[CCWG-Accountability] Regarding role of Board directors

Drazek, Keith kdrazek at verisign.com
Mon Jan 12 04:45:12 UTC 2015 

+1 Malcolm, well said. 

I would add one thing to your last paragraph, as follows in CAPS:

> The radical idea would be to propose that directors
> are entitled, in the final analysis, to advance their own preferences, OR THE PREFERENCES OF ICANN'S LEGAL COUNSEL, in
> defiance of the community they are appointed to serve.


Keith

On Jan 11, 2015, at 4:50 PM, "Malcolm Hutty" <malcolm at linx.net> wrote:

> On 2015-01-11 08:30, Adebunmi AKINBO wrote:
>> +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?
> 
> I would say that it is the responsibility of the Board to find ways to
> reconcile the community consensus with their legal obligations. Normally
> this is done through a combination of engagement with the community (so
> as to relieve unrealistic or unachievable expectations) and creative
> approaches to implementation (so that the objectives of the community
> are met in a manner compatible other obligations, which may not be the
> implementation originally envisaged).
> 
> These twin duties are, in my view, *both* fundamental. The latter should
> not be allowed to become an excuse for the Board to go its own way, in
> defiance of the community.
> 
> Ultimately, if a Board member believes they are incapable of satisfying
> all their duties, then their responsibility is to resign their office.
> 
> Indeed, the equivalent is true for ordinary commercial companies too;
> directors have the same responsibilities to the law and the company, on
> the one hand, and the company's owners on the other. So this is not a
> radical suggestion. The radical idea would be to propose that directors
> are entitled, in the final analysis, to advance their own preferences in
> defiance of the community they are appointed to serve.
> 
> Kind Regards,
> 
> Malcolm.
> 
>> 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
>>>> ‘ICANN’ as the corporation or the community, see
>>>> ICANN’s own Management Operating Principles (2008 link [1],
>>>> 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
>>>> [2]
>>>> 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.
>> +2348064464545, +2348089118151 | 2BAC511D.
>> www.akinbo.ng [4]
>> MEMBER, EXECUTIVE BOARD OF DIRECTORS,
>> Nigeria Internet Registration Association (NiRA)
>> www.nira.org.ng [5]  | akinbo at nira.org.ng
>> @niraworks
>> ACTING CHIEF OPERATING OFFICER,
>> DNS Africa Magazine
>> www.dnsafrica.org [6]  | akinbo at dnsafrica.org
>> @dnsafrica
>> NATIONAL CONVENER,
>> Nigerian Youth Coalition on Internet Governance (NG-YCIG)
>> www.ycig.org.ng [5]
>> PRESIDENT,
>> Young Internet Professionals (YiPS)
>> www.yips.gnbo.com.ng [7] | akinbo at yips.org.ng
>> THE REDHUB.
>> 12, Afonka Odebunmi Street, Lagos State.
>> http://www.theredhub.org/ [8]
>> NATIONAL FOCAL POINT ( NIGERIA ) 2009-2011.
>> Global Youth Coalition on HIV/AIDS (a program of TakingITGlobal)
>> www.youthaidscoalition.org [9]                  www.takingitglobal.com
>> [10]
>> www.iaids.org [11]
>> About me: http://profiles.tigweb.org/pscornerstone [12]
>> Links:
>> ------
>> [1]
>> https://www.icann.org/en/system/files/files/acct-trans-frameworks-principles-10jan08-en.pdf
>> [2] https://www.icann.org/resources/pages/guidelines-2012-05-15-en
>> [3] https://mm.icann.org/mailman/listinfo/accountability-cross-community
>> [4] http://www.akinbo.ng
>> [5] http://www.nira.org.ng/
>> [6] http://www.dnsafrica.org/
>> [7] http://wwwyips.org.ng/
>> [8] http://www.theredhub.org/
>> [9] http://www.youthaidscoalition.org
>> [10] http://www.takingitglobal.com
>> [11] http://www.iaids.org
>> [12] http://profiles.tigweb.org/pscornerstone
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> 
> -- 
>            Malcolm Hutty | tel: +44 20 7645 3523
>   Head of Public Affairs | Read the LINX Public Affairs blog
> London Internet Exchange | http://publicaffairs.linx.net/
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