[CCWG-ACCT] "Delegates": A Possible Alternative to Members

[Jonathan Zuck]

The primary advantage of having delegates instead of members is that the organization may choose to assign fewer rights to delegates than are statutorily required to be assigned to members. Under California law, in addition to any other rights assigned by the organization’s bylaws, a member has certain minimum rights, including:


  *   The right to inspect certain corporate records;
  *   The right to elect and remove directors;
  *   Rights to receive notice of meetings;
  *   The right to approve bylaw provisions affecting the rights of members; and,
  *   The right to sue directors in derivative actions.

On the other hand, delegates have no statutory rights and instead have only those rights or privileges assigned in an organization’s bylaws. Since there are no statutory rights, there is also a significantly smaller body of case law on a delegate’s ability to exercise any rights he or she may have.

Therefore, if the intent is for the “members” to have fewer rights than the bulleted list above, then the “delegate” approach is likely preferred, however that would weaken the outside member group.


From: Greg Shatan [mailto:gregshatanipc at gmail.com]
Sent: Tuesday, January 27, 2015 2:34 PM
To: Jonathan Zuck
Cc: Carlos Raul Gutierrez; accountability-cross-community at icann.org
Subject: Re: [CCWG-ACCT] "Delegates": A Possible Alternative to Members

Jonathan,

I agree that delegates would not (or need not) be functionally different from members.  It would be structurally different, however, which may resolve certain concerns that have arisen regarding "joining" ICANN, turning ICANN into a membership organization, etc.

Greg

On Tue, Jan 27, 2015 at 1:10 PM, Jonathan Zuck <JZuck at actonline.org<mailto:JZuck at actonline.org>> wrote:
Definitely something to look into. I’m not sure that delegates would functionally be too much different from members, though, and would require the same tough questions be answered as to powers. Meanwhile, I had my in-house counsel look into the questions that have been raised about membership and the preliminary results are encouraging. Started a new thread with it.
Jonathan


From: accountability-cross-community-bounces at icann.org<mailto:accountability-cross-community-bounces at icann.org> [mailto:accountability-cross-community-bounces at icann.org<mailto:accountability-cross-community-bounces at icann.org>] On Behalf Of Carlos Raul Gutierrez
Sent: Tuesday, January 27, 2015 12:41 PM
To: Greg Shatan
Cc: accountability-cross-community at icann.org<mailto:accountability-cross-community at icann.org>
Subject: Re: [CCWG-ACCT] "Delegates": A Possible Alternative to Members

I think this is an interesting avenue, as some Board members, the ones who have NOT been nominated by the NomCom, have been "delegated" by its respective constituencies.

Furthermore as Roelof Meijer suggested earlier on, the Board should be separated between the NomCom delegates as ExecBoard, while the "Delegates" could constitute a Supervisory Board in the European style. Under this layered structure, we could develop the so much needed Internal system of Review and Redress of the (exec)Board decisions, well under control of the constituencies.......

Carlos Raúl Gutiérrez
ISOC Costa Rica Chapter
skype carlos.raulg
+506 8837 7176<tel:%2B506%208837%207176>  (New  Phone number!!!!)
________
Apartado 1571-1000
COSTA RICA

2015-01-27 10:03 GMT-06:00 Greg Shatan <gregshatanipc at gmail.com<mailto:gregshatanipc at gmail.com>>:
California non-profit law states that a non-profit corporation may have delegates, who would have some or all of the powers of members.  It is my understanding that these delegates would not be "statutory" members of the organization (and that the organization would not be a "membership" non-profit).

It is possible that using delegates could solve some of the issues raised about members and the concept of "membership."  I have not read beyond the statute itself, so consider this only a rough starting point (and certainly not "legal advice").

Here is the statutory language, from Cal. Corp. Code §5152:


5152.  A corporation may provide in its bylaws for delegates having

some or all of the authority of members. Where delegates are provided

for, the bylaws shall set forth delegates' terms of office, any

reasonable method for delegates' selection and removal, and any

reasonable method for calling, noticing and holding meetings of

delegates and may set forth the manner in which delegates may act by

written ballot similar to Section 5513 for written ballot of members.

Delegates may only act personally at a meeting or by written ballot

and may not act by proxy. Delegates may be given a name other than

"delegates."

Greg Shatan

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