 
>contracts it has entered into etc.   Directors 
>of ICANN can be held personally liable under law if they are negligent.
>After the ATRT1 review,  a set of governance 
>guidelines were established to make this clearer:
><https://www.icann.org/resources/pages/guidelines-2012-05-15-en>https://www.icann.org/resources/pages/guidelines-2012-05-15-en
> From the section on the role of directors:
>"The fundamental responsibility of Directors (as 
>defined below) is to exercise their business 
>judgment to act in what they reasonably believe 
>to be the best interests of ICANN and in the 
>global public interest, taking account of the 
>interests of the Internet community as a whole 
>rather than any individual group or interest"
>"It is the duty of the Board to oversee 
>management's performance to ensure that ICANN 
>operates in an effective, efficient and ethical 
>manner. The Board will also be responsible for 
>overseeing the development of ICANN's short, 
>medium and long-term strategic plans, ensuring 
>that they will result in sustainable outcomes, 
>and taking account of the critical 
>interdependencies of financial, human, natural, 
>manufactured, social and intellectual capitals."
>"Some of the Board's key responsibilities are to 
>ensure that ICANN's ethics are managed 
>effectively, that ICANN as a whole (as well as 
>individual Board and staff members) operates 
>pursuant to the highest ethical standards, that 
>ICANN complies with applicable laws, and that 
>ICANN considers adherence to best practices in all areas of operation."
>The bylaws could certainly be enhanced to 
>incorporate the notion in the Governance 
>Guidelines that Board directors are accountable 
>to the Internet community as a whole.
>Regards,
>Bruce Tonkin
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