[CCWG-Accountability] Regarding role of Board directors
Bruce Tonkin
Bruce.Tonkin at melbourneit.com.au
Mon Jan 12 12:01:04 UTC 2015
Yes - I think Malcom has captured the situation well in his note below. I would say that the equivalent is also true of Governments as well - they have certain existing legal obligations that need to be reconciled with new policies that are implemented based on the will of the public.
I will note that often when ICANN undertakes compliance action - the parties involved often threaten to sue ICANN. This seems to be a common response in some parts of the world.
In general if ICANN believes that it is acting in compliance with laws and its agreements, and is acting in the global public interest it would defend any lawsuit.
If legal advice indicates that a lawsuit has a reasonable chance of success against ICANN - that means that ICANN is either not acting in compliance with the law, or it is not acting in compliance with agreements that it has entered into. Neither are appropriate for ICANN. A key part of trust in ICANN is that it will comply with the terms of agreements it enters into. Major agreements are subject to public comment before approval by the ICANN Board.
With respect to agreements ICANN has with gTLD registries and gTLD registrars - the agreements provide several options for making changes based on a consensus in the ICANN community. There is provision for gTLD registrars and gTLD registries to comply with consensus policies approved after an agreement is signed, and there are also options to work cooperatively with registries and registrars to make changes to the agreement. Major changes to agreements are published for public comment before approval by the board.
Regards,
Bruce Tonkin
-----Original Message-----
From: accountability-cross-community-bounces at icann.org [mailto:accountability-cross-community-bounces at icann.org] On Behalf Of Malcolm Hutty
Sent: Monday, 12 January 2015 8:38 AM
To: Adebunmi AKINBO
Cc: accountability-cross-community at icann.org
Subject: Re: [CCWG-Accountability] Regarding role of Board directors
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]
>
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>
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>
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>
>
>
> Links:
> ------
> [1]
> https://www.icann.org/en/system/files/files/acct-trans-frameworks-prin
> ciples-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
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> [8] http://www.theredhub.org/
> [9] http://www.youthaidscoalition.org
> [10] http://www.takingitglobal.com
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