[CCWG-Accountability] Regarding role of Board directors

Sun Jan 11 08:30:36 UTC 2015

+1 DelBianco = 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 believe a board member is obliged to react?

On the above, can we seek a legal opinion?
Its important to address this scenario.

This can happen at anytime in the lifetime of ICANN.
-Akinbo.

On Sun, Jan 11, 2015 at 4:33 AM, Alan Greenberg <alan.greenberg at mcgill.ca>
wrote:

>  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 â€˜ICANNâ€™ as the
> corporation or the *community*, see ICANNâ€™s own Management Operating
> Principles (2008 link
> <https://www.icann.org/en/system/files/files/acct-trans-frameworks-principles-10jan08-en.pdf>,
> 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.â€
>
>
> 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 <robin at ipjustice.org>
> Date: Saturday, January 10, 2015 at 8:10 PM
> To: Bruce Tonkin < Bruce.Tonkin at melbourneit.com.au>
> Cc: " 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
> 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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-- 
*Evang. Akinbo A. A. Cornerstone, Nigeria.*
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*Member, Executive Board of Directors*,
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